CPG Companies Need to Break Up Not Only Data Siloes, But People Siloes to Have Successful Strategy

Topics: Leadership, Data Integration

You are more than likely aware of the impact that data intelligence siloes have on the CPG industry’s ability to make data-driven decisions. Due to the miscommunication and skewed view of the truth associated with these data siloes, many companies are searching for ways to eliminate them in favor of more accurate, intelligent understanding of their business. This notion of thinking outside the box when it comes to trade promotion data is a result of the frustration and lost opportunity that can be tied to increasing data availability, but the inability to accurately analyze and quantify it in order to create successful trade strategies.

However, data siloes are not the only siloes to be broken down when seeking to implement a successful trade marketing strategy. People siloes are another factor that prevent companies from achieving their strategic goals. Just like the ability of data siloes to negatively impact profitability and growth, people siloes can do the same through clouded cross operating area visibility and misunderstanding.pexels-photo-398532 (1).png

A growing trend among CPG companies is to eliminate the existing communication walls between sales and marketing departments. As seen in Food Navigator USA’s “Chobani’s Peter McGuinness explains the new org chart: ‘To me, having a separate sales department is archaic,’” achieving better strategy goes beyond data and into the realm of people. The article notes CEO of Chobani, Peter McGuinness, stating that “There’s been a convergence of sales and marketing in this industry for some time. But in order to identify opportunities, you have to have visibility across all parts of the demand department.”

However, for most CPG companies, the issue lies in the conflicting beliefs of sales and marketing over which strategy will be most effective in terms of what is best for the company. Too often sales focuses on how to get retailers to run promotions that drive revenue and volume and marketing focuses on implementing tactics that reach a broader audience designed to build brand awareness without retailer support. It is rare that these two operating areas work together to focus on the greater good of maximizing the corporate brand portfolios, market share and profitability.

"For most CPG companies, the issue lies in the conflicting beliefs of sales and marketing
over which strategy will be most effective in terms of what is best for the company."

Neither sales nor marketing in this situation are using data to make decisions or work together to make a comprehensive strategy that drives corporate objectives. Without access to accurate post-event visibility where one could see the ROI of promotion expenditures, the impact of marketing initiatives or predictive planning to optimize future joint initiatives, there is no common data point of interaction.

But giving these departments a common source of intelligence opens the doors for collaboration. Removing the intelligence wall between these departments also provides the opportunity to shift to a combined demand budget where trade and marketing investment comes from a single source. This increases the need for collaboration as it is in the best interest of showing the greatest return from the combined investment. Both a common source of intelligence and budget result in data-driven decision making and prevent reactive tactics to meet individual goals in favor of proactive strategies that achieve organizational objectives. However, all of this is only theory if it is not backed by silo-free data intelligence and corporate leadership.

While breaking down data siloes provides separate departments with one view of the truth, it also provides the opportunity to use this intelligence to align strategy. With this, companies will have the ability to identify opportunities and groups can work as one in achieving critical corporate objectives.

So not only does data need to be broken free from siloes, but so too do people. Without aligning sales and marketing departments, companies will still suffer the consequences that miscommunication between them brews. This in turn throws a wrench in demand planning and overall results. For companies to see growth and attainment of corporate strategy, they will have to unify both data and people providing the opportunity for a true consensus marketing and sales plan.

What to read next: The Logical Step You Need to be Taking in Your Trade Planning 

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