Bridging the Retailer and Manufacturer Marketing Gap

As seen in 1to1 Media

Using brand-specific, targeted communications can boost sales for both partners.

Retailers and manufacturers have always had somewhat of a marriage of convenience. Although they need each other to succeed, they are rarely true partners, and can sometimes be downright antagonistic. But it doesn’t have to be that way, particularly in their marketing.

“Customers don’t care about conflicts between the manufacturer and retailer; they just want the products they like, conveniently available at an acceptable price.”

They share their most important asset—their customers—and these customers can be loyal to both the manufacturer’s brands/products and the retailer that sells them. They don’t care about conflicts between the manufacturer and retailer; they just want the products they like, conveniently available at an acceptable price.

The solution to bridging the marketing gap is to realize that the customer’s needs come first, or face erosion of both brand and channel loyalty. If the customer’s needs are consistently met, both manufacturer and retailer win as the customer’s loyalty to the brand and retail outlet will increase.

The most successful way to meet customer needs is to use individual-level customer data that powers highly-personalized, relevant offers and messages to the customer via direct mail and email, as opposed to one-size-fits-all messages, such as circulars.

Retailers with loyalty programs are gathering detailed purchase histories for each and every loyalty program member. Manufacturers have also begun to gather this data through direct-to-consumer websites and, in some cases, by setting up their own retail channel. These detailed customer histories provide the perfect opportunity for manufacturers to deliver pinpoint-targeted messages that pay off big.

Manufacturers will keep their most loyal customers coming back, while converting competitive buyers away from the competition. These highly relevant communications can also let manufacturers successfully launch new products to consumers who buy in the category. Each payoff delivers at success rates that greatly exceed less targeted methods.

So what is preventing manufacturers from using customer data in these ways to drive increased sales? There are three major obstacles to bridging the marketing gap between manufacturers and retailers:

1. The retailer owns the data and will not grant access to the manufacturers.

This is really the result of an outdated retailer mentality. In their minds, they “own” the customer relationship and seek to limit the manufacturer’s influence. In fact, they do own the medium (shelf space), but to try to limit direct access to the customer is actually self-defeating, particularly to strong brand loyalists. Wouldn’t it be more productive to use that brand loyalty to increase store sales?

2. The retailer may have established programs for manufacturers to participate in, but those programs have limited ability to target individuals based on past purchases.

This condition is more commonplace as retailers have created co-op direct marketing “vehicles” in which manufacturers can participate for a fee. These programs are usually underutilized by manufacturers because the retailer usually combines multiple manufacturers into the same vehicle, diluting the manufacturers’ message and lowering redemption rates.

3. The manufacturer has access to customer data, either through the retailer or has its own, but lacks the knowledge or experience to create personalized offers and messages.

The manufacturer has the opportunity to leverage customer-level data—but struggles to do so effectively. This is quite common, as the responsible teams are usually part of the product/brand management world and have more experience with mass media marketing than with 1-to-1 marketing.

“The solution to bridging the retailer/manufacturer marketing gap is to realize that the customer’s needs come first, or face erosion of both brand and channel loyalty.”

There’s a way to surmount these three obstacles: create brand-specific, highly-targeted direct marketing vehicles that deliver more relevant, personalized, cross-channel 1-to-1 messages and offers.

By sending messages and offers only to the customers and prospects most likely to respond, retailers and manufacturers can raise redemption rates and support for future programs. And by matching the message to the individual based on personalized customer data—using today’s software to create variable messaging in less time than ever before—they can personalize right down to specific products.

The result? With highly-targeted, relevant communications, retailers and manufacturers can bridge their marketing gap and mutually benefit from more loyal, profitable customer relationships.


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