How can Agencies Demonstrate Value in a Competitive Marketplace ?
Providing a service to clients that manifestly increases sales will always be the cornerstone of a strong value proposition. Pricing this significant service at a rate that represents fair value for this impact on a client’s business is an increasingly difficult task in today’s competitive marketplace. But I strongly believe it is more important than ever to focus on the value of the offering and clearly articulate what difference this can make to the client’s business. Admittedly, and realistically, price is not irrelevant. Mickey Drexler, ex-CEO of J. Crew, says “The real price of goods is always the selling price. The best price is to sell it for what it’s worth.”
So, how does an agency demonstrate worth, maintain a keen pricing structure, and avoid a negotiation where the only outcome is a spiraling descent to the bargain basement of both price and value, a process I describe as ‘the race to the bottom’?
Before even venturing to introduce a pricing model, an agency must start each relationship by making strenuous efforts to understand the client needs and then clearly demonstrate the value of their agency’s creativity and wisdom.
Understand what problem the client needs to have solved? Be clear about what insight the agency can bring to the table? Ask searching questions and encourage the client to really define what success means to them. All of this helps to establish a level of trust and to forge common alignment.
It also embraces transparency and a deeper understanding on both sides. Interestingly for the potential client, a closer evaluation of their needs helps the client to evaluate potential providers on their approach and capability rather than solely on price.
What about the spectre of procurement? For many sales or new business teams, the mere mention of procurement evokes a rolling of the eyes or worse!
In my multifaceted role as a Global Chief Operating Officer, Asia President, and Senior Accounting Officer for the CPM Group of companies, I’ve endured many negotiations with zealous procurement teams, watching each element of our service being systematically broken down and assigned a price instead of a value. It’s a very straightforward, almost mechanical, process to place a price on inputs with no bearing on the benefits.
However, the procurement team/individual that can relate those inputs to the value created in the outputs, embraces the real added value the organisation seeks. The procurement professional can help demystify the challenges of internal budget structures versus real output based pricing, and work collectively with marketing and their agency to build a cost model that rewards good work and demonstrates value.
This can be the huge benefit of procurement done well. Yes, they often force agencies to examine their costs and present them in a more transparent manner, but this can only benefit any business longer term. Understanding the price of service delivery is essential for agencies to then realise profit whilst ensuring clients get value.
PepsiCo has recently eliminated procurement from marketing negotiations, but 53% of companies still involve procurement and the onus is on sales teams to embrace this and positively influence the decision-making process, defending their value proposition by clearly demonstrating its impact whilst working in an open and transparent manner, building trust with its procurement client as well as the marketing teams.
If business is negotiated on the correct footing, with the service framed as an investment not an expense, then both the client and the agency can harness the power of synergy and create a mutually successful outcome, based, not simply on cost, but on value linked to insight and a robust ROI.
Winning business that has a miserably low margin while voraciously consuming precious resources, leads to an inevitable and sometimes bitter parting of the ways, which can have a big impact on the agency’s business overall. It takes courage to hold your nerve around the negotiating table and look for new ways to add value, but it is imperative that your service is not viewed as a mere commodity. I’m afraid to say that all too often agencies have nobody but themselves to blame as they agree to commercial arrangements that are best described as suicidal. Who can blame client procurement, they are merely doing what we all try to do, which is secure the best product at the lowest price. I’d like to purchase a luxury car for the same price as a mid- range sedan, wouldn’t you? The fundamental issue here is procurement will keep asking for more concessions until the agency says no! The agency must find ways to say yes outside of simply cutting price and leverage the value-added aspects of the work the agency can and does do for the client.
The world is our marketplace and communication is getting faster. Whole industries, including retail, have undergone tremendous disruption. To be competitive, agencies must be agile, able to simplify process and embrace diversity. Rigidity is a thing of the past. Linear thinking and acting is hopelessly outdated. We must all work on a broader commercial approach. Business is global and it has never been easier to communicate and harness global learnings.
I recently attended a regional conference in Asia where teams from six countries pitted their collective problem-solving and creative skills to put forward several workable project plans designed to roll out across the region for a major client. The client was in the room and was electrified by the sheer energy and practical application achieved in a breathtakingly short amount of time. This was a clear demonstration of how enhanced service can be collectively achieved by harnessing the synergy of truly diverse teams.
Agencies must foster and encourage mental agility and flexibility amongst their people as they are the drivers of value. Business can’t be exclusively conducted from the isolation of a desk. Client service teams should actively network and absorb thoughts and insights from a diversity of sources. We all must keep up with current trends in the market and strive to be thought leaders, the respected “go-to” person in our field. This is especially important if we are going to master and exploit change and not be left an irrelevant colossus, too big and bloated to adapt in the face of fundamental upheaval.
In an increasingly digital world, the distance between clients and the field has never been closer. Agencies must manage their reputations, earn respect and nurture authenticity in all areas of our business. Actions and character must be in-sync and agencies must align what they do with what they
say. Relationship building has always been central to a successful campaign and now it is critical to get closer to clients. This means actively involving field teams.
Communication, like a fountain, must flow upwards as well as downwards. Agencies must inspire everyone to take responsibility and be heard, not mumble in the corner if things are not right. In a world where word of mouth is king, agencies should empower all employees to be advocates, the field teams are brand evangelists and a powerful manifestation of value.
Agencies destined to survive and thrive will be rooted in strong foundations and adaptable in the face of change. Always listening and globally aware, not complacently locked in silos. Not intransigent in the face of a problem and not taking the easy route of pointing fingers and blaming others. Instead, they must strive to think creatively about how to clear roadblocks as a team, with each member taking responsibility. It’s too easy to say no constantly; find ways to say yes that make commercial sense, add value and bring creativity to the solution required.
The pressure of today’s marketplace will always make it attractive for clients to go for a cheaper option. But business is rarely won on price alone. Competitors can undercut, but it is up to each agency to demonstrate they can offer an intelligent, consistent depth of service, delivered by a committed, energetic and engaged field team. Cutting corners and spiraling ever downwards leads to a race to the bottom and is ultimately unsustainable. Instead, focus should be concentrated on insight and people as they adapt, thrive and make evangelists of clients. There will be no better way to demonstrate value and as a positive by product, earn a decent margin.
Paul Woolley, August 2017
The beauty industry is the sector who owns the greatest variety of shoppers given the different distribution channels available: perfumeries, pharmacies, parapharmacies (specific to some countries), institutes, department stores, supermarkets or Internet. The profiles of the beauty consumers change based on their favorite shopping place. On the Internet we have the Millennials, in the pharmacies the ones who are looking for quality and natural products, in the supermarkets those who rush and in the perfumeries the luxurious shoppers.
My brand, my store
The difficult task for a brand is to achieve to shine no matter what or where and to target more possible shoppers. But what exactly does a beauty brand have to do to reach different categories of consumers simultaneously? Open their own brand store of course! In a dedicated store it is easier to reach various consumers’ profiles. In France, CPM created BRANDSHOPS, a turnkey solution designed to offer its clients the possibility to have their own store, whatever the format: pop-up store, corner, shop in shop, truck or just a first traditional permanent store. For instance, when L’Oréal Paris, Nyx or Gemey Maybelline chose to open their first stores in France, they called out to CPM France for the recruitment, training and management of the sales team. There are several advantages in opening a store among which strengthening the proximity to its customers in order to better know them, increasing the multichannel reach or offering a new brand experience.
Beauty & Mortar
With the global increasing trend of online shopping, the brands must align with their consumers’ requests and rethink their strategies. We tend to say that the future of retail consists in online shopping, but even if this channel is growing day by day, the beauty industry is the less impacted sector. Even if there is a new generation of beauty shoppers who are more inclined to buy online, ie the Millennials, most shoppers continue to go to the stores because here they can find samples and beauty advisors, and even make-up sessions for free. Consumers still need to feel, touch and test the cosmetics, the physical store thus has a real competitive edge and this experience cannot be yet replicated online.
In France, more than 50% of the beauty shoppers are stubborn when it comes to online shopping. However, 43% of beauty shoppers are using their smartphones to keep informed and to compare prices, even when they are in the store. The power of online shopping thus remains a threat and retailers have to continuously drive loyal and new customers to their stores. The actions they can leverage include a well-executed merchandising and beauty advisors with state-of-the-art knowledge on new trends, products and innovations. As previously mentioned, the Millennials, a generation which represents a large portion of beauty consumers, are the first ones turning to the internet before purchasing products. This generation chooses to trust the makeup recommendations of a makeup artist or beauty influencer on Instagram or YouTube over a salesperson in the store. And here lies the challenge for in-store salespeople: re-establish this advocacy. In order to compete with online beauty experts, brands must allow their sales teams to concentrate on their core tasks: sell. For merchandising services, training and sales team activation, we can come in.
The beauty buyers are more and more omnichannel, and a total uber-isation of this industry is still far away. The challenge for retailers remains their capacity to sharpen their systems and processes to ensure that the customer experience is a seamless one, whatever the distribution channel.
Veronique Motte, CPM France CEO discusses Sales Outsourcing in our latest CPM Expert Speak. The obvious choice for some but less well-known to others, sales outsourcing lets brands be more agile and keep ahead of the pack.
To adapt to situations, seasonality and new trends…
The modern consumer is multichannel. Their new needs and new ways of consuming are prompting brands to adapt, revise or even recast their marketing and sales strategies. This is having an impact on the efforts required of their salespeople in the distribution networks. Or rather it should. When a manufacturer’s sales force is given the task of concentrating on the French hypermarket network, it remains focused on the relationships it has built and maintained with each store. These sales representatives, who drive for miles along the roads of France for early morning appointments with department managers, do not have the “bandwidth” to absorb what we in our lingo call a new sales front. So, for a manufacturer who fully intends for its strategy to include the new network that is so popular with consumers, the convenience stores – Carrefour City, Franprix, G20, Intermarché Express, etc. – there is an alternative: the outsourced sales force.
In France, the new “convenience” sector accounts for over 8,500 outlets and 30% of growth in consumer products in 2015, according to Nielsen. In recent years, consumers have been using them with increasing frequency and in response, retailers have increased the number of outlets and thus the number of possible points of contact with these consumers.
In 2014, when French manufacturers were asked about the new challenges facing their sales force in 2016, they cited the improvement in coverage of the new distribution territories – corner shops, drive-thru, etc. When they were asked if they were using or planning to use outsourced sales forces, 55% of them answered “yes!”(PBMO study). The figures published by our French professional association, SORAP, also speak volumes. The outsourced sales force market grew by 9% between 2014 and 2015. Outsourced merchandising grew by 18.5%. This growth phenomenon is expected to continue.
Manufacturers measure the value that outsourced sales or merchandising forces sales teams can create as backup to their employees, by targeting stores that are not visited by them, such as neighbourhood or village mini-marts, but also beachside supermarkets and mountain grocery stores on a more seasonal basis. The importance of the phenomenon transcends our borders, with the same trends being observed in the United Kingdom, Germany and Italy. Outsourcing one’s sales force, or its merchandising or activation – the three main business lines of sales and field marketing agencies – is nothing new. What is new is the discovery of the many opportunities that this offers to brands in the current consumption environment, which many might describe as “complex” or even “confusing”.
… and to try new things, innovate and stay competitive
In order to benefit from a qualified sales team whose activities adapt to the year’s various high points, the brands are ready to team up with partners specialising in sales and field marketing campaigns, and try out new and original, even radical, commercial solutions. Like the outsourced shared sales force: shared between two manufacturers, these sales representatives can better and more efficiently cover a sales front in a more economical manner for each of them. In this case, the external service provider makes the relationship between the two companies much easier: part arbitrator, part advisor, it acts as a genuine facilitator while the brands retain complete freedom in defining their strategies.
Because in 2016, the sharing trend is bigger than ever! This is plain to see in the consumer services sector. On the B to B side of things, start-ups are increasingly taking it on board, with fab labs and co-working spaces. Sharing is thus becoming a true entrepreneurial philosophy that major manufacturers are embracing on their own scale with growing enthusiasm.
Other innovative mechanisms, such as e-merchandising (optimising product visibility on e-commerce or drive-thru sites) or crowdsourcing (data collection micro-tasks assigned to paid private individuals) also complement more traditional sales strategies.
For in addition to our local trends, players from further afield – Amazon, Alibaba, Costco, etc. – these names that are used to proclaim that competition is healthy, are transforming the distribution landscape. The status quo is definitely not an option.
For further information on this topic, please Contact Us today.
Sales of beauty products are booming in Asia, and it’s now one of the most important global regions for growth and development. Competition for lucrative sales is fierce, and CPM’s mystery shopping experience has proved invaluable to leading beauty company Coty, providing vital market intelligence by increasing Coty’s understanding of customers’ buying behaviour.
Hong Kong (HK) was the first Asian market Coty wanted CPM to focus on as it occupies a critical location as the gateway to the lucrative Chinese market. The CPM team began their mystery shopping programme using criteria which was based on the accepted standard of excellence in beauty customer service. It is focused on a European style service flow involving conversation, developing a relationship with the client and tailoring the service to their needs. The HK market however did not always conform to this accepted practise, shoppers fell into two distinct customer types, the HK local and the Chinese customer. Chinese customers did not want to spend time at the counter, they favoured “get in, get out” fast interaction. Yet they were the bigger spenders, bulk buying for family and friends who valued the prestige of buying exclusive goods in HK.
This presented the CPM team with an interesting problem as initially they were assessing the service of the staff through the accepted international guidelines which has a definite Western lens and does not take into consideration the habits of the Chinese customer. The rise in income of the Chinese middle class and subsequence increase in their international travel has necessitated an adaptation of the mystery shopping measurement criteria. The CPM exercise led to a better understanding of the shopping experience and needs of these customers. CPM and Coty realised that they needed to understand more about what Chinese customers wanted from their time in the retail store.
The learnings from HK became even more valuable when the mystery shopping project was rolled out from HK to Malaysia. A mixed mystery shopping team made up of Malay, Western and Chinese women was recruited to ensure there was a spread of profiles that were truly reflective of Coty’s customers. This local knowledge was applied to several customer service touch points including the Malay wedding gifting custom “hantaran.” The team noted whether the sales assistant offered specific extras for these customers such as special gift wrapping.
The CPM mystery shopping team have skilfully adapted global standards, keeping what is applicable to all markets and modifying where necessary to suit the local market. This is especially important in Asian markets like HK and Malaysia where there is strong customer segmentation. Sharing such useful intelligence gives clients the cutting edge necessary to keep ahead of the competition and has helped Asia to become the biggest contributor to Gucci Beauty sales globally.
Our sense of smell is intimately linked to our emotions, the mere hint of a long forgotten scent can evoke a powerful memory. CPM’s Regional Training Managers educate Beauty Advisors (BAs) in stores across Asia to tap into this emotion and maximise sales of Coty’s impressive stable of iconic perfumes. Their innovative approach has proved to be hugely effective.
So what are their methods? It starts with immersive coaching, both in the classroom and on the shop floor. Like all of us a perfume has a history, personality and family. The CPM team tutor the BAs so they gain a thorough understanding of these principles. The next step is to develop a feeling and connection to the fragrance which can be translated into language. A good example is the limited edition Marc Jacobs, 2017 Daisy KISS collection, which is inspired by the vibrant and electric emotion of a kiss in the spring season. Translating this essence so customers can picture and feel the emotion takes knowledge and confidence. The BAs trained by the CPM team acquire this skill and are able to actively engage with customers using powerful keywords and images to impart the vision. A BA’s confidence improves immeasurably when she sees an active engagement translating into actual sales.
The CPM team also understand how cross cultural differences can influence perfume sales. An interesting example is the Chinese market. Traditionally perfume is not important in Chinese culture but the millennial generation are actively changing this. They love designer brands and are highly aspirational. The CPM team train the BAs to position Coty’s Gucci perfume as an affordable gateway to acquiring the glamour, attitude and personality of the brand. Sales have subsequently increased across the Chinese and Hong Kong market, with Hong Kong having the strongest global sales of the Gucci brand.
Perfume is a sophisticated and complex category. Using CPM’s highly skilled, regional training team to teach in-store BAs to make sense of it and actively engage with customer’s emotions to impart the magic of scent is a crucial step in the sales process.
Consumer electronics continues to decline, despite rising consumer confidence
After the fall of the euro in 2015, many retailers increased unit prices to compensate to maintain their profits. This affected consumers’ interest in consumer electronics. In 2016 this changed, as overall disposable incomes grew and the euro revaluated, leading to higher purchasing power, and in turn consumer confidence also increased, due to the more positive outlook for the economy and the increased willingness to buy. Nonetheless, this factor was not sufficient to provide a boost to volume sales of consumer electronics.
Emerging Asian brands are becoming more competitive against the bigger players
Large manufacturers continued to dominate consumer electronics in 2016. These manufacturers generally benefit from strong brand recognition amongst the consumer base, many years of experience and well-established distribution networks. They are well-positioned to maintain their lead through regular new product launches and extensions of existing product lines. However, a number of smaller manufacturers gained volume share during 2016, and significant growth was registered by emerging companies such as Lenovo, which saw a strong increase in its share within laptops in 2016.
Internet retailing is seeing significant growth
Internet retailing is registering growth in all consumer electronics categories in the Netherlands, although in some categories more than others. Nonetheless, the majority of volume sales still come from electronics and appliance specialist retailers. High-ticket items such as televisions are more often purchased via this channel. This is due to the continued need for specialist advice and the need for confidence in purchasing the right product, as higher expenditure is involved. Meanwhile, smaller and lower-priced consumer electronics are increasingly purchased over the internet.
After the economic recession the number of specialized consumer electronics retailers decreased significantly. The remaining physical store chains (especially Media Markt and BCC) are still strong in market share but have to work very cost efficient to remain competitive against the online players (Bol.com, Coolblue). This results in younger, unexperienced store staff. The main brands have to “rent” their SIS locations in the stores and are expected to provide the stores with their own brand promotors.
Besides this, consumers are very well informed nowadays before they visit the stores and in order to prevent them from “showrooming” in the physical store and then buying online we really have to provide them with a great sales experience with tailored information for the consumers’ needs.
CPM is a main player in the CE market and our competitive advantage is in the quality of the store staff that we provide for the main brands. We focus on learning & development of our staff which enables our people to have higher conversion rates than regular store staff and, more important, they are capable of selling the high-end products of our clients’ line-up instead of the basic and mid-range products (that actually sell themselves due to price). This “premium ratio” is always a KPI in our contracts and offers better margins for our clients and the stores.
Our promotors are also coached and trained to make sure that the store staff of the retailers they visit become “brand ambassadors” of our client. We see an increase in sales on non-promotor days versus peer stores that don’t have our promotors.
Next to the best in class training programs that we provide our staff, we also are aware of the fact that the main brands in this sector are very data driven. They have their own sell out data, account manager store reports and we add promotor data. Most clients lose “grip” on their field execution because all this data comes in different reports, files etc. We have developed a tool that brings all field data together and provides tailored management dashboards, in which ROI, KPI status, NPS etc. is provided. It also provides an e-learning environment so that client, agency and promotor pool all access the same environment and all data is centralized (with different levels of access of course).
The combination of the best sales people and the best tools have helped us to maintain a top position in the very competitive Dutch field marketing environment.
We believe that physical stores will remain important in CE sales. We must challenge ourselves to keep investing in keeping and training the best people, innovate continuously in tools that give insight in our ROI, improve our people and connect with all available data. Besides that, we are looking for ways to connect with internet retailing as well (e-merchandising, home installations, etc). The world is changing fast so we have to keep up the pace!
Business Unit Director CE
Our latest CPM Expert Speak comes from Alberto Almar; CEO of CPM Expertus Spain Field Marketing. Alberto has been working at CPM Expertus for over 16 years and has over 20 years’ experience in field marketing.
Our present purpose for a better future.
There are many trend reviews that talk about the need to observe the world from an Omni-channel perspective. For those of us who are not millennials, this means we must recognize the convergence between what is physical and what is digital (the so-called Phygital), understand that concepts like credibility and reference have moved to the Internet and that the words agility, flexibility and service have taken on different meanings since the arrival of Amazon.
Despite the growth of e-commerce, selling in physical environments continues to be essential. Drivers related to price and convenience (the possibility of free delivery, ease of returns) co-exist with the great battle involving the abandonment of the shopping basket. Unfinished transactions in fear of a hidden cost, lack of information or the need to meditate the buying decision are what confirm that aspects like production presentation and prescription are decisive factors.
What are the challenges in the Spanish market for an outsourcing company focused on retail (not on e-tail)?
Although there is budding economic recovery, job insecurity in the sector coincides with a growing need for professional brand representation profiles: impeccable presence, excellent argumentation capacity, great negotiation skills and long-term service. And given that the buying experience is nearly as important as the actual purchase itself, exceptional representation of the brand values becomes something extraordinary.
The change in our clients’ demands and the evolution of consumer behaviour are obvious and, therefore, it is surprising to see how there has been talk for years about people management without truly committing to talent management.
Being committed to talent means:
In short, committing to talent means offering a tangible benefit to employees that directly impacts the quality of the work done and, thus, improves our clients’ business results.
At CPM, our mission is to have an impact on the sale of our clients’ products. By acting on the Sell-Out or Sell-In; face to face or by phone; permanently or tactically. Through Sales Forces, Sales Reps or Sales Promoters; through teams of Merchandisers, Brand Ambassadors or Specialist Trainers, among other alternatives. Although being results-oriented leads us to wanting to measure the impact of our activity, the generation of Insights and Influence is where value creation resides and this continues to be the driving force behind our business: people.
CPM EXPERTUS FIELD MARKETING
This month, it’s over to Bastiaan van Houten, MD from CPM Netherlands, for our Expert Speak. In 2001, Bastiaan started his CPM career with a field job at Diageo and in 2004 moved into CPM’s Dutch head office for a role in direct sales. After various roles and positions, Bastiaan started Cosine Benelux in 2011 and merged this business in 2015 with CPM Netherlands.
The number of smartphone owners is growing non-stop. At least 80% of the Dutch population owns a Smartphone; more than half of the population have at least one household tablet and just over 40% own a laptop also. And let us not forget about the 34% of Dutch citizens with a Smart TV; with an ever growing market share in the Dutch marketplace. If we look at the number of downloaded apps on a smartphone, this averages at just over 20 apps. All these figures lead to one thing: accessibility. People want to have access to everything, and this access must be easy. The same goes for our clients; they want access to all data and they want it now. And here, we see an opportunity for our newest app, CPM GO. With this app, we are able to serve our clients with a straightforward, efficient and low cost delivery model and most importantly; with the best ROI possible.
How it’s done
We have decided to collaborate with a crowdsource solution which enables us to gain insights from a large group of experienced app users. In addition to offering an affordable solution, it also provides speed and flexibility. Whilst this may not be the first crowdsource model on the market; CPM’s competitive advantage lies in the ability to offer a solution in the quickest way possible and which is only executed by our in-house, expertly trained CPM staff. We use “fire fighters” for controlling situations that need to be controlled.
At the beginning of the process, the client submits a brief and we then analyse the ability to deliver this via crowdsourcing. We look at the complexity of the request and if it’s feasible to carry out using crowdsourcing. Impacting factors include the speed of delivery requirements and delivery location. If the activity can be done through CPM GO, the project is launched directly on the app. App users can register via the CPM GO app and we’re able to conduct the selection process directly through CPM GO. This enables us to provide robust solutions to our clients which deliver the best ROI. When the job is done, the app user receives a compensation for the completed activity. Thereafter, data analysis and intelligence reporting are undertaken with recommendations and a plan of action for the follow up presented to the client.
On the ball
Our main focus is to guarantee the quality of our sales activities. We endeavour to deliver an even better ROI by gathering more data in a more efficient way. In this way, we are able to always be responsive to our client needs and always be on the ball! Results can be used to ensure the quality of previously executed store check activities, but also to eliminate any non –essential activities. We are in control at all times and can offer the client maximum results along with low pricing. A win:win solution all round!
One stop shop for the client
CPM GO is our way to align with a world that is changing so rapidly. We need to keep looking to the future and what the future is asking from us. We need to be flexible in times like this, as that’s how we will be able to continue to serve our clients in the best way. There is a growing demand for crowdsource solutions. Therefore, the client is asking for one stop shopping; customers can get all they need in just “one stop”. Not only can the delivery model be scheduled at the click of a button, but we can also look for possible improvements and solutions through CPM GO users. The call to action will be monitored on an ongoing basis. By integrating this app into our service offering, flexibility is generated for both the client and the app user itself.
If you would like to learn more on the capabilities of CPM GO, please contact Bastiaan van Houten on: +31 (0)20 712 20 11 or email: firstname.lastname@example.org
Andrew Potter, Group Managing Director, CPM Australia analyses the impact of the shift in power between brands and customers and why now, more than ever, it is crucial to maintain a human touch within the contact centre and customer service environment.
Over the past few years we have seen substantial changes in the relationship between brands and their customers. More than ever, power has been steadily shifting back to the consumer and the gap between brands and customers is widening. There is a growing realization that over-reliance on digital is creating this disconnect with customers and that stronger human intervention is needed to close this gap. No one doubts that digital is an important component of any company’s go-to-market strategy. But it is just one component of a complex customer experience continuum.
For all of these reasons, it is more important than ever that businesses get customer service right. The changes that we foresee in the next year is that contact centres will play a larger role in bridging that gap between brands and their customers and that good customer service will be even more important than ever.
There’s not a simple answer to these challenges. However there is one fundamental element that – despite all the changes we are seeing – remains constant and which is an essential part of the solution: the human equation. There aren’t any touchpoints, channels or sources of information quite as powerful or credible as that delivered by knowledgeable, professionally trained human beings.
We recently conducted research with the ACRS’s quarterly Omnibus Tracker to find out how customers feel about the current state of customer service in Australia. The findings are clear and confirm that personal contact is a vital component of customer satisfaction. For both simple and complex enquiries, Australians top communication channel preference for customer service queries is to speak with a real person over the phone. For all of these reasons, it is more important than ever that businesses get customer service right.
This month, our CPM Expert Speak feature is brought to you by Andrew Potter, Group Managing Director, CPM Australia & Retail Safari in collaboration with Monash University. CPM Australia and Monash University carried out research around Christmas Shopper Behaviours in the build up to the festive season.
CPM Australia, in partnership with Monash University, shares its latest research study which examines Christmas Shopper Behaviours during the busiest shopping season of the year.
According to research results, in-store purchase is still the most preferred channel for Australian consumers this Christmas. However, the data also reconfirms the notion of in-store and online shopping being treated separately is no longer valid. Increasingly, more and more brands and retailers are blurring the lines seamlessly between digital and in-store experiences.
As the blend between physical and digital becomes more popular, the desire among consumers to complete their Christmas shopping in actual stores is still strong. This holiday season, most consumers plan to use both physical store and online (49%), or only physical stores (43%) to conduct their shopping. Only 8% of surveyed consumers plan to use exclusively online channels during this holiday trading period.
These well-informed shoppers have started thinking about what to buy this year two months prior to Christmas.
The figures indicate that the majority of buyers are planning to do most of their Christmas shopping in November (51%), leaving only 30% making purchases in December.
Given shoppers have already done their homework and are starting early, ensuring knowledgeable retail sales people are available will be even more critical to the in-store mix this coming November and December. In order to maximize influence with consumers at the store level during this crucial trading period, it’s vital that brands and retailers properly invest in their shop floor staff this Christmas so they can be seen as a trusted resource where they can pass on expert advice.
The in-store experience is paramount. Online shopping offers convenience, but the physical store offers a sensory experience. The research demonstrates that not only does physically holding a product create a sense of ownership but it also drives must-have purchase decisions. Well over half (60.5%) of respondents report that the ability to see & touch the product in-store, for example, in-store sales demonstrations, enhance their shopping experience. This is also the main reason for shopping in a physical store this Christmas instead of online.
Other reasons why shoppers favour the physical experience include:
In terms of spending outlook for this year’s holiday season, the majority of respondents expect to spend about the same amount on Christmas shopping this year as they did last year (55.6%) while 18.1% confirmed they intend to spend less.
In terms of purchasing plans for presents; gift cards and gift certificates (45%) will be the most common type of present consumers intend to buy this Christmas, followed by clothing and shoes (39%), toys (33.1%) and food and liquor (32.7%). As Christmas becomes the time to entertain and indulge, food & liquor will be popular gifts chosen by those aged 18-34 and 55-74. Gift givers are least likely to purchase craft items or sports gear for this holiday season.
What this research tells us is that consumers won’t be shopping in a single retail format this Christmas.
Therefore, during this critical trading period, brands must be available across multiple formats as well as getting even closer to the customer to meet their needs with a whole personalized shopping opportunity.
To find out more on this research piece, please contact Andrew Potter on: +61 3 9211 2300 or to learn more on how CPM’s services can help drive sales for your brand during this festive season, please visit our Services page.