Digital CPG Blog

Oopsies. Rising commodity costs mean CPG companies are facing the difficulty, despite the gradual economic recovery, of passing these along to consumers. “Making matters worse are price wars aimed at protecting market share,” reports the Wall Street Journal.

“Sentiment toward the sector, usually a safe haven because consumers will buy toothpaste and soap even when cash is tight, has soured recently. Over the past 12 months, shares of companies that make nondurable household products have underperformed, rising only about 3% compared with the broader market’s roughly 20% gain.”

Could it be that they are competing with private label? Hmm…

“Basically, all of these companies have to explain what’s going on,” says Jay Freedman, a managing partner at Crystal Rock Capital Management, who plans to attend the conference. “There’s probably more dislocation than there’s been in a long time.”

While the article goes on to talk about the tough decisions these companies will need to make (firing and lay-offs, cutting costs), I believe they should also be pushing their money and strategy into new ways to reach their existing and new markets. CPG desperately needs to figure out the direct to consumer and e-commerce models and fast to have any chance of succeeding. But in an industry that is traditionally slow-moving, it will be interesting to see if investors can put enough pressure on the household companies to show results efficiently.

Most companies haven’t even jumped on the company blogging bandwagon and some pundits are stating that blogging isn’t even necessary anymore. Facebook and Twitter have their advantages, but blogging does too, aruges WOMMA.

The graph shows that companies using blogs for marketing purposes has only steadily increased since 2007.

Blogging is a unique format, and “often acts as the anchor to other social networks’ functions. Blogs offer brands and individuals a method to full express their ideas that is not available through other means.”

“Blogs aren’t going anywhere because they serve a necessary purpose that no other form of online publishing can satisfy,” aruges WOMMA.

We couldn’t agree more. Not to mention every customer digests information in different ways. Some only need 140 characters, but some would like to see a video and others would like to read in-depth about the product or issue. So make sure you’re addressing all your customers in your social media efforts and communication styles.

All that goodwill you’ve built up on your marketing side? Gone in an instant if you have a crappy customer service strategy or team. If you need a refresher on the basics of how to get customer service right, here are some tips:

The customer is always right

Here’s your starting point as a retailer. Retail is a service industry, and part of what customers are paying for is your ability to provide them with a high quality service. Just because their item is low price, in a sale or ordered online, doesn’t mean they don’t deserve to be treated like any other customer.

Of course, retailers know that customers aren’t always right. Sometimes they make mistakes. They can be rude, abrasive, or just plain wrong, but that’s not the point. You have to approach service from the perspective that the customer is correct.

Don’t try to win an argument with a customer. In their mind, you’ve already made a mistake of some sort, so you’re starting from a losing position. Consider the impact of, say, providing a refund, against the possibility of losing all future revenue from that customer.

Make your returns proposition clear up front

Not only is this best practice, there is also a legal requirement (again as part of the DSRs) to ensure that your delivery and returns proposition is clearly explained before the customer makes a purchase.

Make sure your returns policy is up to date, and don’t do an HMV; make sure you know exactly how the policy works in every circumstance.

Respond quickly and positively

Let the customer know you’re looking into the issue, even if you haven’t got an answer straight away. Don’t leave an issue hanging, as the customer will increasingly feel like they are being ignored.

These are great tips, but how do you put it into practice? Let’s say you get a swath of confusion on your Facebook page that all your fans can see. Instead of ignoring them or deleting the comments (never, ever do that), here’s some language you can use: “Sorry ladies! We are working on it and might try again next week. Thanks for your patience and letting us know what was going on.”

See how it follows all the rules above? The most common thing I see when companies respond online is that they don’t match their tone to the company’s personality or the person they are speaking with. It’s okay to show personality and be positive – being stoic and proper really won’t win you any points, even if you do everything else right since it’s so forgettable.