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Cpg brands winning big with social media marketing


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Online retailing of CPG goods is rapidly growing. Although the challenges for this industry are many, they don’t seem to deter ambitious CPG brands from eyeing a piece of the social media pie.

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Cpg brands winning big with social media marketing

  1. 1. CPG Brands: Winning Big with Social Media MarketingSocial Media for the CPG IndustryThe last few years have witnessed manufacturers of Consumer Packaged Goods (CPG) embrace social media with greatenthusiasm. When it comes to social media, industry giants like Kraft and P&G have adapted rather impressively,having not just a Twitter or Facebook presence, but also putting immense efforts at being the „customer‟s brand‟.Where there are success stories, there are also instances where many CPG brands continue to face teething troubleswith online marketing. The reasons for this could be many; though one of the primary causes could be attempts to fitsocial media marketing in the company‟s traditional marketing strategy. This may not be the wisest approach as socialmedia is a separate, dynamic and growing space, while traditional marketing is a completely different ball game. It isnot uncommon to find social media added as an afterthought to a brand‟s traditional marketing strategy. According toa new national study from The Shopper Technology Institute, two of three CPG companies said that social mediaaccounts for less than 5% of their marketing budget. These may be worrying statistics; however, the future of the CPGindustry in the digital marketing space does look promising. Let us look at some reasons why CPG brands should givesocial media marketing its due importance: Of the total companies surveyed (The Shopper Technology Institute Study) 76% said that the budget for social media has increased in 2011 compared to the previous year. The survey confirms that consumers are willing to connect with brands via social media; although this is mainly influenced by the degree of emotional connection they have with the brand. For manufacturers of consumer packaged goods, this translates into an opportunity waiting to be explored. The most commonly used networking channels by CPG brands are Twitter and Facebook. For the 11% that don‟t use either one, we recommend they start doing so, considering the fact that Facebook and Twitter are two channels where they are most likely to find their target audiences. A joint-study, conducted over a two year period by comScore and dunhumbyUSA, found a median 21% in-store sales increase among shoppers who had been exposed to online ads for CPG brands compared to those who had not seen them. Almost one-quarter of campaigns received a boost of +40%.; a good reason for CPG manufactures to further increase focus on their online promotional strategies. According to eMarketer, 2011 is likely to witness 35% increase in online CPG advertising. Although the growth will slow, consumer products are likely to have as much as 10% of the total ad spending by 2015.P&G‟s re-entry into e-commerce via Facebook indicates just howcrucial social media is becoming to CPG brands. The companyrecently added “Shop Now” buttons to the Facebook fan pages forseveral of its brands including Gillette, Olay and Tide. The globalgiant is one of the many CPG companies that are exploring theconcept „e-tailing‟ with renewed interest and are talking internetmarketing more seriously than ever before. Considering the factthat the modern consumer is willing to make purchases online, therecent upsurge in social media activity by CPG brands isn‟tsurprising at all. Overcoming Challenges Social media can be a challenging space, especially for marketers whose comfort zone is traditional media and those who are hesitant about selling online. The ever changing taste of the social-savvy customer means CPG brands have to be alert and on-their-toes while advertising© Position2, Inc. 1
  2. 2. and marketing their products online. Winning big with social media marketing isn‟t simply about creating fancy Facebook pages or YouTube videos; it comes down to overcoming everyday challenges and meeting the customer‟s needs as quickly and as efficiently as possible in a way that‟s also profitable to the company. o Retaining Customers’ Attention: While capturing customers‟ attention is one part of the challenge, retaining it long enough to convert them to loyal shoppers is easier said than done. Maintaining the activity can be an uphill task; but no one does it better than Kraft. Besides developing interesting online content, a lot of effort goes into developing their webpages on various networking channels. On checking out the company‟s Facebook page, one would know that immense background research was conducted before it was made available to visitors. Kraft added the „fun‟ element to the page by featuring recipes and meal ideas, at the same time giving out nutritional tips and allowing visitors to chat with their kitchen experts. The company not only gives out product information, but also tells its customers how they can use them to create delicious meals. Little surprise that their +760,000 Facebook fans keep coming back for more. o Dealing with Feedback: One of the major reasons why CPG brands hesitate to embrace social media is the apprehension of negative feedback. Customers, who were previously bombarded with press and TV ads and had few outlets to make themselves heard, are only too happy to be able to speak out via the various networking channels out there. In order to keep up with the competition, many brands create a Facebook page or a Twitter account, only to go silent during a PR crisis. Our advice? Listen to reviews, they offer valuable information on how you can improve your product or marketing strategy further. Negative feedback can sometimes be good; by responding to unhappy customers, you could turn them into brand loyalists. o Diving Head-First Can Hurt: For CPG marketers, the online space is not their most natural place for marketing. Yet, marketers are faced with a choice of either joining in or getting left behind. However, simply diving head first without having clearly defined goals and without understanding trends may not be the best approach. Here‟s what we suggest; a) define your company goals instead of simply imitating what your competitor does b) choose the best possible networking tools based on the goals and c) monitor the digital space by using social media monitoring tools like Brand Monitor™ and find out what the trends are, what demographic you should be targeting etc, and then design your online marketing strategy accordingly. Making Customers Feel Valued Veterans at offline marketing, CPG brands need to understand that social media marketing puts the customer in control. Unlike earlier, when CPG marketers could claim that their products were „best in the market‟ without having to worry about being contradicted by consumers, they are handling online promotions with kid gloves. In order to avoid another „Nestle-like„ situation, brands are doing everything from setting up 24/7 command centers to investing in building a fully-fledged crisis management team. While it is not always possible to completely understand the social consumer, making them feel valued is a great first-step for CPG brands looking to nail it. Here are some suggestions:© Position2, Inc. 2
  3. 3. o Social Couponing is Highly Effective: One of the major reasons why people visit a brand‟s social media webpage is for discounts and coupons. By offering discounts and giving away coupons, brands a) make their customers feel valued and b) give them a good reason to revisit their webpages. Although some brands are worried that coupons may reduce the premium value of the brand, most agree that social couponing offers unique benefits, one of them being building a loyal customer base. According to a survey from Ipsos Marketing, Consumer Goods, the second most important reason why people visited a CPG brand‟s website is to obtain coupons. This explains why the likes of General Mills and Unilever, after partnering with Groupon, have had a solid customer base and a loyal fan following. o Being Best Friends: It is every CPG brand‟s wish to be best friends with their customers. Although coupons and discounts contribute towards making the social consumer feel special, moving up the relationship ladder is all about being available when they have something to say. An overload of sales talk won‟t solve your customer‟s problems; being best friends is all about listening and responding. Listening in and engaging with your customers online shows that they are important to you and you care enough to be there to soak in the suggestions, act upon complaints and interact with them. o Going That Extra Mile: When the packaged goods industry ventured into the world of online marketing, it was all about creating interesting online promotional material, offering the occassional discounts and resolving customer complaints when required. This, however, is slowly changing. There are those companies that monitor conversations pertaining to their brands and meet customers‟ needs as they arise; and then there are the others that go the extra mile to give their customers much more than they have asked for. General Mills, which has a well connected online customer base, is one such brand. Besides marketing their regular range of baked products online, the company also offers gluten-free products aimed at 2% of the population with Celiac disease as well as the additional 10% interested in avoiding gluten, a demographic that was otherwise dismissed as too small and insignificant to target profitably. When the word about General Mills‟ gluten-free range was out in 2009, the news spread like wildfire across Twitter and Facebook. Now that‟s what we call making customers feel valued! Learning by Example: Some Do’s and Don’ts It doesn‟t take much for the social consumer, with their short attention spans, to abandon one brand‟s Facebook or Twitter page and check out what their competition is doing. Although the non-CPG social media stars like Starbucks and Nike have mastered the art of customer retention and online marketing, some brands in the CPG industry are testing social-media waters. Nevertheless, the packaged goods industry boasts its own social media stars that have effortlessly and successfully incorporated online marketing into their offline marketing strategies. As we look at the success stories, we have also listed certain case studies that highlight some things that should be best avoided. Here are some do‟s and don‟ts: The Don’ts: o The @SwansonChicken Account: A definite fit into the „don‟t‟ slot, Campbell Soups‟ @SwansonChicken account is updated a tad infrequently than their fans would like. With less than 2,500 followers, the CPG behemoth is an example of how infrequent activity can impact the followers count. o Where’s my Balsamic Ketchup? Heinz‟s Facebook page recently promised fans that they could buy their limited edition Tomato Ketchup with balsamic vinegar, only to inform annoyed© Position2, Inc. 3
  4. 4. customers who had trouble purchasing, that they were experiencing “technical difficulties” with the Balsamic Ketchup tab. This was soon followed by several posts, where the complaints ranged from “Fix that tab! I got fries waiting!” to “How do you get the Balsamic Ketchup you promised on the 14th?” The food conglomerate has assured fans that they would soon fix the glitch. What can the others in the industry learn from this? Fans have little patience; therefore, it would be a good idea to perfect those social media pages and test them before going ahead with promotional announcements. o Spamming the Ragu Sauce Way: This is clearly an example of what a combination too many tweets with irrelevant content can do to a company‟s reputation. While the @Ragusauce twitter handle is frequently updated, a closer look reveals that the posts aren‟t the best example of appropriate content. Spamming your followers sure is a „don‟t‟. And Some Do’s: o Do it Like Old Spice: Previously, Old Spice was known as the brand used by “grandpa”. P&G aimed to change this; and that‟s exactly what they did by roping in the hunky, towel-clad Isaiah Mustafa to market Old Spice to the younger demographic. The YouTube videos that were aired were not just a massive hit, but also successfully changed the brand‟s image by using the tagline “The man your man could smell like.” For older brands aiming their products at younger audiences, we say „Do it the Old Spice Way‟. o Learning from Little Debbie: CPG brands have a lot to learn from American snack cake brand, Little Debbie, which comes across as one of the most human accounts on Twitter. The @LittleDebbie handle features tweets that give the impression that the person handling the account really cares.ConclusionFor the Consumer Packaged Goods industry, social media was a relatively new and unexplored space. However, theentry of brands like Kraft, General Mills and P&G, to name a few, into the online marketing space, has changed that.From creating some memorable YouTube campaigns to setting examples in customer engagement, when it comes tonew media, CPG brands are no longer green behind the ears. While the big names in this industry have masteredsocial media marketing, there are other brands that are rapidly following suit. This is unsurprising, considering thefact that consumers no longer want to queue up at grocery stores and are willing to fill up their shopping carts online.This translates into a great opportunity for CPG brands looking to build a loyal customer base and get those salescharts soaring.Traditional media will always have its special place for CPG marketers. But relegating social media to a small,insignificant place in a company‟s marketing strategy means getting left behind in a very competitive digitalenvironment. With more and more consumers doing their research online before deciding to make a purchase, brandsnow have the opportunity to entice the smart shopper by featuring detailed product and pricing information.Online retailing of CPG goods is rapidly growing. Although the challenges for this industry are many, they don‟t seemto deter ambitious CPG brands from eyeing a piece of the social media pie.© Position2, Inc. 4