Selling diapers, toiletries, dog food, snacks and other consumer goods used to follow a standard playbook:use a wide variety of analytics and sales criteria to identify the likely consumers in a target market, get your products on a local retailer’s shelves, and then spend money in advertising, mass couponing and retail channel promotions to drive consumers to purchase.
Unfortunately, most playbooks are not changing as quickly, or as dramatically, as the consumers and markets they target. Consumer demographics are shifting rapidly, with dizzying growth in the sheer number of consumers globally and the rise of a more dynamic and less-predictable middle class in emerging markets. New levels of online comparisons and consumer switching in mature markets show the unprecedented levels of power and influence consumers have gained. And, given emerging markets’ robust growth and the concurrent saturation of mature markets, consumer goods manufacturers are compelled to manage an expensive and uncomfortably diverse global product portfolio.
Looking upstream, commodity prices continue to be volatile. But it isn’t always possible for low-margin companies to pass higher material costs on to customers—especially given today’s tough economic climate and its effect on retail purchasing behavior. Consumers are pickier. Generics have greater appeal as do private-label brands, which are flourishing.Private-label growth is an ongoing fact of life in the consumer goods industry, as retailers continue to increase the amount of private-label categories and shelf space. This makes it harder for branded products to compete for consumers based on traditional metrics.
What’s the solution? We believe consumer goods companies must look to new areas for answers, forging deeper, more collaborative relationships with a much broader ecosystem that includes partners, suppliers, vendors, co-developers and even competitors. In doing so, they can build a sales capability that is much more flexible, adaptable and responsive—evolving as necessary to meet the needs of customers in both established and new markets.We call this agile selling.
Of course, consumer goods manufacturers long have relied on channel partners to reach their customers. Agile selling takes indirect selling to a new level of collaboration characterized by several key practices.
For instance, companies that have embraced agile selling often excel at applying analytics to understand the effectiveness of specific channels and routes to market, and to ensure that each step and partner in the sales process may contribute to ROI. They also recognize the importance of giving channel partners access to what they need—tools, data, training and insights—thus incentivizing those partners to profitably sell the company’s products instead of competitors’ products.
With more end customers embracing digital channels, agile selling proponents excel at creating compelling online experiences—and often use digital channels (as well as other techniques) to more deeply engage intermediaries and customers. And, perhaps most important, companies that have adopted the agile selling model recognize that “dynamic ecosystems” are becoming increasingly important to their ability to achieve business goals. Thus, they’re continuously looking for ways to redefine channel boundaries and develop relationships with new partners.
Some of the most successful consumer goods manufacturers have developed leading edge agile selling capabilities that are helping them thrive in today’s complex, often volatile world. These capabilities enable leaders to implement a variety of sales-related innovations that help them extend their reach and capitalize on new growth opportunities.
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