The consumer packaged goods (CPG) industry is highly saturated with businesses ranging from corporate giants to young startups competing for a share in the market. After breaking into the marketplace and landing your product on retail shelves, it can be challenging to maintain and grow your customer base. The three tips outlined below are examples of how small and medium-sized CPG companies can beat their competitors’ sales in the retail arena.
- Enhance Field Team Performance with Up-to-Date Technology
Field representatives wear many hats; they can act as customer service personnel, brand ambassadors, or supply chain regulators. Because of their numerous responsibilities, field reps should limit the amount of time they spend on administrative tasks and refocus their time on revenue-building activities. Luckily, there is a large selection of technological tools that can improve field team efficiency.
Certain mobile software solutions enable field reps to capture valuable data directly on their mobile devices, share it in real-time with back office management, and store it in the cloud for future reference. Electronic forms are a better choice for businesses than paper forms because they save time and money and reduce the risk of human error. Many types of data can be collected and analyzed to improve merchandising strategies. With a mobile technology in place, businesses can evaluate how products are selling at both individual locations and across multiple stores, how effective promotions are, what current and potential out-of-stock issues are present, and competitors’ activity. An added perk of some software tools is the ability to send high-resolution photos to managers in real-time. This feature provides a more in-depth view of what selling strategies are working for your business, as well as what the competition is doing.
Employing a software solution can also improve your company’s relationships with clients, which can lead to additional facings in retail stores. Consider this: a field rep is out at a client visit and notices that stock of a particular product is low. He or she fills out a purchase order on their mobile device and sends it to the main office where it is instantly received by the rep’s manager. The manager processes the order immediately, thus avoiding an OOS situation and pleasing the client. It is certainly beneficial for your business if reps can perform their daily job functions more productively than your competitors can.
- Utilize Social Media To Interact with Current and Potential Customers
Social media platforms have a variety of applications for businesses, however, CPG companies should consider optimizing their social profiles for promotion and customer service purposes in order to advance ahead of the competition. Social media is a great tool for engaging with customers directly and inexpensively. For example, offering a coupon code to any user who “likes” your company’s Facebook page or retweets a post from your company’s Twitter feed will drive more customers to purchase your product, either in-store or online.
Interacting with consumers online is also an excellent way to generate brand awareness; potential customers may be swayed to choose your product over a competitor’s if there is lots of buzz surrounding it on social media. Confirmation bias and message framing have been proven to have a substantial effect on the shopper decision-making process. Companies have the power to choose what type of content they post on social sites and how they design their messages. By providing your target market with information that confirms what they already believe and then creating stimulating posts, your business will be able to retain its current customers and acquire new ones with similar demographics.
Social media is an increasingly popular customer service mechanism, especially among millennials. In fact, in a study conducted by Heywire Business, 53% of respondents aged 18 to 34 preferred to have their customer service questions answered online instead of over the phone. With its personalized nature and fast response time, social media is an effective means of customer service that businesses should take advantage of in order to adapt to consumers’ preferences.
- Adopt Competitive Pricing Strategies
Any pricing strategy that a business applies should encourage growth and profitability. The various sales channels that a business uses will have an effect on the bottom line since each retailer has its own overhead and distribution costs. Sometimes it may make sense to use different pricing strategies for different venues. Below are some popular pricing tactics for small and medium businesses who are looking to gain traction in the retail marketplace and outsell competitors.
- Channel Pricing: This strategy involves looking at the retail sales data from each individual location tailoring your approach towards the characteristics of that location’s consumers.
- Skimming: This approach involves setting an artificially high price in order to procure high profits instead of quick growth. By setting the price of the product high, it’s possible to capture the sales of early adopters, who tend to be influenced less by price than the average consumer. This is the consumer group who stands outside in line on release day waiting for the doors to open so that they can be the first to buy a new product.
- Penetration Pricing: This method is the opposite of skimming, as the price is set intentionally low in order to sacrifice high profits for a large market share quickly. This strategy becomes successful over time as consumer loyalty builds and prices are raised slowly.
- Value Based Pricing: This strategy works well for businesses with low production costs on their products. Pricing is based on the perceived value of the product to the consumer, whose emotions can drive purchasing. This approach increases profits while maintaining a normal volume of sales.
Dealing with competitors is an inevitable facet of any business in the CPG industry. Being aware of the latest industry trends and accommodating consumers’ needs will put your business in a position to increase its sales. By administering comprehensive technologies, utilizing social media platforms, and establishing competitive pricing, CPG businesses can effectively manage their competition.