CRM Strategy and Tactics Development

Collaborative CRM Workshop
04 Strategy and Tactics Development
1 Collaborative CRM 2005 – 04 Strategy & Tactics Development Copyright ECR Europe 2005. All rights reserved. Version 7.0 June 2005
Collaborative CRM Workshop - Agenda
 What are the key challenges facing the industry in Europe
Introduction  What is Collaborative CRM
Introductionto
toCollaborative
CollaborativeCRM
CRM  How can Collaborative CRM improve the industry dynamics and
performance
 What are the personal opportunities for certification
Partner  How do you identify and engage with the right Partner for
PartnerAlignment
Alignment& & Collaborative CRM
Project Objectives
Project Objectives  What are the key decisions to make before working collaboratively
 How do you establish objectives, target benefits and project plan
 Collaborative Segmentation – How is it done

Segmentation
Segmentation&&Scorecard
Scorecard  How do you develop a pragmatic, valid Segmentation
 How do you establish goals which focus on the target Segment
 What are the strategic options and how do you choose them
Strategy
Strategy&&Tactics
TacticsDevelopment
Development  What are the Tactical options for delivering the Strategies
 How do you plan effectively together to ensure the best implementation

Implementation
Implementation&
&Measurement
Measurement  What are the key considerations for success
 What measurement criteria can you use
 Which ‘real world’ initiatives will be progressed

Project
ProjectScoping
Scoping&
&Next
NextSteps
Steps  What are the barriers to progress and how can they be overcome
 What is the plan & next steps to make them happen
Introduction
Introductionto
toCollaborative
CollaborativeCRM
CRM
Objectives
Partner
PartnerAlignment
Alignment&
Project Objectives
&  To understand how to identify the
Project Objectives
Strategies and Tactical options for meeting
the needs of the Target Segment
Segmentation
Scorecard
At the end of this section you will:
 Understand how to build a strategic plan to
Strategy
Strategy&&Tactics
TacticsDevelopment
Development meet the Shoppers needs
 Know how to develop a list of potential
Tactics to achieve the Strategic plan
Implementation
Implementation&
&Measurement
Measurement
Project
ProjectScoping
Scoping&
&Next
NextSteps
Steps
What is a strategy?
“An elaborate and systematic

plan of action”
Or put another way……
“Strategies are the BIG IDEAS that

will achieve your Scorecard Objectives”
What do strategies do?
•Strategies are a framework within which you can make consistent

day-to-day tactical decisions
Leaflets
STRATEGIES;
STRATEGIES;
Promotion
Set
SetDirection
Direction
Frame
FrameDecisions
Decisions––“will
“willand
andwill
willnot
notdo”
do”
Establish a firm stance
Establish a firm stance
Pricing
SMS
The purpose of strategy
What
Whatdo
dowe
wewant theSHOPPER
wantthe SHOPPER
to do differently?
to do differently?
Buy a different product?

Shop more often? Spend more per purchase?
Try something new? Get excited about shopping?
Become more loyal? Buy more profitable goods?
????????????????????????
How do we do this?
 By developing strategies that create Long Term Relationships

with the target segment
 Remember – – it is called Collaborative Consumer Relationship

Management, so it is important to build a long term relationship with the
shopper, not just a short term return
 A key tool to do this has been developed for you to use
What does a strategy look like?
•A simple statement that gives clear direction to What we will do and How to
achieve our scorecard objectives
•The Collaborative CRM Strategy Summary Table also includes clear details of important supporting
information
What does a strategy look like?
 Example
•A simple statement that gives clear direction to What we will do and How to
achieve our scorecard objectives
•The Collaborative CRM Strategy table also includes clear details of important supporting information
How do you develop Strategy?
1. Segmentation 3. Scorecard
2. Working Proposal
Strategy is
informed by
the
Segment’s
Criteria and
the
identified
needs – the
Value
Drivers
4. Synthesis (Creativity and judgement)
1. Segmentation
X  Which segment we are focussing on &

who are the shoppers?
X
X  What do we want the shoppers to do
and what needs will we meet (what is
X their behaviour change)?
X
X
2. Working Proposal
X  Which products & categories?
X
X  What qualitative benefits will this strategy
deliver?
 What challenges are there to build on?
X X
X
X
X
3. Scorecard
X  What quantitative benefits will this
X strategy deliver (what is the size of the
target)?
 What do we want shoppers to do (the
outcome of their behaviour change)?
X X
XX X
X
X
How do you develop Strategy? 4. Synthesis
 How can we bring together what we know
to directionally summarise what/ how we
want to do with our target shoppers?
Analysis/  What will the top level communication &

Judgement X
Creativity
tactical themes look like?
X X
 What other benefits/ issues/ challenges
might there be?
X X X
XX XX
XX X
XX X
What are the requirements of a ‘good’ strategy?
 Sufficient
 identifies all the key decisions that can achieve the Collaborative CRM objectives and
opportunities
• Addresses the right issues/opportunities
 Sustainable
 Good strategies produce competitive advantage over time.
• Leverage key strengths of the partners
• Exploit competitive weaknesses
 Selective
 It is not a "shopping" list of everything we'd like to do.
 Synchronised
 Capitalises on the strengths and capabilities of each organisation which must
participate in executing the strategy.
What are our Strategic Options?
There is a ‘Menu’ of Strategies available
STRATEGY DESCRIPTION
The Trial Strategy is a joint CRM strategy aimed to achieve the first purchase/ consumption (of
Trial a Brand/ Product / Company / Category) on the part of a specific target Consumer
The Penetration Strategy is a joint CRM strategy, aimed to develop the number of Consumers
Penetration who purchase/consume (a Brand / Product / Company / Category) within a specific target
The Frequency Strategy is a joint CRM strategy to encourage Shoppers to purchase the Brand
Frequency / Product / Category more often
The Transaction Strategy is a joint CRM strategy aimed at increasing the level of purchases/
Transaction/Weight of
consumptions of current users (of a Brand/ Product / Company / Category), involving the growth
Purchase in the Category
The Conversion Strategy is specifically aimed at getting Category Buyers to buy more of their
Conversion purchases in the Partner Retailer. It is appropriate when analysis has shown that Shoppers from
the target Segment are shopping in the Retailer but NOT buying the Brand / Product / Category
The Customer Retention Strategy is a joint CRM strategy aimed at developing the level of
purchases/ consumption (of a Brand/ Product / Company / Category) over total purchases /
Retention (Loyalty) consumption on the part of a specific target Consumer (“share of wallet” or “share of
requirements”)
The Profit Strategy is a joint CRM strategy aimed at enhancing the value chain profitability, for
Profit both parties. It is appropriate for categories where top line growth is challenging. It is typically
delivered by efficiency gains/cost reduction, rather than price increases
What if we need a strategy that isn’t on the
menu?
! CHECK STEP !
 If you cannot identify with one of the menu options then develop your own strategy
 This is the chance to be creative, and create new ‘out of the box’ thinking
 Think about the real needs of your target segment

 Make the strategy about delivering a real point of difference versus completion to attract
this group
 Watch Out!
 Ensure your strategy follows the worksheet and is robust and fact based
! CHECK STEP !
.
.
Having developed a strategy – Re-check against Scorecard

Is the strategy SUFFICIENT?
! CHECK STEP !
Partner
PartnerAlignment
Alignment&&  As with any demand project, the
Project
ProjectObjectives
Objectives majority of costs exist in the
implementation stage of the project
Segmentation
Scorecard 2)  If your strategy does not meet
1) .
scorecard criteria..
1) Return to generate an alternative
Strategy
Strategy&&Tactics
TacticsDevelopment
Development 3) strategy or reset the Scorecard, or
2) Return to select a new Target Segment
or
4)
Implementation
Implementation&&Measurement
Measurement 3) Decide NOT to continue with the
Collaborative CRM project or
4) Revise scorecard and accept the costs
associated with continuing
WORKSHOP – Strategy Selection – 04a
 The purpose of this Workshop is to select and describe a Collaborative

CRM Strategy that will best address the Opportunities to improve your
joint business with your Target Shopper Segment
 We will use the same Case Study as in ‘Segmentation & Scorecard’
 The task is to complete the blank Strategy Summary Worksheet

 Use the inputs for Strategy selection..
 Segmentation Selection Grid
 Working Proposal
 Prepare to feed-back to the group WHY you have selected your Strategy
 Hints
 Use terms a child would understand
 Refer to the strategy menu to help select strategy type
WORKSHOP – Strategy Selection – Finalise
1. Segmentation 3. Scorecard
2. Working Proposal
Strategy Worksheet
Introduction
Introductionto
toCollaborative
CollaborativeCRM
CRM
Objectives
Partner
PartnerAlignment
Alignment&&
Project
 To understand how to identify the
ProjectObjectives
Objectives Strategies and Tactical options for meeting
Segmentation
Scorecard
At the end of this section you will:
Strategy
Strategy&&Tactics
TacticsDevelopment
Implementation
Measurement
Project
ProjectScoping
Scoping&&Next
NextSteps
Steps
Discussion
 What are the CCRM tactics you have implemented?
 How did they work?
• What went well?

• What did not go well?
 What were your key learning's?
Many of our challenges are in the tactical area
 What are the Practical Industry Challenges we face?
NPD = New Product Development
Media
Fragmentation/
Deflation Mass marketing NPD
Increased effectiveness Success
Trade Spend Challenge
Manufacturer Manufacturer Manufacturer

Improving
! Trading
cee LEES
SSS ! D
Diissc
coouun
Increased PPrriic %L
1100 % ntt Relationships
Promotion
Intensity
Space
Retailer Retailer Retailer Retailer Squeeze
!
E SS
S S ! D
Diissc
cee L
L E coouun
Constant PPrriic 1100 %
% ntt
Understanding
Supply
& Meeting
Challenge Shopper
Shopper Needs
Changing Shopping Changing

Patterns Channel/Format
(frequency/loyalty) Emphasis
What are tactics?
‘Detailed plans to achieve objectives

set by strategy’
Or
The things that the shopper will see!
What are the tactical options?
ECR Italy Definition
TACTIC DESCRIPTION
4 Offer to target Consumer of several types of discount as a
DISCOUNT result of a (usually) purchasing behaviour
4 Offer to target Consumer of several types of points of a collection,

POINTS as a result of a (usually) purchasing behaviour
4 Free offer to target Consumer of a product or

SAMPLE a purchase bonus
GIFT 4 Offer to target Consumer of a gift
SERVICES 4 Offer to target Consumer of a service
COMMUNICATION/ 4 Offer to target Consumer of information that is relevant for

INFORMATION him/her
4 Presentation to target Consumer of the existence of a social

“CHARITY” initiative and of the opportunity to contribute/participate in it
What are the tactical options?
Wider Definition
Range Visibility
Supply Chain What Can We Promotion

Do In
Collaborative
CRM?
NPD Communication Price

NPD = New Product Development
 What might these wider tactics look like in a Collaborative CRM

process?
Tactic Development Process
Example 1
Coca Cola / Monoprix – France

Conversion Strategy targeting segment ‘Young Urban Adults’
Category/ product: Soft drinks / Coca Cola Light
3. New ‘take home’ SKU

1. Direct Mail offering 2. Occasion based
focused on
Free Home Delivery Point Of Sale
Target shopper
Example 2
Conad / Barilla – Italy

3 Strategies - Frequency, Transaction & Retention
Target Shoppers – Family focus, varying by strategy
Category/ product: Bread Substitutes / Barilla
1. Targeted Magazine Communication

2. Weight of purchase based Coupon Incentives
3. In-store communication aligned to TV
The Tactic Development Process
Overview
Strategy
1. 2.
3.
Identify the Develop
Validate
shopper Provisional
The
behaviour Tactical Plan
Tactics
change
required
Tactics
1.
Identify the
shopper
behaviour
change
Tactic Development Process required
Step 1
Conad / Barilla – Italy

3 Strategies - Frequency, Transaction & Retention
Target Shoppers – Family focus, varying by strategy
Category/ product: Bread Substitutes / Barilla
The summary of behaviour change was to increase

frequency of purchase, ( to build the transaction with
Conad and therefore improve shopper retention)
2.
Develop

Provisional
Tactical Plan
Step 2
 What tactics will deliver the Strategies we have developed, taking
note of the shopper behaviour change?
Tactic Headings
•Range
•Visibility/ Shelf
•Price
•Promotion
•CRM Mechanics
Tactics Development Table
2.
Develop

Provisional
Tactical Plan
Step 2
 What are the Collaborative CRM Mechanics? (ECR Italy)
WHERE COLLABORATIVE CRM MEDIA WHEN
At home •Mailing Away from purchasing
Tactic Headings •Mailing with Magazine decision
•Range
At home / Others •Internet Site Away from purchasing
•Visibility/ Shelf •E-mail decision
•SMS
•Price •Call centre
•Promotion
In the Store •Self Scanning During Store visit
•CRM Mechanics •At the till End of Store visit
•Electronic Kiosks Before/during/after
Store visit
3.
Validate
The

Tactics
Step 3
 Tactic Description  Cost – Benefit of Tactic
 A mailing of a €1 coupon off a purchase of  Cost

€5 of Barilla Pasta products
• Coupons Issued – 100,000

 Coupon Redemption Costs - €30,000
• Estimated Redemption – 30%  Fixed costs - €20,000
 = 30,000  Total Costs - €50,000
• In this case costs split 50:50 between

retailer and supplier
 Benefits
How do we  Supplier
evaluate the cost • Sales uplift - €250,000
• Profit Uplift - €75,000
– benefit?
Short or long  Retailer
• Sales Uplift - €150,000
term? • Profit Uplift – €65,000
3.
Validate
The

Tactics
Step 3
 The Budget planner can be

used to develop a view on
the cost – benefits of the
tactics
WORKSHOP – Tactic Development – 04b
 The purpose of this workshop is to develop your Tactical Plan
 Use the strategy developed in the previous workshop
 Use the Tactics Development process to develop your own tactical

plan for Luxury Desserts in Superior Foods
 Write your tactics on the Tactic Development Worksheet

 Explain the rationale for your choices
 What criteria would you use for validation
 Hint
 Focus on no more than 1-2 tactics
WORKSHOP – Tactic Development Worksheet
 Purpose & Outcomes
Introduction
Introductionto
toCollaborative
CollaborativeCRM
CRM
The objective of this section was:

Partner
PartnerAlignment
Alignment&&
Project
 To understand how to identify the
ProjectObjectives
Objectives Strategies and Tactical options for meeting
Segmentation
Scorecard
At the end of this section you are able to:
Strategy
Strategy&&Tactics
TacticsDevelopment
Implementation
Measurement
Project
ProjectScoping
Scoping&&Next
NextSteps
Steps
Collaborative CRM Costs v Benefits
 Where do they occur and what are the implications?
Partner Alignment &

Partner Alignment &
Project Objectives
Project Objectives
Segmentation & Scorecard

Segmentation & Scorecard
Strategy & Tactics

Strategy & Tactics
Development
Development ~0%
Implementation &
Implementation &
Measurement
Measurement
€ Costs € Benefits
 Costs build throughout the process but there is no real

business benefit until the end of the process!
 Check to ensure plans deliver against scorecard

objectives at every stage
 use the budget planner to estimate costs v benefits
Budget Planner
Collaborative CRM
 The Million Euro Shopper Question!
Ultimately, will our Collaborative CRM plans result in a positive,

loyalty building experience for the Shopper?
 Positive, loyalty  Positive, loyalty

building building
experience from a experience from a
brand perspective? retailer
perspective?

CRM Strategy and Tactics Development

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Collaborative CRM Workshop

04 Strategy and Tactics Development

 Collaborative Segmentation – How is it done

 How do you plan effectively together to ensure the best implementation

 Which ‘real world’ initiatives will be progressed

“An elaborate and systematic

“Strategies are the BIG IDEAS that

•Strategies are a framework within which you can make consistent

Buy a different product?

Try something new? Get excited about shopping?

Become more loyal? Buy more profitable goods?

 By developing strategies that create Long Term Relationships

 Remember – – it is called Collaborative Consumer Relationship

4. Synthesis (Creativity and judgement)

X  Which segment we are focussing on &

 What challenges are there to build on?

Analysis/  What will the top level communication &

 Think about the real needs of your target segment

Having developed a strategy – Re-check against Scorecard

 The purpose of this Workshop is to select and describe a Collaborative

 We will use the same Case Study as in ‘Segmentation & Scorecard’

 The task is to complete the blank Strategy Summary Worksheet

 What are the CCRM tactics you have implemented?

 How did they work?

• What went well?

 What were your key learning's?

Manufacturer Manufacturer Manufacturer

Changing Shopping Changing

‘Detailed plans to achieve objectives

The things that the shopper will see!

4 Offer to target Consumer of several types of points of a collection,

4 Free offer to target Consumer of a product or

GIFT 4 Offer to target Consumer of a gift

SERVICES 4 Offer to target Consumer of a service

COMMUNICATION/ 4 Offer to target Consumer of information that is relevant for

4 Presentation to target Consumer of the existence of a social

Supply Chain What Can We Promotion

NPD Communication Price

 What might these wider tactics look like in a Collaborative CRM

Coca Cola / Monoprix – France

3. New ‘take home’ SKU

Conad / Barilla – Italy

1. Targeted Magazine Communication

Tactic Development Process required

Conad / Barilla – Italy

The summary of behaviour change was to increase

Tactic Development Process

Tactics Development Table

Tactic Development Process

WHERE COLLABORATIVE CRM MEDIA WHEN

At home •Mailing Away from purchasing

Tactic Headings •Mailing with Magazine decision

Tactic Development Process

 Tactic Description  Cost – Benefit of Tactic

 A mailing of a €1 coupon off a purchase of  Cost

• Coupons Issued – 100,000

• In this case costs split 50:50 between

Tactic Development Process

 The Budget planner can be

 The purpose of this workshop is to develop your Tactical Plan

 Use the strategy developed in the previous workshop

 Use the Tactics Development process to develop your own tactical

 Write your tactics on the Tactic Development Worksheet

The objective of this section was: