Collaborative CRM Workshop. 04 Strategy and Tactics Development

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1 Collaborative CRM Workshop 04 Strategy and Tactics Development 1 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

2 Collaborative CRM Workshop - Agenda Introduction to to Collaborative CRM CRM Partner Alignment & Project Objectives Segmentation & Scorecard What are the key challenges facing the industry in Europe What is Collaborative CRM How can Collaborative CRM improve the industry dynamics and performance What are the personal opportunities for certification How do you identify and engage with the right Partner for Collaborative CRM What are the key decisions to make before working collaboratively How do you establish objectives, target benefits and project plan Collaborative Segmentation How is it done How do you develop a pragmatic, valid Segmentation How do you establish goals which focus on the target Segment Strategy & Tactics Development What are the strategic options and how do you choose them What are the Tactical options for delivering the Strategies Implementation & Measurement How do you plan effectively together to ensure the best implementation What are the key considerations for success What measurement criteria can you use Project Scoping & Next Next Steps Steps Which real world initiatives will be progressed What are the barriers to progress and how can they be overcome What is the plan & next steps to make them happen 2 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

3 Collaborative CRM Workshop Introduction to to Collaborative CRM CRM Partner Alignment & Project Objectives Segmentation & Scorecard Strategy & Tactics Development Implementation & Measurement Objectives To understand how to identify the Strategies and Tactical options for meeting the needs of the Target Segment At the end of this section you will: Understand how to build a strategic plan to meet the Shoppers needs Know how to develop a list of potential Tactics to achieve the Strategic plan Project Scoping & Next Next Steps Steps 3 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

4 What is a strategy? An elaborate and systematic plan of action Or put another way Strategies are the BIG IDEAS that will achieve your Scorecard Objectives 4 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

5 What do strategies do? Strategies are a framework within which you can make consistent day-to-day tactical decisions Leaflets STRATEGIES; STRATEGIES; Set Set Direction Direction Frame Frame Decisions Decisions will will and and will will not not do do Establish Establish a a firm firm stance stance Promotion Pricing SMS 5 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

6 The purpose of strategy What What do do we we want want the the SHOPPER SHOPPER to to do do differently? differently? Shop more often? Buy a different product? Spend more per purchase? Try something new? Get excited about shopping? Become more loyal? Buy more profitable goods????????????????????????? 6 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

7 How do we do this? By developing strategies that create Long Term Relationships with the target segment Remember it is called Collaborative Consumer Relationship Management, so it is important to build a long term relationship with the shopper, not just a short term return A key tool to do this has been developed for you to use 7 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

8 What does a strategy look like? A simple statement that gives clear direction to What we will do and How to achieve our scorecard objectives The Collaborative CRM Strategy Summary Table also includes clear details of important supporting information 8 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

9 What does a strategy look like? Example A simple statement that gives clear direction to What we will do and How to achieve our scorecard objectives The Collaborative CRM Strategy table also includes clear details of important supporting information 9 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

10 How do you develop Strategy? Strategy is informed by the Segment s Criteria and the identified needs the Value Drivers 1. Segmentation 2. Working Proposal 3. Scorecard 4. Synthesis (Creativity and judgement) 10 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

11 How do you develop Strategy? 1. Segmentation Which segment we are focussing on & who are the shoppers? What do we want the shoppers to do and what needs will we meet (what is their behaviour change)? 11 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

12 How do you develop Strategy? 2. Working Proposal Which products & categories? What qualitative benefits will this strategy deliver? What challenges are there to build on? 12 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

13 How do you develop Strategy? 3. Scorecard What quantitative benefits will this strategy deliver (what is the size of the target)? What do we want shoppers to do (the outcome of their behaviour change)? 13 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

14 How do you develop Strategy? 4. Synthesis How can we bring together what we know to directionally summarise what/ how we want to do with our target shoppers? Analysis/ Judgement Creativity What will the top level communication & tactical themes look like? What other benefits/ issues/ challenges might there be? 14 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

15 What are the requirements of a good strategy? Sufficient identifies all the key decisions that can achieve the Collaborative CRM objectives and opportunities Addresses the right issues/opportunities Sustainable Good strategies produce competitive advantage over time. Leverage key strengths of the partners Exploit competitive weaknesses Selective It is not a "shopping" list of everything we'd like to do. Synchronised Capitalises on the strengths and capabilities of each organisation which must participate in executing the strategy. 15 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

16 What are our Strategic Options? There is a Menu of Strategies available STRATEGY Trial Penetration Frequency Transaction/Weight of Purchase Conversion Retention (Loyalty) Profit DESCRIPTION The Trial Strategy is a joint CRM strategy aimed to achieve the first purchase/ consumption (of a Brand/ Product / Company / Category) on the part of a specific target Consumer The Penetration Strategy is a joint CRM strategy, aimed to develop the number of Consumers who purchase/consume (a Brand / Product / Company / Category) within a specific target The Frequency Strategy is a joint CRM strategy to encourage Shoppers to purchase the Brand / Product / Category more often The Transaction Strategy is a joint CRM strategy aimed at increasing the level of purchases/ consumptions of current users (of a Brand/ Product / Company / Category), involving the growth in the Category The Conversion Strategy is specifically aimed at getting Category Buyers to buy more of their purchases in the Partner Retailer. It is appropriate when analysis has shown that Shoppers from the target Segment are shopping in the Retailer but NOT buying the Brand / Product / Category The Customer Retention Strategy is a joint CRM strategy aimed at developing the level of purchases/ consumption (of a Brand/ Product / Company / Category) over total purchases / consumption on the part of a specific target Consumer ( share of wallet or share of requirements ) The Profit Strategy is a joint CRM strategy aimed at enhancing the value chain profitability, for both parties. It is appropriate for categories where top line growth is challenging. It is typically delivered by efficiency gains/cost reduction, rather than price increases 16 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

17 What if we need a strategy that isn t on the menu?! CHECK STEP! If you cannot identify with one of the menu options then develop your own strategy This is the chance to be creative, and create new out of the box thinking Think about the real needs of your target segment Make the strategy about delivering a real point of difference versus completion to attract this group Watch Out! Ensure your strategy follows the worksheet and is robust and fact based 17 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

18 ... How do you develop Strategy?! CHECK STEP! Having developed a strategy Re-check against Scorecard Is the strategy SUFFICIENT? 18 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

19 . How do you develop Strategy?! CHECK STEP! Partner Alignment & Project Objectives Segmentation & Scorecard 1) Strategy & Tactics Development Implementation & Measurement 2) 4) 3) As with any demand project, the majority of costs exist in the implementation stage of the project If your strategy does not meet scorecard criteria.. 1) Return to generate an alternative strategy o reset the Scorecard, or 2) Return to select a new Target Segment or 3) Decide NOT to continue with the Collaborative CRM project or 4) Revise scorecard and accept the costs associated with continuing 19 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

20 WORKSHOP Strategy Selection 04a The purpose of this Workshop is to select and describe a Collaborative CRM Strategy that will best address the Opportunities to improve your joint business with your Target Shopper Segment We will use the same Case Study as in Segmentation & Scorecard The task is to complete the blank Strategy Summary Worksheet Use the inputs for Strategy selection.. Segmentation Selection Grid Working Proposal Prepare to feed-back to the group WHY you have selected your Strategy Hints Use terms a child would understand Refer to the strategy menu to help select strategy type 20 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

21 WORKSHOP Strategy Selection Finalise 1. Segmentation 2. Working Proposal 3. Scorecard Strategy Worksheet 21 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

22 Collaborative CRM Workshop Introduction to to Collaborative CRM Partner Alignment & Project Objectives Segmentation & Scorecard Strategy & Tactics Development Implementation & Measurement Objectives To understand how to identify the Strategies and Tactical options for meeting the needs of the Target Segment At the end of this section you will: Understand how to build a strategic plan to meet the Shoppers needs Know how to develop a list of potential Tactics to achieve the Strategic plan Project Scoping & Next Steps 22 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

23 Discussion What are the CCRM tactics you have implemented? How did they work? What went well? What did not go well? What were your key learning's? 23 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

24 Many of our challenges are in the tactical area What are the Practical Industry Challenges we face? Increased Trade Spend Deflation Media Fragmentation/ Mass marketing effectiveness NPD = New Product Development NPD Success Challenge Increased Promotion Intensity Manufacturer Price Manufacturer 10 % LESS!! Manufacturer Discount Retailer Retailer Retailer Retailer Improving Trading Relationships Space Squeeze Constant Supply Challenge Price 10 % LESS!! Shopper Discount Understanding & Meeting Shopper Needs Changing Shopping Patterns (frequency/loyalty) Changing Channel/Format Emphasis 24 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

25 What are tactics? Detailed plans to achieve objectives set by strategy Or The things that the shopper will see! 25 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

26 What are the tactical options? ECR Italy Definition TACTIC DISCOUNT DESCRIPTION 4 Offer to target Consumer of several types of discount as a result of a (usually) purchasing behaviour POINTS 4 Offer to target Consumer of several types of points of a collection, as a result of a (usually) purchasing behaviour SAMPLE 4 Free offer to target Consumer of a product or a purchase bonus GIFT 4 Offer to target Consumer of a gift SERVICES 4 Offer to target Consumer of a service COMMUNICATION/ INFORMATION 4 Offer to target Consumer of information that is relevant for him/her CHARITY 4 Presentation to target Consumer of the existence of a social initiative and of the opportunity to contribute/participate in it 26 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

27 What are the tactical options? Wider Definition Range Visibility Supply Chain What Can We Do In Collaborative CRM? Promotion NPD Communication Price NPD = New Product Development What might these wider tactics look like in a Collaborative CRM process? 27 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

28 Tactic Development Process Example 1 Coca Cola / Monoprix France Conversion Strategy targeting segment Young Urban Adults Category/ product: Soft drinks / Coca Cola Light 1. Direct Mail offering Free Home Delivery 2. Occasion based Point Of Sale 3. New take home SKU focused on Target shopper 28 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

29 Tactic Development Process Example 2 Conad / Barilla Italy 3 Strategies - Frequency, Transaction & Retention Target Shoppers Family focus, varying by strategy Category/ product: Bread Substitutes / Barilla 1. Targeted Magazine Communication 2. Weight of purchase based Coupon Incentives 3. In-store communication aligned to TV 29 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

30 The Tactic Development Process Overview Strategy 1. Identify the shopper behaviour change required 2. Develop Provisional Tactical Plan 3. Validate The Tactics Tactics 30 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

31 Tactic Development Process Step 1 1. Identify the shopper behaviour change required Conad / Barilla Italy 3 Strategies - Frequency, Transaction & Retention Target Shoppers Family focus, varying by strategy Category/ product: Bread Substitutes / Barilla The summary of behaviour change was to increase frequency of purchase, ( to build the transaction with Conad and therefore improve shopper retention) 31 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

32 Tactic Development Process Step 2 2. Develop Provisional Tactical Plan What tactics will deliver the Strategies we have developed, taking note of the shopper behaviour change? Tactic Headings Range Visibility/ Shelf Price Promotion CRM Mechanics Tactics Development Table 32 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

33 Tactic Development Process Step 2 2. Develop Provisional Tactical Plan What are the Collaborative CRM Mechanics? (ECR Italy) WHERE COLLABORATIVE CRM MEDIA WHEN Tactic Headings At home Mailing Mailing with Magazine Away from purchasing decision Range Visibility/ Shelf Price At home / Others Internet Site SMS Call centre Away from purchasing decision Promotion CRM Mechanics In the Store Self Scanning At the till Electronic Kiosks During Store visit End of Store visit Before/during/after Store visit 33 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

34 Tactic Development Process Step 3 3. Validate The Tactics Tactic Description A mailing of a 1 coupon off a purchase of 5 of Barilla Pasta products Coupons Issued 100,000 Estimated Redemption 30% = 30,000 Cost Benefit of Tactic Cost Coupon Redemption Costs - 30,000 Fixed costs - 20,000 Total Costs - 50,000 In this case costs split 50:50 between retailer and supplier How do we evaluate the cost benefit? Short or long term? Benefits Supplier Sales uplift - 250,000 Profit Uplift - 75,000 Retailer Sales Uplift - 150,000 Profit Uplift 65, Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

35 Tactic Development Process Step 3 3. Validate The Tactics The Budget planner can be used to develop a view on the cost benefits of the tactics 35 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

36 WORKSHOP Tactic Development 04b The purpose of this workshop is to develop your Tactical Plan Use the strategy developed in the previous workshop Use the Tactics Development process to develop your own tactical plan for Luxury Desserts in Superior Foods Write your tactics on the Tactic Development Worksheet Explain the rationale for your choices What criteria would you use for validation Hint Focus on no more than 1-2 tactics 36 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

37 WORKSHOP Tactic Development Worksheet 37 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

38 Collaborative CRM Workshop Purpose & Outcomes Introduction to to Collaborative CRM Partner Alignment & Project Objectives Segmentation & Scorecard Strategy & Tactics Development Implementation & Measurement The objective of this section was: To understand how to identify the Strategies and Tactical options for meeting the needs of the Target Segment At the end of this section you are able to: Understand how to build a strategic plan to meet the Shoppers needs Know how to develop a list of potential Tactics to achieve the Strategic plan Project Scoping & Next Steps 38 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

39 Collaborative CRM Costs v Benefits Where do they occur and what are the implications? Partner Alignment & Partner Alignment & Project Objectives Project Objectives Segmentation & Scorecard Segmentation & Scorecard Strategy & Tactics Strategy & Tactics Development Development ~0% Implementation & Implementation & Measurement Measurement Costs Benefits Costs build throughout the process but there is no real business benefit until the end of the process! Check to ensure plans deliver against scorecard objectives at every stage use the budget planner to estimate costs v benefits Budget Planner 39 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

40 Collaborative CRM The Million Euro Shopper Question! Ultimately, will our Collaborative CRM plans result in a positive, loyalty building experience for the Shopper? Positive, loyalty building experience from a brand perspective? Positive, loyalty building experience from a retailer perspective? 40 Collaborative CRM Strategy & Tactics Development Copyright ECR Europe All rights reserved. Version 7.0 June 2005

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