The Biggest Lesson Learned in Consumer Marketing

There is a great movie you should see, if you haven't already.  It is called "Nothing in Common," (1986) and stars Tom Hanks as an aspiring, creative and innovative advertising agency executive who is forced to care for his aging, divorced and out-of-touch dad played by the great one, Jackie Gleason.  The movie is a wonderful story of family, love and devotion; but it is also a great theme about old and new consumer marketing.  Gleason plays a long-past his prime apparel guy who continues his old Madison Avenue ways of hand shakes and good-ol-boy relationships to sell his line.  Hanks is a new wave, smart, intelligent, but quirky agency executive who thinks about ideas while drumming on any surface with a pair of drumsticks. 

Gleason's character is at the end of his long business life.  He's been divorced by his wife of nearly 50 years who wants more out of life, and is quickly finding out that he can no longer sell the way he did. He is lost in the wild fashion crazes of the 80's. Try as he might, he can't sell his line because he has no idea what the consumer of the day wants. Hanks' character, on the other hand, is way ahead of the consumer demand. He gets it, pure and simple. His current project is to woo a major airline into the agency's account stable, and he takes an approach that fits exactly what the consumer wants out of an airline - to get them where they want to be with comfort, speed and dependability. He convinces the southern gentleman who owns the airline that his ideas are best, and stands by them even when it seems to be the totally wrong approach.  

Gleason's character loses. Hanks' character wins.  A great story (even though I just burst the spoiler alert!) of how one form of marketing made a transition to another.  It's also a great human interest story, and Gleason should have won the Oscar for his performance!  Check it out...and have the tissues ready.

Now for the lesson...

The way we market to the consumer today has changed, and promises to continue along the lines of technology and an aggressive, knowledgeable and demanding consumer. I've spent the past two years in awe of what our technology can now do. While there are a number of people on this planet who are threatened by the information that is being gathered on every consumer (the European Union, for one); the ability to turn that data into insights that can more and more accurately predict demand is nothing short of astounding. Consumer goods companies are racing to transform their analog systems into digital technology to take advantage of the big data and convert their old ways of doing business into exponentially higher revenue and profit.

Yeah, so what...we know that, right?

Yes, but just like Hanks and Gleaso's characters, there are still people and organizations set in their ways to prevent the ability to take the most advantage of these new technologies. For instance, let's take how retailers and manufacturers go to market in this new environment. What we continue to see is a three-way contest between parties that, in the end, have the exact same common goal - inciting the consumer to buy their product. The three 'parties' are the retailer, the consumer goods company's marketing organization and the consumer goods company's sales organization. Let's break it down.

The retailer has more data about the consumer than the consumer goods companies have because they maintain loyalty data that is rarely shared due to the sensitive nature of the information. They see the shopper personally each and every time they hit the website or walk into the stores. They literally touch the consumer at the point of sale and live and work in the same town. The CG manufacturer gets intelligence from external sources like consumer research firms, point-of-sale data providers, and their ad agencies. But at least they get to talk to the consumer via online chats, share and focus groups and surveys. The corporate sales organization talks to the buyer at the retailer, and sometimes to the marketing, merchandising and category management folks as well.  But they don't see, touch, hear, or have formal contact with the consumer. 

So in summary:

  • The retailer wants the consumer to shop at their store and buy the products
  • The CG corporate marketing organization wants the consumer to buy the products
  • The sales organization wants the retailer to buy their products, stock their shelves and provide incentives for the consumer to walk into the store and buy the products.

These people do not, as a rule, work together. Oh, they say they do, but in a world of digital, brick and mortar, there is a lot of brick and mortar in the walls that separate these organizations and very little digital interaction between them.  That is the biggest mistake that is being made right now in the consumer chain.

We have the technology now to fix this problem and enable these organizations to collaborate in real-time and still protect valuable trade secrets and sensitive data. There have been a number of people who have had this vision and many who have actually tested use cases around this topic; but are we seeing products or solutions that address this specific issue?  Nope.  Not really.  Instead, the effort is going into enabling each of the separate systems to bring data into their functionality to help provide the insights that would essentially look like there is a concerted effort for consumer engagement. But the problem is not a technical one, rather a philosophical one.

As long as manufacturers have made funds available as incentives for retailer promotion of their products, the retail community believes that they own that money and that it is theirs to do with what they feel is needed. And you can't argue with success - the retailers do know the consumer best and should be the lead on recommendation of tactics and strategy for every product line and category. However, the manufacturers do business with thousands of retailers and the data they secure from those relationships across their entire procduct line is priceless. Speaking with one of the category managers from a huge national hardware chain, I was told, "I would give anything to know how other retailers have succeeded in placing these products within their stores, and how to best display the deals around them." Exactly.

The manufacturers also understand the consumer's issues through their interaction from call centers, support and other service interactions. This is also valuable insight to have when preparing to plan and execute a promotion. Case in point: one retailer insisted on promoting a line of products that the manufacturer had service issues with, but they went forward with it and lost their shirts. The product sold well; but social media was ablaze with complaints about the product, so shoppers ignored the promotional deal.

So the big mistake is not so much what has happened already in these triad relationships, but whether or not it will continue to be three separate processes that, hopefully, come together in a singularly successful tactical and strategic consumer engagement. Only if these three organizations can collaborate openly and in real-time, sharing each other's respective data and working together to build a successful consumer engagement will we see a marked improvement in the return on investment of the billions in spending on consumer promotion.

Gleason's character stuck to his ways and found out that they did not win for him. Hanks' character won because he took bold steps and went way outside the box. It's time for that to happen with these three organizations.

Have another perspective?  I'll wager you do.  Love to hear it.

Follow me: @RealRobHand

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