In the consumer goods industry, competitive advantage and customer knowledge have long gone hand in hand. By learning how consumers think, by anticipating which products will create a buzz in the market, leading brands develop winning products and plan their production schedules in time for a rush on the stores.
In itself, this isn’t new. But today, as CPG companies face complex new challenges — such as in the form of evolving consumer buying patterns, or in the arrival of a new wave of disruptive competitors — understanding the market is becoming even more important. Indeed, it is becoming a matter of survival.
In a world where one-third of the population — and at least 9 in 10 young adults — use Twitter, Facebook, and the wider blogosphere, many believe that the best place to understand changing consumer behavior is on social media. While more than half of marketers say social media has helped them improve sales, CPG companies have sometimes been overwhelmed by the sheer volume of data generated on these channels. They have also found it difficult to know where to focus their activity. They know social analytics is valuable, but how can they ensure they are using it to maximum advantage?
In our view, there are four principal areas where social analytics can give CPG brands the insight they need for success in a challenging market. In each of these areas, marketing plays an integral role and will continue to do so as social analytics grows in importance.
From insight to innovation
Consumers have seized the opportunity to share their views and opinions on the products they engage with. If they don’t like something, they let the world know. In response, leading CPG brands are listening to millions of conversations online and carrying out sentiment analyses, identifying the positive and negative comments being made about their products. Using this insight, they can breathe new life into their R&D, whether by tweaking existing products or by developing entirely new ones to satisfy an emerging trend.
Outreach on the individual — and influencer — level
By analyzing who is talking about their products online, CPG marketers can develop a deeper understanding of the consumer archetypes and personas that respond best to their products. From this, they can develop stronger relationships by tracking and reaching out to their biggest fans with customized special offers that encourage loyalty and drive new interest. A further step is to pinpoint the key influencers — such as bloggers and YouTube stars — and to encourage them to promote your brand at scale.
Smarter, more agile marketing
Traditional mass-media advertising and marketing campaigns can feel like a one-way street, making it difficult to track success at any great detail. Through social media, however, brands can create a smarter and more agile approach to marketing. Part of this comes down to enhanced measurement and more effective KPIs. CPG brands can, for example, analyze changing sentiment in the wake of a major promotion, or monitor the rate of follow-through clicks and requests for more information.
CPG brands can also get smarter by keeping track of their competitors’ marketing strategies on social media. They can see how their rivals’ approaches differ from their own, learn quickly from their successes and mistakes, and prepare to revise their own strategy accordingly.
Prepare the business for a changing world
As well as tracking sentiment around specific products, CPG firms can monitor interest in digitally enabled shopping habits such as the growing trend for consumers to buy directly from manufacturers online, rather than through retailers. Direct-to-consumer shopping provides huge opportunities for brands but, for many, it is a daunting step that involves significant investment upfront. By tracking interest through social channels, however, brands can be more confident that their decision will be the right one.
Conclusion: The genie is out
In CPG, the social analytics genie is very much out of the bottle. For many brands, ongoing success in innovation, marketing and strategic planning depends on their ability to work with social data effectively. This is why we see industry leaders establishing ever-more mature analytics capabilities. We see them connecting their existing platforms to social channels, via application programming interfaces, and introducing an additional layer of analytics to ensure access to the insight they need. For them, the future is social.