CPG: The Art of Building Consumer Loyalty

By Laura Marsden

3 mins


CPG: The Art of Building Consumer Loyalty

By Laura Marsden

3 mins


With wallets being squeezed, consumer spending has become increasingly erratic and hard to predict as consumers, including myself, hunt for the best deals. For CPG brands this means that now, more than ever, it’s critical to protect and grow consumer loyalty. 

 

 

 

 

So, how do brands capture consumer loyalty in today’s challenging environment?

 

 

Earlier this month, Manifesto released their latest view on loyalty (‘Beyond Points: The Loyalty Blueprint‘) that looks at the changing state of consumer loyalty in retail & beyond, and it can be used as a decision-making framework that sits at the heart of any proposition or business to effectively grow customer loyalty and LTV. As the report is focused on loyalty in retail and leisure, I wanted to spotlight how the framework is also a highly relevant and useful tool for CPG businesses.

 

 

The report examined ‘where to play’ (i.e. which consumer groups to focus on) and ‘how to win’ (i.e. how to balance emotional and functional rewards to encourage ongoing engagement) – and whilst not every example holds true for CPG, these principles remain relevant. Let’s first look at the consumer groups in ‘where to play’ for CPG…

 

  1. Occasional Consumers: the largest segment of shoppers with the brand, who buy infrequently often as the brand’s products are on offer 
  2. Engaged Consumers: these consumers buy relatively often but in small amounts and are promiscuous with the brands they shop with
  3. Crown Jewel Consumers: this group is the smallest segment but the most valuable as they are high spend, high frequency shoppers with the brand

 

 

Next, focusing on ‘how to win’. ‘How to win’ involves a careful balance between ‘delivery’ and ‘delight’. Dissecting what this means for CPG brands, ‘delivery’ is all about getting the basics right – having high quality products, great consumer service and good value – versus ‘delight’, which is about emotionally connecting with consumers through offers such as personalisation, interesting flavours and co-creation. CPG businesses should feel confident on their ‘delivery’ before focusing on ‘delight’, as great delivery will be the bedrock for securing and nurturing consumer loyalty through ‘delight’ offers. These ‘delight’ offers can also be a highly valuable tool to capture consumer data and insights, such as through a benefit that can only be accessed after email sign-up

 

 

From theory to reality

 

Kraft Heinz’s serves as a best in class example of how CPG businesses can put this framework into practice. Over the past couple of years Kraft Heinz has built on their much loved product offering (‘delivery’), with a best in class ‘delight’ offer that spans across all three consumer groups…

 

Occasional Consumers:

 

The brand continues to capture shoppers’ attention with new and creative flavours, such as Mayocue, Truffle Mayonnaise and Mayomust. 

 

Engaged Consumers:

 

During Covid-19, the brand launched Heinz at Home, giving consumers the opportunity to buy direct from the brand, also allowing them to personalise their favourite products. 

 

Crown Jewel:

 

Appealing to their most loyal fans, Heinz have done a number of limited edition collaborations including the release of a Heinz ketchup red paint with Lick and also Absolute Vodka tomato pasta sauce. Most recently they also produced 100 bottles of the sauce ‘Seemingly Ranch x Ketchup’ after Taylor Swift was spotted mixing the two sauces.

 

 

 

 

What are the next steps for you as a CPG business?

 

  • Ensure you have a clear understanding of your different consumer groups, how you differentiate between crown jewel / engaged / occasional and how they differ in terms of their needs and behaviours
  • Identify whether current propositions are currently serving your consumer’s needs, and whether you balance delivery and delight
  • Assess whether internal capabilities are sufficient to expand/deliver a loyalty proposition, and if not whether there is a business case to be made

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