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New brand marketing: The future of shopper loyalty in CPG

Consumer Products Writer

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The consumer products industry is undergoing a seismic shift in which markets are becoming increasingly fragmented. Thanks to technology, the process of buying is becoming synonymous with research; consumers are the masterminds of finding their way to great products and even better value. It's this context that creates a need for CPG companies to invest in new brand marketing and loyalty programs.

Historically, CPG leaders have relied on their channel partners to initiate and manage these programs. In the absence of technology, few companies had the means to connect with consumers directly. Facing a new, fragmented landscape, however, the need for CPG-initiated loyalty programs are more important than ever before.

As Advertising Age points out, CPG leaders are still lagging behind. Few brands are pushing loyalty programs as core strategic initiatives. Newcomers to the space will need to set their own precedents. In any case, some brands have been able to drive early success and make a strong impression with their consumers. Here are three strategic areas of focus, with points of inspiration, to guide you:

Psychographic targeting

As consumer markets become increasingly fragmented, bigger windows of opportunity are emerging for smaller players entering the space. Consider the case of Post Foods' Grape-Nuts Fit Cereal, which caters to health enthusiasts almost exclusively. The company's director of media and public relations, Jennifer Brain-Mennes, explained in an article for Adweek that the costs of building a mass-market customer relationship management database is high if you don't have significant scale. Instead, Brain-Mennes explains that her organization's new brand marketing initiatives revolve around data-driven integrations with lifestyle apps, which generate customer loyalty.

Post has created a virtual rewards system for consumers who watch their videos or click on ads. With this approach, the company is appealing to its audience's passions in addition to its buying patterns. This cross-platform perspective, also driven by data, is providing a mechanism for the company to create a 360-degree view of its consumers' priorities, interests and needs. In this way, Brain-Mennes says Post is reaching for a particular psychographic rather than a demographic.

Lifetime value data

In the CPG industry, purchases often fit within the context of a larger personal story. It's this rationale that has driven Pampers to leverage consumer lifetime value data to target potential shoppers before they even need a product. The company's loyalty program, Pampers Rewards, targets expectant and new mothers with helpful resources and offers before their children have entered the world, according to Food Manufacturing. For expectant mothers, these early months contain critical moments of need. By being present, Pampers positions itself as a loved, trusted and resourceful brand before they even need its offerings.

With consumer lifetime value data, CPG leaders can pre-empt their buyers' shopping habits while enhancing the targeting of their messages and offers. Brands can then develop new marketing content and tailored messaging that adapts to consumers' buying intent over the long term.

Technology integrations

Hand sanitizer brand Purell knew, in implementing its loyalty program, that it would need to supplement its first-party data sources. As the brand's marketing director, Kathleen Leigh, points out in the Advertising Age article, one data set will tell a limited consumer story, at best. To create a full picture of its consumers, Purell partnered with the Be Well Network loyalty program, which is accessible on the Web and through Facebook on mobile platforms. Leigh and her team hope to develop a full demographic picture of Purell's consumer base and use this information to better understand what products are likely to succeed among different segments. Multiple systems are necessary to create a complete story and marketing strategy.

When developing loyalty programs, CPG brands should understand that no one technology tool is likely to provide a comprehensive solution. To develop a full data picture, you need multiple systems. The future of consumer brand loyalty comes from deep relationships: bonds that are built through technology and data. The key to consumer retention in a fragmented market is trust. In addition to demanding value, consumers are looking to make more out of an increasingly valuable asset: time.

To learn more about how IBM can analyze your data to actionable insights, visit our Consumer Products Solutions page.