1© gfk 2015 febelmar congress: the fmcg churn marketer : to dare or not to dare the fmcg churn...

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


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


Churn is happening within FMCG markets, the loyal consumer is becoming a myth.

1


Decreasing levels of loyalty and therefore increasing levels of churn

Decreasing loyalty

top300 brands


What is missing here?


Opportunity for churn management based on partnership between retailers, manufacturers, and

agencies

2


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


Some immediate pitfalls were identified


Threesomes are always daringDifferent Objectives | Needs | Habits | Not always prepared to share…


Sales might be going up whilst the

most valuable buyers are already

leaving your brand

SALES VS CHURN PARADOX

3


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


Managers reflex:“But I can organize promotions, improve

distribution and invest in media, that

will save us.”

Promo

Media

Price


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


% 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!


Will this person buy Rexona again soon?

That is €42 of Rexona products for only €12

Example sent in by GfK panel member


ROY is real, ROI is rare

VS.


Managers reflex:“So now we can save everybody?”

No, sorry!

CRM

CRM

CRM

CRM

CRM

CRM


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

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


Managers reflex:“So we do a DM and we’re done?”

No, sorry!

DM

DM

DM

DM

DM

DM


5

FMCG churn management requires continuous effort


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!


Still not convinced?......

Question is: do you dare or will you fall?

Still not convinced?


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…


THANK YOU FOR NOT CHURNING AWAY

Koenraad Dierick

GfK Belgium

https://twitter.com/koenraadd

https://be.linkedin.com/pub/koenraad-dierick/3/556/478

1© gfk 2015 febelmar congress: the fmcg churn marketer : to dare or not to dare the fmcg churn...

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