Merial, which provides a range of products to enhance the health, well-being and performance of a wide range of animals, encountered a dilemma: It faced brutal competition across all aspects of its business, especially with its flagship brand Frontline coming off patent and new brands entering the market.
When new parent company Sanofi challenged the Vaccines and Therapeutics marketing team to find an incremental 10% in revenue for 2013, Merial took a different approach than the market typically sees, which is typically price-cutting and promotion.
During their session at the 7th Annual Loyalty Expo, presented by Loyalty360 – The Loyalty Marketer’s Association, Vangie Williams, Director, U.S. Pet Vaccines & Therapeutics, Merial, and Phil Rubin, CEO, rDialogue discussed how Merial overcame this dilemma, moving from a product-centric approach to a customer-centric approach.
Instead of price-cutting and promotion, Merial sought to establish a new platform for customer engagement and move from product-centric programs to customer-centric loyalty marketing. Using an integrated series of steps including analytics, research and technology, Merial and rDialogue (which have a 10-year relationship) partnered to re-establish Merial’s loyalty strategy so that it not only drove revenue, but also acted as a mechanism for share growth and brand evolution.
“Our flagship brand (FRONTLINE) was in decline due to stronger competitors and generic offerings,” Williams explained. “We focused on the customers and not just the products anymore.”
Rubin said it took a “perfect storm opportunity” for Merial to begin the shift from product-centric to customer centric and segmentation for right opportunities around the right customers.
Of its 800 U.S. stores, Williams said, 711 grew volume. Paying attention to customers and acting accordingly leads to customer-centricity as a business strategy that is data driven and relationship-oriented.
Williams and Rubin offered some other keys for Merial’s customer-centric shift:
Establish a platform for CRM: Across brand touch points and channels; across platforms, owned and third party; across communications channels
Recognize and differentiate the customer
Experience based on appropriate criteria: Grow the breadth and depth of consumer insights; make sales, marketing, service and promotional efforts smarter via segment-driven delivery
Merial’s challenge included the following:
Dollar unit volume eroding due to competition–newer products, aggressive pricing
The Challenge:
To compete on dimensions other than price and mass (trade) promotion/discounting
Manage customers rather than products
Differentiate customers not just products
Measure share of customer not share of market
Rubin said that many marketers forget the most basic elements, including:
Product
Price
Place
Time
Right product
Right price
Value
Right time right place
Channel
Message
Rewards
Right rewards and offers
Rubin said a new way to understand a business is by viewing customer relationships
“How can we gain traction on sales and relationships?” he said. “Through campaigns, impact sales, marketing, and customer care.”
Segmentation wasn’t new for Merial, but was “top down” and based on total sales, Rubin said. A legacy sales approach was used based on what was sold in the past, what was sold and not what was needed.
Rubin said that a customer-focused solution revealed priorities and some very specific opportunities.
“Our segmentation positioned Merial to gain greater efficiencies in sales force, drive improved product penetration and share of spend by recognizing client needs,” Rubin said.
What’s more, it improved marketing and program efficiencies by leveraging potential growth or engagement. Segmentation, Rubin said, is only valuable if it’s actionable, embraced, and integrated. Segmentation allows a company to recognize customers and treat them accordingly.
After segmentation, Rubin said, a new loyalty strategy focused on enhanced features to move beyond transactional.
“We transitioned programs from transactional-based to customer-based,” he said. “Programs were integrated with other business activities, marketing products, and programs. We added a tier structure to reward higher spends and re-aligned rebates to ensure programs are profitable for Merial.”
Rubin said programs alone do little without relationship marketing, sales coordination, and closing the loop. For Merial, incremental steps proved to be the best path, prioritizing behaviors that impacted its bottom line. Integration means multiple programs need to connect.
Williams said customer expectations used to be managed on a quarterly basis, something that has since changed to month-to-month. Key KPIs for Merial include sales revenue and share of wallet.
“Once you know your customers, you can sell them anything,” Williams said.