The future of Effective Brand Growth Findings from our industry Think Tank

For 30 years, Kantar Added Value has been working across categories and regions on strategic marketing challenges, and clients are telling us that now is a pivotal moment, that their organizations are at a crossroads: either they evolve to exploit the massive opportunities that data and digital technology provide, or they lose out.

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Disruption defines this new era.

Thanks to a never-ending stream of new entrants and constantly expanding channels, consumers have more choice. Marketing has become more promotional and aggressive on price as consumers benefit from greater transparency in a world still recovering from the 2009 crash or suffering at the hands of globalization. They are also demanding more control: they want to engage on their terms—when, where and how it suits them.

Technology has empowered customers in ways unfore-seen a few short years ago: how people engage with brands, the choices they exert, the journeys they go on. Expectations are fueled by tech companies which can move at the speed of light, beta testing and iterating products, creating and adapting communication in real time, fulfilling without friction.

Organizations’ ways of working are severely strained. Marketing is seeing more demand from more stakehold-ers, across more touchpoints, with a need for greater effectiveness and efficiency. At the same time, they have less access to resources—time, money and people. The avalanche of big data is having the effect of slowing businesses down, rather than fulfilling its promise of faster, more targeted decision-making.

In one way, our role as stewards of businesses and brands has not changed at all: we have to stimu-late demand to deliver growth. But in most ways, how we do that has changed out of recognition, and will continue to do so.

Business is entering a new era. As one client told us:

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The world got flatter. Consumers are in control. Traditional market-ing doesn’t work anymore: when, where you connect with people and at what frequency.

Effective Brand Growth Thinktank

At a time when corporations are having to adapt to a new Business. As Usual, we spoke with a selection of senior clients across multiple industries from financial services to retail, from hospitality to CPG/FMCG and from automotive to tech. What will mark out the winners and losers in the race for tomorrow’s business growth?

Figure 1 below is a summary of what we learned.

Fig 1: The New Growth System

Personalization

Personalization

Custumer @ Heart

VISION

HOW

CUSTOMER BENEFIT

Attitudinal AND Behavioral

Consumer AND Shopper

Predictive

Role of Real-Time

The Right Talent

Activation - enabled

We will unpack each element in more detail, but in headline: the ultimate vision is genuine customer-cen-tricity; the ultimate benefit to the customer is personali-zation. Neither of these should come as a great surprise: but it is the how that has eluded corporations so far, and represents the key. The way to achieve this is by creating a Growth System—how the customer is under-stood, communicated with, how they experience your brand.

And key to the Growth System are: how to systematical-ly monitor, adapt to and even predict customer needs; ensuring the integration of datasets from across the or-ganization and from up and down the value chain; and the need to define Real-Time—where it adds value and where it does not.

Vision: Customer @ Heart – Still A Long Way Off

It will come as no surprise that every person we inter- viewed talked about customer-centricity as being at the top of their agenda, with major initiatives underway en-compassing a range of skillsets.

“ We need to deliver value to our customers better than anyone else, and to do that, we need to organize all of our people, our systems, our processes— everything—around the customer .”

The main challenges here are legacy systems, structures and ways of working. So, if you are a financial services, mobile telco or retail business with a huge amount of customer data, that is actually usually a problem, not an advantage.

First, there is the issue of legacy systems, data quality and relevance. One interviewee talked about how a business unit head had been asked at a Board meeting how many of their 16 million customers were active and how many high-value. He could not answer.

“The thing that really hinders us is antiquated IT systems.”

Secondly, there is the issue of silo-based structures and the behaviors they encourage:

“We’re still in the foothills, but it is mostly to do with the or-ganizational difficulty of getting everybody to join up and understand that we are now in a very different world.”

“It’s the usual thing: everybody protects their own patch.”

And while transactional data can be a powerful source of behavioral insight, it has to be complemented by attitud-inal data to make it meaningful:

“We need the WHY as well as the WHAT to identify future opportunities.”

All of this makes life harder for businesses that have been around for longer:

“For legacy brands, the shifts and investments required to be customer-centric are much more substantial than for brands born in the tech age, which understand from the beginning the need for personalization and choice.”

How: The Growth System

None of this is new, so the question is, “what will make customer-centricity a reality?” Listening to business lead-ers in our study, they know they have the pieces of the puzzle—the problem is how to put them together:

“We have more data than we know what to do with, but we don’t know how to use it to benefit the customer.”

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“We have tons of data in retail, but it is really not easy to connect all of them. Whoever is the first to connect them up will have real competitive advantage as a business, not just in terms of marketing.”

This was a common refrain across the people we interviewed.

External Big Data vendors are held responsible by some for over-selling into senior executives, and it has taken time to get the train back on track:

“Third-party Big Data providers have promised a lot and failed to deliver. Those organizations that can move be-yond the current data morass and align smart resource and standardized processes against assembled data will see success. We have started to.”

Systematically linking the pieces of the puzzle together to create meaning and action against strategic insights is a massive business challenge:

“We have an awful lot of data on consumers, but piecing it together is the difficult bit.”

“We have the right amount, it’s just not joined up.”

Easier said than done, but here’s the key:

“The sources of data are growing at a faster rate than the industry can develop systems for.”

A SYSTEM. Or more accurately, a customer-centric Growth System.

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Confidence in the use of Big Data has fallen

Clients need data to be joined up, to be easy to take action against, to be delivered more quickly and more in the mo-ment, and to be measurable in terms of ROI.

Segmentation has historically offered the touchstone for strategic planning, a foundational framework that provides detailed, multi-dimensional understanding of consumer demand as the basis for:

-Maximizing existing brands through better targeting,positioning and communications;

-Creating new brands, products and services throughinnovation;

-Organizing effectively, by structuring the productportfolio against defined needs and opportunities,and identifying gaps and inefficiencies.

But with the advent of new technology, there is an op-portunity to do much more by hardwiring the segmen-tation dataset into a broader data ecosystem within theInsight and Media data universes, and beyond, to plat-forms such as Facebook. This provides the potential toengineer a more precise, more scientific approach toreaching consumers, and make your marketing the goldstandard in efficiency and effectiveness.

Greater effectiveness thanks to richer, more 360-degreesolutions, which drive both clearer, more comprehensiveand actionable strategy and more relevant andaccurate activation. This in turn supercharges ROI of keyelements such as communications and innovation deve-lopment spend;

Greater efficiency thanks to the philosophy of dataintegration, meaning client organizations will needfewer, more purposeful frameworks, all lining up toform a seamless and fully connected Growth System.

At Kantar Added Value, using our GrowthFinder segmen-tation as the core backbone, we can connect datasetsacross the consumer, shopper and media worlds to forma complete picture of the people your companyserves, and refresh the data on an ongoing basis:

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Media (Kantar Media, Group M and Xaxis) – to add lifestyle behavior, provide media consumption profiling, inform media planning and enable programmatic media buying;

Retail & Shopper (Kantar Worldpanel and Kantar Shop-com) – to provide insights into how consumers shop, and drive Consumption Moment retail strategy and typology shopper strategy;

Tracking (Kantar Millward Brown, Kantar TNS and Kan-tar Added Value): to monitor Consumption Moment size, and to gauge brand and product fulfilment;

Social (Facebook and Twitter): to enrich Consumption Moments with social media data to see emerging pat-terns of behavior over time, and for real-time audience targeting.

The Six Components of the Growth System

1.Attitudinal AND behavioral—creating a foundationaldata backbone. Until now, corporations have had to optfor EITHER an attitudinal OR a behavioral segmentation:one traditionally offers greater depth, the other greateractionability. Now, you can have both:

“so that we can track and monitor impact more closely.”

“It’s like a next-gen marketing mix evaluation tool— you have the ability to constantly measure and adapt how you are doing.”

2.Consumer AND shopper—bringing the two worldstogether. Having separate consumer and shopper seg-mentations owned by different parts of the organizationis the past. Bringing consumer strategy and sales activa-tion together can be done now:

“Historically, we’ve hit this limitation: we can’t have both a rich attitudinal consumer segmentation enriched by behavioral and linked to Shopper. Now we’re working it out.”

3.Predictive—to anticipate and act against predictedbehavior. Hard-wiring predicted future behavior into thesegment creation means you can constantly stay onestep ahead in your activation:

“Being able to predict where consumers are headed and how they will respond to products and communications is a HUGE idea.”

“Beta-testing creative against target segments on an ongoing basis is massive.”

Media

Retail & Shopper

Tracking

Social

4.Activation-enabled—to bridge between traditionalinsight and media datasets. Amazingly, there has been no consistent linkage between brand targets developed through the strategic planning process and the activa-tion segments developed by media agencies. Until now:

“For me, it’s the Holy Grail. If we can marry the identifi-cation of people in our consumer segmentation with the buying of media against those segments, it’s cracking the Lord Leverhulme challenge!”

5.The right talent—building and structuring the cap-ability for the new world. The first four components are about tools and processes, but we all know that people are what drives systemic change. Over-performing brands are investing in their people to integrate, analyze and act:

“We have to think about organizational and training aspects to make data integration successful.”

“We need to integrate across all contact points and have the talent to understand and make recommendations systematically.”

6.The role of real-time—balancing big picture with nimbleness. Everyone is scrambling to incorporate real-time in their armory. But few stop to think when it is relevant and when it is not.

“Some things are too important to be real-time.”

“We have too much info and not enough headspace to crunch the implications.”

“Some things can change within minutes—merchandis-ing, deals at a given point in time. So, real-time can be incredibly important there.”

Personalization

But what’s the benefit for customers? If corporations get caught up in the intricacies of their data strategies, their customers will pass them by:

“I have an allergic reaction when people talk about Big Data. We need to remind ourselves that this is about understanding customers’ needs better, ensuring that we have a range of channels to fulfil those needs, and mak-ing the experience as convenient as possible.”

The real benefit to customers, then, is personalization. Business transformation has to start with customer needs and understand that change is the only con- stant, so you need to hardwire an ongoing monitoring of the future, with personalization as the endgame:

“As a result, we have integrated a marketing cloud that

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allows us to personalize customer experiences, to make every touchpoint more relevant and rewarding.”

And this end benefit in turn brings efficiency in spend:

“Tech not only enables experiences, but allows us to cut costs. Less wastage is the name of the game. This year alone, will reduce our DM from 100 million to 50 million.”

“I observe that we do things because we have always done them. We send out lots of e-mails and letters, and we track the volume of activity, but we have no real idea about relevance and effectiveness. If we could identify targets more accurately, message them and make offers when and how they want them—monitor and adapt—then there is a massive cost-saving opportunity.”

Conclusion

Connecting the data silos into an interlinked ecosystem provides the opportunity to develop unparalleled under- standing and connection with existing and new con-sumers, establish significant and sustainable advan-tage over the competition and drive industry-leading marketing efficiency and effectiveness.

Companies are at various stages of this journey. But thanks to technology, the destination of that journey looks increasingly similar, regardless of which industry you are in. The idea of an organization aligned around the customer is not a new one. But consensus is emerg-ing about how to actually achieve it.

Attacking the problem systemically and harnessing the various datasets at the company’s disposal into an integrated, customer-centric Growth System is the key. Delivering on this will break down internal barriers and provide frictionless customer experiences that feel as if they are genuinely for the individual. And in doing so, marketing efficiencies will increase exponentially.

“The goal is the idea of creating a brand that happens to be wrapped around a business. The entire thing is brand thinking and customer obsession: how do we use the data that we are building up, so that we can add more value to customers? Using layers of data to work more effectively, enable growth and answer the ROI question.”

The destination and the roadmap are clear: the challenge is to stay the course. As one interviewee put it:

It’s OK to eat the elephant one chunk at a time.

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Have you created a foundational data backbone that combines attitudinal and behavioral?

Have you brought the worlds of consumer and shopper together?

Are you able to predict behavior and act against it?

Have you created an activation-ready bridge between insight and media datasets?

Do you have the right capability to flourish in the brave new integrated world?

Have you hardwired into the business an understanding of where real-time adds value and where it does not?

So, when you think about your own organization and its quest to put the customer at its heart with the goal of personalization at scale, how do you measure up on the Six Components of the Growth System:

If the answer to any of these questions is yes, then you are already likely ahead of the game.

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Since implementing our work, the Mondelez stock price is up nearly twofold, and significant savings efficiencies have been achieved since aligning the global businesses.

The Global Snacking Framework has become the found-ation on which we hope to build so much of our strategy for growth moving forward. The Kantar Added Value team feels like an extension of our own team, and do a great job of bringing in other parts of Kantar to give us a rounded and future-proofed perspective on the exciting oppor-tunities ahead of us.Paola Vacchini, Consumer Insights Director

Kellogg’s has experienced a 15% increase in stock price from initial project implementation.

As a result of Kantar Added Value’s work, we have devel- oped and refined globally led strategies for Breakfast and Snacks that will fuel aligned, impactful actions to drive growth. We are excited to continue our journey with Kantar Added Value as they provide thought leadership and a strategic lens to our consumer-led business strategies.Camilla Jenkins, Director, Global Insights & Planning

Our work for Accor, cen-tered on the Ibis brand portfolio, has driven their personalization strategy, and Accor has since opened an Ibis hotel roughly every 3 days. Revenue is up 4.1% and RevPAR is up 4.2%.

Thanks to the work carried out by Kantar Added Value, each of the brands has an iconic target. We have a crystal clear un-derstanding of who these people are and what they expect from a hotel and so we can target them accordingly. The Ibis family has created the conditions to outperform all the com-petition.Peter Verhoeven, COO Hotel Services, Northern, Central & Eastern Europe

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For insurance business AIA, personalization has come in the form of both communication and product. The result has been a 341% and a 943% increase respectively for key new products developed in annualized new premiums from target segments.

This work has been a gamechanger for us. It has given us powerful insights which we have utilized to develop our cus-tomer propositions and campaign strategies. This is a breakthrough innovation for our category.Knattapisit Krutkrongchai, Head of Strategy

Washington GasRenewals up 5%.

“I think one of Kantar Added Value’s challenges was they were working with an organization that wasn’t filled with the depth of marketing professionalism that they are used to. And yet they were willing to take everyone along with them—from IT to sales to customer service. And that’s what’s making it possi-ble for us to make this whole thing very actionable.Harry Warren, Former President

PepsiCo united a $60B or-ganization around a single global model, providing a common language to talk about the landscape, the consumer, the business and growth opportunities.

“In my career, I’ve never witnessed a piece of work that has had so much impact on a business: that has changed the conversation within an organization, that has actually gal-vanized an organization around an agenda.Peter Harrison, Former SVP Consumer Insights

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