Product or Consumer Data? It’s All Crucial to the Experience
Over the last couple of weeks I have had very interesting conversations about how Consumer Goods (CG) companies could, and should, be engaging with consumers. The exchange of ideas and information will enrich my future conversations on this topic as I adjust my perceptions of the world and apply the new information I learn in future engagements. My conversation with Tim Bosch, Product Manager eCommerce at Eperium, revolved around how CG companies are currently falling short in this area. That is, they are collecting data from a variety of different sources, but don’t yet have ability at a corporate level to use this data for future interactions with consumers.
Tim started by pointing out that most Consumer Goods companies now have active social media programs to interact with their consumers. However, when asked, many consumers may not agree that the brands they are interacting with via social media and other channels have timely and relevant messages. Tim believes that relevance is lost due to the inability to connect to consumers in a larger context, that is – to be part of an experience. This stems from traditional organizational structures because communication via different channels is typically isolated within that channel. Each channel in turn is separate from the others because today’s corporate structures were established when marketing was “push”, that is in one direction, to a single customer (somebody who wants to buy my product) through one of three non-interactive media (print, radio, television).
Tim sees a huge change that is necessary within CG companies, as this isolationist approach will not enable them to play active roles in individual consumers’ life experiences. “Companies are seeing marketing and online marketing as separate islands. They need to change the organization and mindset to ensure everyone understands the new business model – where are the revenue and customers coming from?” Of course this begs the question: what is the new business model? My conversation with Kees Jacobs gave us some insight into what this could be: In future consumer engagement, and revenue, is likely to flow from a value network with the empowered consumer in the center. Retailers, CG companies and other service providers will all collaborate around the consumer to provide timely and relevant experiences.
In case you need more evidence of the change that is coming, Marc Rosen, the Executive Vice President and President of Global e-Commerce for Levi Strauss & Co., recently told an audience of retailers: “The word ‘omni-channel’ will go away. Consumers don’t know and don’t care about these concepts.” Of course this makes me wonder if consumers will care about the concept of a value network? Probably not, but I for one would appreciate at least seamless experiences which make my chores easier, and enhance the fun factor of my leisure time. As Tim points out “consumers have a lot of things, but they don’t have a lot of time”. A key message here is that CG companies should not waste consumers’ time delivering messages or content at inappropriate times or out of context. For example, the adverts that play in front of YouTube videos are often ill-matched to the video content or the potential audience. Who wants life insurance adverts when watching cute kittens?
So how can CG companies adapt to ensure they can play a relevant role in the lives and experiences of the consumer? Increasingly there is a focus on data: Where is the data coming from, and how to process it to get value. This reminds of my conversation with Devashis Senapat of Cognizant. You can’t just do analytics for analytics’ sake – you have to have a purpose, and that purpose should be to promote your products or brands in the most relevant and appealing manner possible.
Tim provided some great examples of the first steps are that are being taken today to increase relevance. One example captures many of the concepts of value networks and understanding how a specific experience changes individual consumption patterns: A soft drink company and an alcoholic beverages company teaming up with cruise liners to understand exactly what the drinks consumption behavior is driven by the experience of an ocean cruise. Gaining an understanding of how the experience (a cruise) changes behavior (ship environment vs. a local restaurant or home consumption) means all parties can benefit: More precise supplies from the beverage companies and a better cruise experience delivered by the cruise liner because thirsty people have ready access to their beverage combination of choice. In future, Tim sees more of these collaborations which harness the power of data to deliver a more complete experience.
This brings me back to the theme of my conversation with Tim: Without data, and an understanding of what that data is telling you, you cannot optimize your business performance. If you want to effectively engage with the consumer you need to understand which partners to recruit and work with. People have a natural tendency to gauge their responses to events or ideas by the data provided. Business partnerships and initiatives are no exception. “What is an argument without data – you need to back up all ideas with data these days.” Tim listed some value creation initiatives that can be enacted today, but revolve around data sharing and the communication of insights:
- Retailers informing CG companies of new opportunities:
- New customer segments for their products (gender, age, social status etc), which enables new marketing activities and product ideas.
- Insight into demand for existing brands/products in new regions
- CG companies educating retailers in the best practice for selling their products
- Consumer ‘platforms’ providing services: Your phone calendar combining with the GPS in your car to calculate travel time to the next appointment, and scheduling a shopping pick-up based on route, climate and content (are there perishables?).
A summary of my conversation with Tim would read “CG companies are increasingly required to provide easy, timely and relevant experiences to consumers.” It implies that not only do you know your consumer very well, but you also have all the data about your product to hand and the ability to bring the two together to create “actionable insight”. To be successful, CG companies need to match attributes of products to individual consumer preferences so they can ensure that the relevance of their offer is immediately seen. However, since I am trying to determine whether CG should focus on consumer OR product data, I pressed Tim for an answer to this question. His response was quite insightful: Companies who are not doing well financially are focusing on outbound (product) data. Like somebody who is ill, and prefers their home comforts. Companies who are doing well tend to set up innovation centers and experiment with inbound (consumer) data. Just like a fit, healthy individual ready for a new adventure. (I plan to test this myself in future engagements, by cross-referencing areas of interest with income statements).
Based on Tim’s insight, and his references to ‘all the data’, I feel I must split the points for consumer and product data. However, since the conversation did focus on consumer segmentation and consumer experience, I feel consumer data must get the majority of points. Another split entry, with ⅓ going to product data, and ⅔ to consumer.
The score to date: Which data capabilities should CG companies prioritize?
Product Data: 1⅔
Consumer Data: 1⅓