Accelerating consumer goods sales with an insights-driven approach

The future of the consumer goods industry is insight-driven integration, using data from both retailers and consumers to optimize sales. However, with much of the useful data held in silos or by external parties, realizing the full potential of analytics for commercial purposes is challenging. For those that overcome these challenges, ROI is significant. A data-driven approach accelerates the sales metabolism of organizations. According to research by BCG and Google, advanced analytics and artificial intelligence (AI) can increase sales for consumer goods companies by more than 10%.[1] For decades, these organizations have relied on long-term brand building, mass marketing, and long-term innovation cycles to boost sales. But data offers agility, personalization, and impact. It empowers smarter decisions that lead to sector-disrupting development and commercial success. But first, there are major business challenges that must be approached differently.

Consumer goods enterprises face unprecedented challenges. Change is happening at a faster rate than ever before. In response, organizations need to reset their processes for greater speed and agility. This is the only way to realize full commercial potential into the future.

Retailers' demands are growing. They place orders more often and in smaller quantities. Between 2013 and 2018, demand volatility increased by 17% to 45%.^[2] For manufacturers, this means accurate forecasting, right-time right-place inventory, and quick time-to-market innovations are vital.

Consumers' demands are growing. They're looking for personalized shopping experiences, and if they find them, are 110% more likely to add items to their baskets and 40% more likely to spend more than planned.^[3]

Supply chain innovation is harder but more necessary than ever before. Many consumer goods organizations are working to innovate their supply chains but aren't seeing significant ROI. In fact, almost half of digital pilots have little or no impact, and 34% have had only incremental impact according to a survey by BCG. Participants cited inadequate change management, functional silos, and a lack of technical abilities as the main factors leading to failure.^[4]

Internal silos eat time. Currently, functions such as sales forecasting, business planning, sales and operations, and promotional planning have data-driven analytics in place. However, mechanisms are often disconnected. This means that 75% of key account managers' time is focused on past performance versus just 25% on growth or closing gaps. Meanwhile, they spend 65% of their time on internal interactions, losing valuable hours they could spend focusing on customers.

Forecasting is increasingly complex. "Generating account-level forecasts down to the case and making changes to a customer forecast very late in the cycle add complexity," says Thomas McGuire, analytics lead in Genpact's sales and commercial business. "A managing director for a global CPG major recently shared that their organization has become 'very good at being precisely wrong.'"

Genpact's framework for accelerating the metabolism of sales and commercial activity relies on three metrics:

• Sales recognition velocity
• Sales dilution percentage
• Innovation velocity

Applying advanced analytics to data and harnessing insights to address each of these measures will catalyze holistic ecosystem change.

Sales velocity is all about how quickly an enterprise makes money from its sales pipeline. Sales recognition velocity extends this metric by capturing the opportunity, deal size, and win rate. It measures the time taken to recognize revenue, rather than the time to sale. Sales recognition velocity plays a huge role in a business' ability to thrive and grow.

"Organizing for speed has become a critical component of the operating model in the face of new consumer markets, technologies, and consumer trends that are transforming the marketplace," says McGuire. "Moving forward, the business of operating cannot purely focus on running the business efficiently. In addition to reducing costs, this new operating model enables growth and puts the user and customer experience first."

When an organization starts measuring sales recognition velocity, it has the data and insights necessary to optimize the sales process from start to finish.

A large bottling company facing strong headwinds from the COVID-19 pandemic, combined with changes in buyer behavior, needed to change tack quickly. This required an overhaul in how its 13,500-strong commercial team went to market, as well as rethinking how billions of trade dollars could be invested more effectively.

Through insight-driven transformation, the bottler improved process orchestration and customer segmentation to accelerate sales. Meanwhile, more focus on customer experience and risk and complexity analysis allowed employees to sell smarter.

The revenue recognition journey was also simplified. Each stage from opportunity identification to contract creation, event execution, promotion, reconciliation, and collection is now connected.

This combination of digital and analytic solutions, alongside a new target operating model, led to a significant increase in revenue.

Organizations currently struggle to get a holistic view of their entire ecosystem due to a siloed operating model. The result? Diluted sales and commercial performance.

"Our experience shows that a well-integrated ecosystem is critical to achieve a company's end-to-end financial ambitions, unprecedented levels of customer experience, and an innovation pipeline," says McGuire.

A new ecosystem, created by integrating price and promotion flows, establishes and controls two levers. Firstly, optimization of these core activities. Secondly, improved compliance with a unified focus on performance. One activity informs the other. This prevents unnecessary or unauthorized watering down of gross sales.

A global beverage manufacturer needed to become more agile in the face of new challenges and changing demand. By looking at the entire ecosystem to improve sales and commercial flow, the company connected the dots across functions.

Better links between sales, revenue growth management, commercial, pricing, finance, and supply chain were created through insight analysis. It identified fixes to trade pricing that enhance the non-trade claims validation process and fixed upstream supply chain and retailer receiving issues. Finally, core activities and systems were integrated to create a single, transparent book of record.

These orchestration- and analytics-based solutions created a streamlined operating model. The result? More than $100 million in business value.

We all know that successful innovation begins when products are in the hands of consumers. The consumer goods organizations that are speeding up their innovation lifecycle are those that are tapping into advances in applications that optimize and streamline handoffs, use execution analytics to model process service levels, establish guardrails, and maintain overall governance. With this support, companies can focus on innovation and circumvent organizational inertia around resources and routines.

A global CPG company kept missing innovation opportunities. By leveraging applications and analytics to orchestrate the process, the company freed up employees to focus more time and energy on innovation excellence as a core responsibility. Through orchestration and insights, new ways of working flourished and successful ideas were pinpointed and realized at speed. The result? Innovation that previously took 18–24 months is now delivered to consumers in just 12 months.

Starting on the journey to increased sales velocity recognition, reduced sales dilution, and innovation excellence means organizing for speed and orchestrating insights across the entire ecosystem. This leads to an organization with a faster metabolism, lower operating costs, and boosted productivity and profits. Consumer goods companies can get the ball rolling by:

• Freeing up the sales workforce to focus on customer interactions. Reallocate and centralize operational activities. Segment customers based on experience, risk, and complexity criteria. And use insights to prescribe activities and actions
• Orchestrating insights and actions with a single dashboard of insights across the entire data ecosystem
• Creating a learning organization that continually informs pricing and promotion strategy with downstream insights on realization and reconciliation
• Boost innovation excellence with a funnel that measures the ratio of implemented to submitted ideas to improve focus and speed time to market.

With ever-changing customer demand driving the need for innovation, consumer goods companies face many challenges. However, new operating models combined with advanced analytics offer a huge opportunity to gather predictive insights that, when used in the right way, have the power to positively disrupt, drive sales, and significantly boost revenue. Now is the time to harness insights to optimize operations and accelerate commercial metabolism.