Hello Consumer Product Manufacturers!

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Drew Larson

Drew Larson

Thought Leader at o9 Solutions, Inc.
Helping the world's leading companies increase the speed and quality of their decision making by 100x by awakening the cognitive enterprise.
Drew Larson

Every sales person at every brand manufacturing company is asking one question…

How can I sell more?

The following information will cover successful strategies used by brands which outperform their category peers. This article is filled with specific, and actionable, details that you can share internally today to effect greater sells tomorrow.

A joint survey by McKinsey, Nielsen, and the Grocery Manufacturers Association (GMA), of fifty brand manufacturers revealed the DNA of winners by finding significant differentiators across various dimensions, the most interesting being Strategic Collaboration. For category leaders, Strategic Collaboration efforts netted an 11% increase in sales!

Odds are, you are not the leader. According to the survey, while 95% of manufacturers felt they were doing a good job at collaboration, only 20% of efforts were producing ANY results at all. That should be a sobering fact; let’s read on.

With everyone doing VMI, CPFR, etc., the question still remains, “What are the winners doing differently?” Here is the makeup of their DNA:

Cast a big net, keep the best fish.
On average, category leaders are more likely to ask retail partners to collaborate, typically inviting 10 or more partners. The result is that, with limited resources, they can select the absolute best partners to collaborate with, those which are large in size ($80B), strong in growth (2.2%), and, for focus categories, retailers which show strong growth (5%) and represent a significant percent of CPG sales (14%).

Collaborate for success, not failure.
Winners view collaboration as a strategic opportunity to build a preferred relationship with retailers where they can increase their influence on merchandising and marketing initiatives. As such, they tend to collaborate on 90% of their total category sales. The opposite of this viewpoint is that collaboration is simply a way to manage performance issues. The latter viewpoint would be like taking your car to a mechanic when the engine is making noise only to learn you were supposed to replace the oil every 5,000 miles.

Find the win-win.

To ensure that everyone is benefiting, at the beginning of each initiative, category leaders and retailers align on the goals of the initiative, shared KPIs, and shared incentives. While typically retailers share store sales, loyalty-card data, and shopper research, winners go a step further and share brand performance, competitor performance, and price elasticity.

Be a jack-of-all trades.

For collaboration to be effective, winners build and deploy a dedicated cross-functional team that contains experts from brand marketing, category management, IT, supply chain, and product development. The resulting programs are less likely to have unforeseen setbacks and more likely to meet the changing demands of their customer base.


What’s next?

Now that I have shared with you, share back below:

  1. What is the one piece of information from above that will benefit your organization?
  2. Who in your organization can benefit the most from this information?
  3. What other strategies are you employing toward better collaboration?

We would love to hear your thoughts!