4 Ways CPG Brands can Scale Direct-to-Consumer Engagement
This post was originally created by Spredfast before Spredfast and Lithium merged and became Khoros.
Earlier this year Amazon invited some of the world’s largest consumer goods brands to discuss the changing nature of consumer behavior. Last year, Unilever acquired the Dollar Shave Club. CPG brands are seriously considering the impact of the growing direct-to-consumer trend and how to capture more share of wallet. The challenge—and the opportunity—is scale. How do large CPG brands effectively connect one-to-one to drive real business results?
Large CPG brands must effectively connect one-to-one to drive real business results.
The legacy consumer goods companies have traditionally achieved scale through mass marketing and more shelf space. But as consumers shift attention to online shopping, on-demand delivery, and subscriptions, brands are trying to innovate through digital and social. One example is Bear Naked Granola. They identified a consumer need—variety of tastes—and then built a digital campaign focused on going direct. Consumers can build their own granola with the help of IBM’s Watson. Through cross-channel marketing, email and social, this program has increased conversion rates by 230 percent.
Another example is Honest Co. Yes, they sell through retailers, but when you check their social feeds, which are full of cuteness, you will also see direct opportunities to buy. It is not an overly promotional approach, but the brand gives consumers plenty of places to spend money. The CMO, Chris Thorne, states “we focus on developing one-on-one relationships with our customers vs. simply selling them a product.” They are taking a customer-first approach and personalizing content to build more ongoing connection.
One interesting element of this direct-to-consumer trend is that big brands actually already have a long history of one-to-one marketing. Betty Crocker was in fact created in 1921 to personalize letters to consumers. The goal was to create a human connection through letters. Consumers would ask questions about recipes and life, then Betty (a team of people) would write back with answers. The brand today uses digital and social to answer cooking questions.
As more CPG companies attempt to reach customers directly, the challenge is scale, especially in social. Our Spredfast (now Khoros) Research & Insights team has found that more consumers are reaching out to brands on social, over 95%, and expecting a response. Unfortunately, many mentions go unanswered. That is the opportunity, to leverage social care and marketing to reach more consumers one-to-one. Here are four ideas to help scale your direct-to-consumer initiatives:
The challenge for CPG brands looking to connect is scale, especially in social.
- Think like a growth hacker. It doesn’t matter if you work for a company with 1,000 or 100,000 employees, you need to consider the growth mindset. Be laser-focused on growth. Be creative and work across your organization, like the Bear Naked team at Kellogg. Experiment. A growth hacker is part scientist or engineer and part marketer. Test and learn. Can you assign one person on your team to try more 1-1 responses?
- Data is your friend. Yes, direct ROI is challenging with CPG brands, but less so when you are going directly to the consumer. Betty Crocker has more data today about people asking questions through digital and social than a return address on a letter. Honest can track conversions from a shoppable Instagram post. Collect and leverage data about your customer and about the actions they are taking to make better decisions. Data will help build experiments and then guide larger bets.
- Build a bridge between marketing and social care. In many organizations these two teams are separate, but communicate with the same customers. Are your teams talking? Do you have a way to coordinate conversations with your customers? If you are making an effort to connect one-to-one at scale with your customers, it will help to have a unified approach and plan to manage engagement. Hint: Spredfast (now Khoros) has a pretty amazing platform to help.
- Connect social data to customer data. If you are catching a theme, you need to get serious about data and actionable insights. One theme we see from many customers making the investment in one-to-one is integrating social and CRM data. If you’re a CPG with many brands, and each brand has thousands of mentions or opportunities for growth, it helps to have context in those conversations. We recently announced a formal partnership with Salesforce to bring more insights to each customer interaction.
There is a big opportunity for CPGs to build more direct loyal customers. The brands that can quickly scale, especially in social, will realize the most growth.