How to Apply the Concepts of Customer Experience in the Planning and Execution of Trade Marketing

How Trade Marketing professionals can benefit from Customer Experience concepts, especially in this age of retail disruption.

I was invited to give a talk about the impacts of Customer Experience on the planning and execution of Trade Marketing, in the AEX Pocket, which happened recently in Belo Horizonte - Brazil. Aligning the world of Experience concepts to the best practices of Trade Marketing is a great challenge. The goal here today is precisely provoke this reflection in an interesting context.

I had the honor of working as Trade manager for a few years in the watch and accessories segment, and the learning was quite rich, especially for some very special reasons:

·       Opportunity to be close to the commercial area, implementing actions to boost the sell-in (sales from the factory to the distributor) and sell-out (sales from the distributor to the consumer);

·       Being able to measure each of the actions rationally, demonstrating the positive impacts on the sale and promotion of products in the short term;

·       Receive real feedback from the market, especially from distribution channel teams, sales promoters and sales force;

·       To meet the sales needs of the various distribution channels, developing and applying actions according to each reality;

·       Translate, preserve and promote the identity of the brands at the point of sale;

·       Generate more revenue for brands and contribute to meeting sales goals.

First, it’s worth to align what is this Trade Marketing.

I have learned over the years that Trade Marketing is one of the noble activities of the great marketing tree, and it’s closely linked to sales activities, facilitating the work of distribution channels, paving the way for product outlets, facilitating consumer access and translating the brand strategy at the point of sale.

But it’s worth to see what the literature says:

"Trade Marketing is an important part of the marketing strategy of organizations that plan to maximize sales and differentiate their products and services at points of sale. It is, therefore, a marketing discipline that guides the development of relationships between manufacturers or service providers and sales channels, by understanding the needs between brands and products, points of sale and consumers." (Wikipedia)

"A key role of the Trade Marketing management of a brand/product is the training of the sales force at the point of sale, preparing the retail to make a more qualified transaction, with clearer and deeper knowledge about the product or service marketed. The basic method of Trade Marketing is to focus on the fundamentals of sales, such as Distribution, Display, Price and Promotion." (Wikipedia)

"Trade Marketing is the process by which the manufacturers promotes contact between the consumers and their brands through distribution channels, while distributors can benefit from increased sales." (www.marketingdeconteudo.com)

The question here is this: As a leader, what would you do if you had to deal with Trade Marketing from the perspective of Experience?

To make things clearer, let first, briefly, go through the main concepts of the experience world and try to relate each one of them to the Trade Marketing. This involves understanding what is Experience, Experience Economy, Customer Experience, Customer Service and Customer Success.

So, let's start with the essence of everything: the Experience

Experience is a strong, friendly, expressive word that many people are talking about; including, it is used in advertising campaigns to value products and services.

The expression "improving the customer experience" has been widespread in the corporate world, and experts says that in the not-too-distant future, competition will not be in the product or service world; the competition will be in the experience. Just put a magnifying glass on what already happens today, in the world of physical and electronic retail, to realize this enormous transformation.

Experience is the essential raw material that defines all perceptions about a brand, service or product. It is the perception that the customer has after any interaction with your brand. You cannot define, criticize, or praise a service without first experiencing it. Experience is feeling and knowing the real moment of truth.

In this way, the Trade Marketing manager, when understanding the bases of the concepts of the experience, will try to plan and execute a Trade Marketing that extracts from the consumer the best possible perception of their products, generating more value for the brand and a consequent increase in the sales and profitability. They will worry about what is left after the brand interactions at the point of sale; and what stays needs to mean value.

Now, let's go deeper into understanding what Experience Economy means and how to think about Trade Marketing through that perspective.

Experience Economic defines a superior stage by which the customer distances himself/herself from the rational factors that involve products and services and links himself/hersefl to the experience, which has the power to review the progression of the economic value. In other words, the Experience Economic minimizes the price factor and takes the entire journey of the consumer to a more intangible world, where the product itself comes to mean less in comparison to all the value involved.

Do you want some quick examples? Think about the ways that you have to cut your hair:

1.     Cut your hair at home, using the goodwill and experience of your own mother, aunt or grandmother. How much will this cost? Nothing! The result will be: the haircut and, as incredible as it may seems, a well cut and with good a finish, usually;

2.     Cut your hair in that neighborhood beauty salon, where the queue is formed as people arrive. You can read the newspaper of the day (the most popular) or an old magazine; have good talk with the hair stylist or with who else is waiting. There is no air conditioning, the products used are the simplest, and there is no differentiated service. They are, usually, the cheapest salons in the city;

3.     Cut your hair by appointment, in an air-conditioned room, with hot towel, washing, drying, creams, after-shave etc... Everything with a good quality. Price? Usually, the medium one, in the average;

4.     Cut your hair in a barbershop, with impeccable and themed décor, bar, snack bar, snooker, reception, sound system, 120 types of beers etc. In this case, the haircut becomes a detail among a set of experiences that the place provides. Price of haircut/beard? It depends on the barbershop, but they are usually the expensive ones.

Of course, the number 4 had the progression of economic value completely revised, making a haircut count so many times more than it would be worth in a simple barber shop.

Now, think about a birthday cake:

1.     Make the cake at home, using your own inputs: Really cheap;

2.     Buy the cake batter at the grocery store or at the supermarket: Cheap;

3.     Buy a personalized cake at the bakery: Expensive;

4.     Buy the entire birthday party, including the cake: Really expensive.

In this example of the cake, the stage of the party is the upper stage that expresses the power of the Experience Economy. The cake becomes a detail and, if it doesn’t exist, many guests will not remember of it.

Another classic example is about coffee, which goes from the commodity scale (grain), passes through the product (01 packet of coffee sold in the supermarket), passes through the service stage (the coffee sold in the bar or even in that coffee shop of your choice), and culminates in the coffee sold at Starbucks. In that case, Starbucks is the best example of the Experience Economy.

The experience economy concept was first used in 1999, by the Americans and Harvard professors Joseph Pine and James Gilmore, that even resulted in the book The Experience Economy.

The Trade Marketing Manager, from the perspective of the Experience Economy, will position the planning and execution of the Trade Marketing much more like experience and much less as product or service. Here, we have a trade that privileges the experience.

But can all coffee shops become a Starbucks? Can all salons become a barbershop? Can all ice cream shop become a H?agen-Dazs? The answer is no. But, on the other hand, what we see in practice is that the apex of experience drives improvements at every scale of the pyramid.

The successful barbershop, for example, provokes improvements in several other barbershops in the city, some renovating their salons and others implementing new services, such as scheduling, more comfort, parking etc.

The message here, for you that is a Trade Marketing manager, is as follows:

Seek, relentlessly, to distance consumers from the rational factors that involve products and services. Think of experience, regardless of the type of product you need to promote on gondolas, exhibitors, displays, trade shows or anywhere else.

Even if they are cake noodles, pastries, beverages, cheeses, jewelry or watches, you can give your touch of experience and break the ice of the economic rigidity. This means much more than decomposing. Is it hard to do this? Of course, very difficult. But it is possible, even because great brands did it and they still there, in the business, as more than inspiring examples.

So, welcome the Economy of Experience and get the best of it! But calm, because it is not over yet.

Now, let's talk about the concept of Customer Experience

Customer Experience is a term that defines the totality of interactions and perceptions with the customer. It’s everything that is perceived, felt and remembered by the consumer, before, during and after the purchase.

The Trade Marketing manager, from the perspective of the Customer Experience, will deliver better experiences in all Trade Marketing interactions (before, during and after). Here, we have a trade that focuses on interactions.

It is as if the Trade Manager could fly over and see clearly every detail of the entire Trade operation, from its planning to execution. In this case, each point of the journey will be monitored, and each interaction will generate an input for decisions, adjustments and improvements in the service. Here, the Trade Marketing becomes a much more strategic (and much less operational), by the perspective of the CX, focused on the best customer experience in the before, during and after the interactions.

The brand is taken into account, the packaging, the logistics, the suppliers, the entire chain of distributors, the relationship with them, the deadlines for attending the campaigns, the quality of execution, sales incentives, training, materials, the engagement of promoters, research and, of course, the last stage, the consumer, with all their anxieties, pains and desires.

A quick look at the main Trade Marketing activities listed below could express the dimension of the Customer Experience as a discipline that cares about the totality of interactions. Moving from the simplest point of the sale promotion activity to the most advanced channel intelligence studies, everything becomes an object of the Customer Experience:

1.     Merchandising and Sales;

2.     Training;

3.     Relationship Events;

4.     Categories Management;

5.     Shopper and Channel Intelligence.

But how can a Trade Marketing manager capitalize on Customer Experience concepts in their operations?

The answer here is not so simple, but one way to work and evolve in the escalation of experience is to apply the three pillars of the Customer Experience:

1.     Operational Success;

2.     Reduction of Efforts;

3.     Memory and Emotion.

For Operational Success, the Trade Manager needs to make every operation succeed. It is to do the basics very well done; it is because of the basics well done that the set may or may not deliver more value. What is the use of an excellent promotion mechanics if the material does not arrive at the right dates at the points of sale (gifts, displays etc.)?

As many campaigns are highly perishable, with very tight deployment and execution schedules, it is at this moment that it becomes crucial to ensure the operational success of all those involved in the chain: you, as Trade Manager; your backstage team (assistants, analysts etc.); your frontstage team (supervisors, promoters, repositories, delivery agents etc.); suppliers; the distributors (their B2B customers); and, of course, the protagonist of everything, the consumer.

The second pillar of CX focuses on Reduction of Efforts in all Trade activities. And it is here that you can "lubricate" the operation well and, of course, make flow, with much more consistency, the first pillar that aims to ensure operational success.

Reducing efforts is reducing the obstacles that often prevent a strategy from being executed in the right way, at the right time and with the expected results. Reducing efforts is eliminating tolls, waste, extra costs, rework and friction throughout the journey.

If you use the technology arm, for example, to streamline a campaign, capture feedbacks, monitor field teams, generate intelligence, develop remote training etc., you are reducing effort, and that is wonderful for Trade Marketing activities. Abuse, with responsibility, of technology and stay ahead of your competition.

Another way to reduce stress is to make the whole chain gain time. Everything that takes 30 days to happen, try to reduce it to 20. Everything that was highly bureaucratic and expensive (printed matter, registers, stamps, authorizations, registrations etc.), eliminate or simplify to the maximum. Think of the simplest and most effective mechanics.

Your distributor will always love a finite product called time. Give it to him/her and you will pave the way for more business and a better relationship, for sure.

And the third pillar of the CX has its free charm. If the homework was well done in the operational field and in reducing customer efforts (employees, distributors and consumers), you now need to leave a positive memory. Yes, Memory and Emotion are the main jewel of the Customer Experience. And for that to happen, your Trade actions need to be memorable. In fact, not all of them will be, but some of them need to leave such relevant memories that everyone will shout it from the rooftops.

The most creative, authentic and effective actions are not always the most expensive. The Trade Marketing manager needs to incorporate the DNA of the brands that he/she represents, so he/she can capitalize on the best of them, at the point of sale. Making this link and translating the whole essence of the brand is part of Trade's efforts and is a composite of the branding.

Think about the actions of Coca-Cola, famous beer brands, smartphones, perfumes, watches and smartwatches, among others. Then, when you are preparing the next training, the next stands at trade shows, designing the new exhibitors and displays, creating the next campaign of gifts, the new uniform etc., look for that extra bit of authenticity and try to get out of the curve.

Make it different and deliver more value to everyone who is part of the Trade Marketing journey. Provoke, motivate and inspire your agencies, teams and customers.

How is Trade Marketing from the point of view of the Customer Service?

It is the operating arm of the world of experience. It involves support and, as a rule, is reactive. It exists to solve problems, concerns and doubts of customers. Everything that happens along the journey needs to be resolved quickly and effectively.

The Trade Marketing Manager, from the point of view of the Customer Service, will ensure that Trade's actions take place effectively, guaranteeing the operational success of all activities. Customer Service clearly combines with the first pillar of CX: operational success.

Your relationship center needs to respond and resolve quickly, be it a question, a complaint or a complex problem that happened in the middle of a campaign, for example. Materials need to arrive at the right time, so that the promoters act quickly fulfilling their planograms. The stand needs to be impeccable, the training needs to be well evaluated, and the brand guidelines applied correctly in the shop windows.

Your Trade team, from the point of view of Customer Service, will deal, act and resolve demands and problems. Think now about the most important activities of Trade and that demand a super operation: Merchandising and Promotion, Training and Events of Relationship.

Here, you have a beautiful opportunity as a Trade Marketing Manager: assert and prove the value proposition of the brand at the point of sale. So, step in and positively influence everyone.

And finally, how can you treat Trade Marketing from the perspective of Customer Success?

Customer Success is the philosophy and organizational unit that drives to the success of the clients and that makes them continue customers and buy more. Has a predictive and proactive profile. It is very common, especially in startups, to find professionals who hold the position of CS Manager or Head of CS, who is the professional responsible for the success of the client.

When we talk about this success, it means that the customer needs to have tangible results with our product or service, whether it is selling cakes or using software.

The Trade Marketing manager, from the point of view of Customer Success, will ensure that Trade Marketing activities ensure customer success by keeping them customers and buying more. From this perspective, we have a much more strategic Trade, focused on the health of the wallet, that causes repurchase and avoids the churning of the clients, so that they become faithful.

In this context, Trade leaders can rely on more strategic Trade Marketing activities, such as Category Management, Channel and Shopper Intelligence.

The goal here is not for the Trade Manager to override responsibilities of CS leaders, but to incorporate behaviors, techniques and even the key metrics of Customer Success, such as Retention Rates, Churn, Net Billing Increase, and even Upsell (sell more of the same product to the same customers) and Cross Sell (sell other portfolio products to the same customers).

You, as a Trade leader, can be a great Customer Success partner, of course, when that organizational unit exists within the organization.

Therefore, our summary looks like this:

From the Economy of Experience perspective, we have a Trade Marketing that privileges the experience while superior stage, practically annulling the rational of the economic value of the product or service;

From the Customer Experience perspective, we have a Trade that privileges the interactions in the before, during and after the planning and execution of the activities;

From the Customer Service perspective, we have a Trade that focuses on the quality of the operation, making the activities flow in the right way and at the right time;

From the Customer Success perspective, we have a Trade that focuses on the success of the client, so that they continue customers and buy more.

I hope that this reflection has led you to think of new ways of practicing a more proactive, creative and result-oriented Trade Marketing, aligning it with the modern concepts of the Experience world.

Translated by: Yan Mendes | e-mail: [email protected]