How Digitalization Helps Market Leaders Confidently Make Bolder Claims to Win With Consumers - A Maturity Model Approach

“With no room left for price increases, CPGs must fundamentally reshape their businesses to reignite profitable, volume-driven growth.”

- Bain & Co., Consumer Products Report 2024: Resetting the Growth Agenda

This article originally appeared on the Veeva Industries Blog.

One of the keys to profitable, volume driven growth is compelling brands and products defined by strong, differentiated product and advertising claims. Claims are the lifeblood of successful brands. This is nothing new and was true long before the trend toward digitalization picked up speed over the past decade or so. Claims are how brands and products define their value, differentiate from competitors, and ultimately establish a relationship of trust with consumers.?

However today, companies are being pressured to deliver bolder claims with greater and greater frequency. This is complicated by the fact that claims complexity, and hence the need for effective claims management, has increased dramatically over the past several years and is only accelerating. The combination of growing claims complexity and a need to generate bolder claims more quickly has created a daunting challenge for all consumer goods companies.

The good news is that digitalization is enabling the speed and agility around claims that is required for today’s dynamic markets. Furthermore it’s enabling leading consumer goods companies to make bolder claims with confidence which is so essential to win with consumers.?

In the following article I’ll present background around the drivers of this shift toward digitalization, and use a claims management maturity model to lay out four ways in which digitalization is enabling successful companies to create bolder claims more rapidly.

FOUR TOP FACTORS PUSHING BRANDS TO MAKE BOLDER CLAIMS FASTER

• Certainly the rise of digital marketing and social media has accelerated the need for rapid approval of new claims. Lead times for marketing campaigns and other activity has gone from months in the age of television and print advertising to hours and even minutes today. Responding to a social post might require a new claim, and this needs to happen in near real-time to stay relevant. A recent Deloitte report found that demand for content grew by 54% from 2022 to 2023, yet marketers only met that demand 55% of the time.
• The digital age has also enabled smaller, nimble, often digitally native brands to become legitimate competitors to larger established players in record time. As an example, take the latest 2023 New Product Pacesetters Report from Circana (formerly IRI), in which 59% of Pacesetters by count were from companies with less than $500m in revenue (up from 41% in 2022). In order to stave off this threat, larger companies either need to acquire these smaller companies, or compete with their own products and claims brought to market quickly.
• Claim-based innovation and renovation of brands and products is a growing trend as companies seek ways to drive top-line growth and expand market share without relying solely on more expensive, time consuming and risky traditional new product development. This also requires speed in the claims development and approval process.
• Finally, younger generations of consumers are less brand loyal and more willing to try different products that better deliver on their personal needs or beliefs. A new or superior claim can lure formerly loyal consumers away to a competitive brand. As an example, a recent PwC survey found that Gen Z consumers are more than twice as likely to try new brands as Boomers.?

FOUR TOP DRIVERS INCREASING CLAIM COMPLEXITY

• Sustainability and ESG claims are now an essential part of how a company defines a product, brand, and even itself as a company. In fact 80% of consumers in the 2024 PwC Voice of the Consumer Survey reported that they would be willing to pay more for sustainably sourced or produced goods. However sustainability claims are not clearly regulated (though that is changing rapidly), substantiation methods are not standardized, and an error, no matter how unintended, can result in accusations of greenwashing which can cause serious damage to brands and corporate reputation.
• Consumers are demanding more in the way of health benefits from the products they choose to consume. These claims are often driven by novel functional ingredients, in both food & beverage and personal care. Furthermore, health claims taken too far verge on becoming prescription drug claims, which opens up a host of regulatory issues.
• Consumers are demanding to know in great detail what is in the products they choose to use or consume, whether those ingredients are “natural”, and how those ingredients are sourced. Inadvertent or very low levels of certain substances can call into question a company’s ingredient claims and even the trustworthiness of the manufacturer. A very precise understanding of formulation composition down the the nutrient and substance level, and how that may change based on suppliers and batches, can be critical to making truthful claims.
• Finally, regulations are changing at a furious pace. With the EU Green Deal, MOCRA, a host of California and other state regulations, many claim types are in a continuous state of regulatory flux, and rapid action will be required as regulations evolve.

SO HOW CAN DIGITALIZED CLAIMS MANAGEMENT HELP DELIVER FASTER, BOLDER CLAIMS?

A maturity model is a useful framework for showing the progression of claims management capabilities. Typically most companies fall into Stages 1 or 2, with fairly manual, siloed, disjointed processes and systems leading to a very reactive claims management approach focused on mitigating risk. As capabilities evolve through digitalization, claims management becomes more proactive and focused on innovation and top-line growth.

The following are four ways in which digitalized claims management is enabling companies to make bolder claims with confidence. These four approaches are laid out roughly in order increasing claims management maturity, and represent a shift from reactive claims management to proactive claims management.

FOUR APPROACHES TO USE DIGITALIZATION TO ENABLE FASTER, BOLDER CLAIMS

1. Establish A Cloud-Based Single Source of Truth (Stage 3): Simply moving your claims to a cloud-based library and enabling visibility across the enterprise will enable a degree of cross-pollination among formerly siloed business units or geographies. A global single source of truth for claims will enable those looking for claim inspiration to better understand what sort of claims are made in other areas of the company, which will inspire new and potentially bolder claims.

2. Connect Claims Data and Related Documents in Searchable Structured Form (Stage 3): When claims are managed as structured data and connected to the substantiation documentation and to the marketing materials and packaging creative that make use of those claims, a few things happen to enable bolder claims.

- First, companies are more willing to use bolder, more aggressive claims because responding to challenges (or other questions that arise) becomes fairly straightforward. In an unstructured, disconnected claims management process, finding substantiation or understanding where claims are used in-market can take days or weeks. Because of this, companies are often more conservative than they need to be because they are terrified of a challenge. When claims, substantiation, and marketing usage are all connected in a single source of truth, responding to a challenge comes down to a few clicks. Claims support can be produced rapidly, and claims can be withdrawn quickly if needed. All of this leads to more willingness to make bolder claims.

- Second, substantiation can be reused easily. When substantiation is stored in a modern system with the text of the substantiation searchable through OCR, and connected to related claims, that substantiation is able to be leveraged more easily in the future to support additional claims.

3. Link Claims Directly to Supporting Formulation Data (Stage 4): As digitalized claims management evolves, a logical step in this evolution is to connect a claim that is based on composition (product or packaging) directly to that composition data in a user friendly way. Once established, if that formula composition ever changes in a way that might impact the validity of a claim, that can trigger alerts to review the claim. A good example of this might be levels of a certain substance that support a “free from” claim, percent recycled material claim, or perhaps a vegan or kosher claim. Specific suppliers can also be tracked as they often may have differences in composition or related certifications for the same raw material. Even different manufacturing batches of the same product or package may vary in ways that impact certain claims. When claims are tied directly to formula and package composition, more aggressive claims can be used while still maintaining confidence that the claim can be reassessed appropriately if the composition changes.

4. Establish the Foundation for Generative AI Through Digitalized Claims Management (Stage 5): Gen AI has tremendous potential in the world of claims. The same Deloitte report referenced early anticipates that 71% of companies will be using AI for content generation by the end of 2024. ?However a prerequisite for Gen AI is a solid foundation of clean, structured claims data. When claims data is structured, connected to a product hierarchy and related substantiation and marketing materials; all that can then be combined with data on consumer trends, regulatory trends, competitive claims, claim challenge data, and past in-market claim results. Once this is all in place, GenAI has the potential to suggest the most compelling claim for a specific product and consumer target that balances risk and return.

KNOW WHERE YOU STAND, AND PARTNER WITH INDUSTRY EXPERTS

All consumer goods companies, regardless of the category or geography in which they operate, are feeling the pressure to generate bolder claims more rapidly. This is no easy task, especially when considering the growing complexity of claims. However, no matter where your company currently stands on the Claims Management Capability Maturity Model, digitalization can help. Although AI holds tremendous potential for claims generation and product development, focusing on that too early is a mistake. It’s important to build a solid foundation first through a cloud based single source of truth, unified claims data and documents, and integrated formula and packaging composition data.?

If you’d like to learn more about how Veeva can help in your claims management maturity journey to deliver bolder claims more rapidly, please feel free to reach out to us.