Best Practice Metrics

FMCG today

Most Fast Moving Consumer Goods (FMCG) firms will say that they have a competence in using data and market research. They acknowledge that data and research is more available and used than ever before in FMCG Sales and Marketing. Yet some companies make better decisions that result in increased sales, awareness, consideration and trial than others. And, some companies have evolved, funded departments or functions that look after data and research, that drive and coordinate the critical strategic planning process.

Those companies that have invested in data and research evenly, treat data and research as one of the five investment classes:

What does good look like?

1

The companies which use data and research to make better quality decisions by measuring the right things. In FMCG companies this means they measure both the relative efficiencies of different investment types, and the outcome (effectiveness) of the investment. As well as measuring the individual investment types, they measure how all investment works together. For example, the companies would measure the overall rate of trial of a new brand or SKU, but they would also benchmark the relative efficiency of value adding in-store promotions, versus pricing discounting promotions. If Sales and Marketing functions are allowed to measure in silos, without using relative benchmarking of their different metrics, a true picture of trial (in this case) will not be available for future decisions or post-launch evaluation).

2

Companies ensure that the four strategic areas that require measurement are all covered:

3

There is a focus on the interfaces that allow data to be presented, used and analysed. Emphasis is placed on dashboards and scorecards, to assist those managers who are time poor, as well as to enable those who specialise to deep dive and model. For example, if a Key Customer Manager is writing his Account plan, there are 17 key indicators across eight tables that are needed to properly analyse data. Good analysis will lead to around 25 insights for each Account plan, if these tables are correctly set up.

4

Companies ensure that the people who use data are treated as customers. Research has shown that if a group of managers is simply given data and asked to analyse it, even in a user-friendly interface, it will get around 55% of the insights of a second group who are given a proper process to analyse and up-skilled in using data.

5

Investment in data and research is planned and sourced dynamically. What gets measured gets improved, so as a result when the investment decision is made each year, new areas that need to be measured, and new ways of measuring, need to be factored into the budget. For example, Social Media is being measured in new ways and the tools for measuring Social Media need to evaluate it for their ROI, and whether it will give new insights to Brand Managers and Channel Managers in writing their Brand and Channel plans.

How to improve data and research

Companies that are less sophisticated and do not have all the data they need, can begin their data and research strategy by ensuring that what they have now is properly formatted, and their key stakeholder managers properly trained to use it. Once done they can then move on to the more dynamic approach of auditing what they need, developing a cost benefit of having the data, and buying more.

Customers

In FMCG firms, organised retailers now play a dominant role for many categories and suppliers. While retailers will claim that speed to market is one of their key measures, and suppliers often lag on this metric, it is important that retailer engagement is very thoroughly understood. The area of satisfaction and benchmarking is currently relatively underdeveloped and retailers are not being truly measured for their engagement – a scale that looks at a number of purchase predictions, and receptiveness to supplier initiatives.