Friday, October 29, 2010

Some Thoughts About Suppliers CRM Strategies

I have seen this past few weeks a bunch of initiatives of brands which are creating their own customer relationship management program. Thanks to Internet and packaging communication, they aim to go around retailers in order to master their CRM directly.

Some of them set great programs. Indeed, large companies like Nestlé, P&G or Dannon can afford to develop this kind of programs. But in my opinion there are two downsides:

  • Obviously, results are biased. Indeed, you may boost consumption thanks to vouchers, but you address yourself to a specific type of customer, which does not represent your actual customer base.
  • By multiplying the number of customer relationship programs, you tend to find less efficiency.

Let’s take the example of the Coffee market (a very competitive one):

  • Nestlé has recently launched a CRM program in Australia for its brand.
  • Kraft has spend much effort in developing a e-CRM program, with a great Iphone app and interesting content.
  • What about other competitors like Unilever, which has enough power to set a CRM program by their own?
  • Also let’s not forget that you are not ONLY a coffee customer, but rather a food customer, which purchases at least a dozen other products meanwhile. Just to remaing concrete and simple, you may get tea, or hot chocolate instead of coffee.

This is the reason why I am wondering if those CRM programs will be able to exist by themselves. You may have a strong interaction with your customers as a coffee producer, but is it enough?

What I mean is that I believe a multi brand loyalty reward program would probably make more sense. It might be more convenient for several brands to join their effort and propose a program which would allow the customer to access all the vouchers they deserve. It will ease the process of coupon seeking. But it will also help to convince people to join these programs.

Some brands like Procter & Gamble or Unilever are already owning different brands for different purposes, and therefore could join all the business units in the same program. But also we may image third parties like Catalina trying to create this joint venture for the customers’ benefits.

What do you think about it?