CPG firms compete with each other across a saturated market, with limited options for influencing sales, and where everyone else has the same essential options, such as pricing, promotions, shelf placement, advertising, field force targeting etc. Differentiation comes down to applying these activities better than the competition.
The application of data and analytics to these challenges is a key step towards beating the competition and driving up sales. This is not an entirely new idea, but what does it take in practice?
There are 5 key steps:
1. Combining data
The most valuable insights require looking at the intersections of data sets. Combining point of sale data from retailers, with market share from aggregators, with internal planning, marketing, warehousing, sales force, and financials, can lead to key insights, and support focused activities. Combining these sources requires that fundamental data challenges are overcome. This is not sexy; it requires careful mastering, mapping, alignment, aggregation, allocation, and estimation.
2. Handling the volume
Combining these data sets across countries, retailer stores, products, segments, and across daily time-slices, explodes the volume of data. Handling this effectively requires a Modern Data Architecture, and specialist skills. Many of our clients are embracing cloud technologies to enable the levels of flexibility, scalability, and speed to delivery needed to meet business demand.
3. Insights for everyone
Building upon logically combined data sets and a well-executed architecture requires a close working relationship between technical and business resources, and targeting different levels of reporting capability appropriately. More technical business analysts need flexibility and self-serve opportunity, whereas the less technical will need the framework of dashboards and pre-built reporting.
4. Linking data to action
Being competitive is about efficiency. Effectively targeting your resources, in terms of both time and money, is critical to maximizing the return. For example your field force has limited time in-store, so their activities need to be simple and focused. Every day, data can be used to segment and identify the most profitable products and critical promotions, data can be used to identify where they are likely missing in store, and data can be used to select the top priority stores for resolution.
5. Iterate to win
Sales Executives will have a great deal of experience in the setting of targets and the allocation of resource to improve sales. However, with the new availability of data analytics and visualization, these actions can be more directly correlated with success. In our experience there are always surprises in actions that are truly driving outcomes. Successful organisations constantly make changes, test hypotheses, and optimize to win; based on the data.
This is the first in our series of blog posts on Data-Driven Sales for CPG. We will use our next blog posts to look into each of these steps in more detail, suggesting good practice, and successful starting points that we have seen across our clients. We will also move onto the next evolution, with the introduction of prediction.
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