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The supply chain is key to customer loyalty

By Rodney Weidemann | 7 October 2019 | Published on ITWeb

 

There is no doubt that most fast moving consumer goods (FMCG) manufacturers are trying to modify consumer behaviours and drive loyalty, though this can be difficult to achieve. This is mostly due to the challenges around validating sales, since you can only reward loyalty if you can verify the purchase.

 

Nonetheless, rewarding customers for their loyalty is a key way for businesses to drive the consumer behaviour they desire, but in order to succeed at this approach, organisations need to address their entire supply chain. After all, having clear visibility and line-of-sight from beginning to end is vital if you are to gather the data needed to help your business to achieve these goals.

 

Of course, suggests Jaco Saunders, Unit Lead at MACmobile, while brand loyalty and recall are both valuable in the consumer space, sales nonetheless remains the primary key performance indicator (KPI) for loyalty, with the ultimate measure of success being a return on investment in sales figures.

 

“A loyalty programme that does not result in additional sales is not really effective. And the fact of the matter is that you cannot create customer loyalty and drive increased customer sales without first having an effective route to market,” he says.

 

“Think about it: although you can implement in-store promotions, prizes, discounts and so on to help develop a level of brand awareness and loyalty, without ongoing effort, this will soon fade from the consumer’s memory. This is why the supply chain angle becomes critical, as the brand is able to look at not simply creating a pull from consumers, but also a push from route to market. The latter can be achieved by simply having your products in the right place, at the right time and in the right condition.”

 

The other thing to remember, he cautions, is that despite brands’ best efforts, brand loyalty within the consumer goods arena remains highly volatile. On many an occasion, continues Saunders, the decision to purchase or not still boils down to price.

 

“Thus, ensuring that your product is correctly priced – at each step along the value chain – is imperative, and using a loyalty programme to ensure your ‘price it right’ strategy could thus be the differentiator that maintains your market share.”

 

“Route to market players such as distributors and retailers are often incentivised based on stock volumes, but it is important to focus on two levels here, notably that of the distributor or retailer business itself, as well as incentives for individual people within those organisations. A good example here is a bar being rewarded with promotional materials and stock, while managers and service staff are offered tangible, personal rewards to promote the product to customers.”

 

“Remember, too,” continues Saunders, “that there are many other ‘soft’ elements that are instrumental in creating loyalty, including the way products are displayed, the correct placement of point of sale material, the condition of the products in store and many others.

 

“In the end, each person in the value chain should be viewed as an integral link, and they can all be rewarded to help drive sales and loyalty, through those sales that can be verified and audited. Such verification is made easy by real-time visibility into the entire supply chain, thereby ensuring that all data is always available and can be leveraged for the insight required.

 

“Without data, manufacturers are effectively blind, with no baseline or point of comparison. With no insight, it is not possible to allocate rewards, drive behaviour or even see if there is a change. Therefore, data lies at the heart of improving the supply chain and rewarding the relevant parties throughout. This in turn will help to drive greater levels of customer loyalty and assist the business to maximise sales,” he concludes.

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