1© gfk 2015 febelmar congress: the fmcg churn marketer : to dare or not to dare the fmcg churn...
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1© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
THE FMCG CHURN MARKETER: TO DARE OR NOT TO DARE?
GfK Belgium – Koenraad Dierick
Presentation Created for the Febelmar congress 2015
2© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
The loyal consumer is becoming a mythQuestion is: do you dare or will you fall?
Churn ↑= Opportunity for Partnership ↑ 2
Sales vs. Churn paradox3
ROY ≠ ROI 4
1 Loyal consumer = a myth
FMCG churn management = Ѻ Action5
5 things to remember from this presentation
3© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
Churn is happening within FMCG markets, the loyal consumer is becoming a myth.
1
4© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
Decreasing levels of loyalty and therefore increasing levels of churn
Decreasing loyalty
top300 brands
5© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
What is missing here?
6© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
Opportunity for churn management based on partnership between retailers, manufacturers, and
agencies
2
7© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
Integration of InsightsBig data as basis for improved churn management
Retail
AgenciesManufacturersNone or limited CRM
systems
Only know what happens in their stores and not for all buyers.
Full overview on limited groups
8© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
Some immediate pitfalls were identified
9© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
Threesomes are always daringDifferent Objectives | Needs | Habits | Not always prepared to share…
10© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
Sales might be going up whilst the
most valuable buyers are already
leaving your brand
SALES VS CHURN PARADOX
3
11© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
SALES VS CHURN
PARADOX
To reckon, predict and avoid churn,
video’s are needed instead of pictures.
You may call it smart data, instead of
Big data
2011 2012 2013
€ 24.583.000
€ 26.654.000
€ 19.017.000
%
%
%
%%
%
%
%
%
%
Yea
rly S
ales
Val
ueB
uyer
typ
olog
y
Non buyersLight buyersMedium buyersHeavy buyers
Note that the actual brand and years might differ from this example
12© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
Managers reflex:“But I can organize promotions, improve
distribution and invest in media, that
will save us.”
Promo
Media
Price
13© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
Managers reflex
> € 400.000.000> € 1.500.000.000
Media Investments
Promotional Investments
Total Media investments for largest FMCG brands in 2012
Total Promotion investments for largest FMCG brands in 2012
14© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
% of change explained by:PROMOTIONS
MEDIA EXPENDITURES
CATEGORY BEHAVIOR
HH CIRCUMSTANCEPRICE CHANGES
RETAILER RELATIONSHIPS
2011 2012 2013
€ 24.583.000
€ 26.654.000
€ 19.017.000
%
%
%
%%
%
%
%
%
%
Yea
rly S
ales
Val
ueB
uyer
typ
olog
y
Non buyersLight buyersMedium buyersHeavy buyers
Note that the actual brand and years might differ from this example
Some of the traditional manager tools were actually causing the churn instead of solving it!
15© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
Will this person buy Rexona again soon?
That is €42 of Rexona products for only €12
Example sent in by GfK panel member
16© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
ROY is real, ROI is rare
VS.
17© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
Managers reflex:“So now we can save everybody?”
No, sorry!
CRM
CRM
CRM
CRM
CRM
CRM
18© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
Churn potential
0%
100%
Point of no return / too expensive to keep
Not at risk
Aggressively defend
Test for future potential /
Divest
Divest / Choose to lose
Managers had to dare to identify their most valuable buyers and understand their churn
potential ….
Customer Life Time Value
Monitor evolution
Focus area!
19© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
19
Media Overall Media, TV, Print, Online Affinity TV: Channels, Time
Frames, Genres, Broadcasts Print: Genres, Titles Online: Services, Domains, Mobile
Demographics Gender and Age Household Size Life Stages, Life Cycles Social Class Income
Relevant Set Category and Cross Category Channels, Accounts Segments, Brands, Products,
Variants Promotion, Brand, Premium,
Private Label Relevance
Attitudes, Beliefs, Values Nutrition, Convenience, Sustainability Shopping Behavior & Preferences Beauty Care & Appearance Leisure time, Hobbies Personal Attitudes
Direct targeting opportunity via
retailer loyalty card Direct targeting opportunity via
retailer loyalty card
… That is were the partnership became important again
20© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
Managers reflex:“So we do a DM and we’re done?”
No, sorry!
DM
DM
DM
DM
DM
DM
21© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
5
FMCG churn management requires continuous effort
22© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
FMCG Churn management requires continuous effort
22
Understanding the drivers and evolution of churn behavior
Historical understanding
Continuous tracking
At the level of the individual
consumer
REAL LIFE | LONGITUDINAL | CONTINUOUS | CONSUMER | BEHAVIOR | MAPPING
Across channels
Across categories KPI evolution
Taking into account
promotions
Impact of mobile and
online
Impact of advertising
Taking into account other
sales drivers (e.g. consumer
confidence)
AND TAKING ACTION ON IT!
23© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
Still not convinced?......
Question is: do you dare or will you fall?
Still not convinced?
24© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
Still not convinced?
2011 2012 2013
€ 26.654.000
€ 19.017.000
Yea
rly S
ales
Val
ue
€ 24.583.000
2014
€ 21.317.000
In 2014, the brand recovered, but they are
still working on their way back to the top
To be continued…
25© GfK 2015 Febelmar Congress: the FMCG Churn Marketer : to dare or not to dare
THANK YOU FOR NOT CHURNING AWAY
Koenraad Dierick
GfK Belgium
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