We are interviewed on this subject on a regular basis. The interviewers are usually podcasters, radio show hosts, or magazine writers. They are interested in practical and doable advice from a successful CPG producer. They want to know what customer service is for a CPG product and how you can consistently deliver a great customer experience.
After all, it’s not like you are there in the marketplace, able to greet your customers face to face. On the contrary, with CPGs, your product is there, presented by a third party in a retail store. You are dependent on several layers in the distribution system who all must behave properly in order to deliver that exceptional customer experience.
Depending on how those in the distribution system perform, your customer will experience a range of customer service from poor, to average, to exceptional, to great. It depends on how you design your package and the support you provide each layer of distribution.
Here are the questions we usually get, and our answers:
Interviewer: What does poor customer service mean to you?
M&B: The worst customer service we have seen in the retail market place happens when your customer, who buys your brand on a regular basis, can’t find it and has to buy someone else’s! You lose the sale. You may permanently lose the customer. The customer now thinks your product is “undependable.” Now they are less likely to look for it again, even if it is back on the shelf next time they shop.
Out of stock is clearly the worst, most common, and most disappointing customer experience, but it is the one least discussed by marketing people. And most producers just take it for granted that their product will always be on the shelf. This was the biggest challenge we faced building the Barefoot Wine brand.
Sure, your product has to consistently deliver the quality your customer expects. Sure, you have to have an 800-number with helpful and friendly staff. And sure, your quality control has to be top notch. But if your product is not there when customers want it, all that effort goes unrewarded.
Many producers will object at this point and say, “But isn’t that the distributor’s or the retailer’s responsibility?” We have found that to ensure that this doesn’t happen to our brand, we or our people had to inspect the stores on a regular basis and be prepared to do the distributer’s and the retailer’s job!
Interviewer: What does average customer service mean to you?
M&B: Average customer service in a retail environment means that our product is in stock most of the time. It means that our customer can find our product where they expect it to be. The price and quality are what they have come to expect.
It means that we have done the basics to get it there on a regular basis. We have provided the distributor and the retailer with advertising materials and have provided some basic price programming where our product goes on sale on a regular basis.
But with average customer service, the focus is still on the end-user customer as the main buyer and not on the distributor nor the retailer. Average is doing the minimum.
Interviewer: What does exceptional customer service mean to you?
M&B: Providing the customer with an exceptional experience means doing the work at every level of the distribution chain, often in spite of the players. It means our products are never out of stock! We know, sounds simple, right? But it was the biggest challenge we faced. In fact, we didn’t even budget for it. It was a whole new cost category for us, the “Cost of Sales.”
Now we are talking about doing the distributor’s and the retailer’s jobs for them. This includes, but is not limited to, making the sale at retail for the distributor, policing the shelf on a regular basis – no matter where the store is located. That means making sure that the marketing materials are up, that the product is out of the back room, priced properly, and on the shelf; making sure that the codes are correct for reorder, and even placing the reorder before there is a run out, taking into consideration the delivery time. And that’s just for starters!
Exceptional customer service means going the extra mile to assure the customer’s expectations are met. It means knowing that the customer will blame the product and its brand for any glitches in distribution. It means being proactive in every market and preventing those glitches before they happen.
Interviewer: What does great customer service mean to you?
M&B: Great customer service in the CPG retail space requires constant vigilance, proactive support for all the players, and superior packaging.
Constant vigilance means that we have representatives in every market who regularly check up on our distributors and retailers. They guarantee that our product is always presented in the best circumstances and that our customer is never disappointed.
But they go beyond that. They actually make the sales and call in the reorders. They police the inventory of the retailers and the distributors and get the reorders before our product is out on the shelf!
Our representatives make sure all our materials are displayed all the time. They negotiate for and achieve display stacks of our products.
They understand and deliver what our retailers and distributors need to do provide the end users, our ultimate customer, with the best service possible.
Our representatives exchange spoils and quickly handle returns. They do the nitty-gritty physical labor and merchandising when it’s required.
Our design team carefully attended to all the subtle packaging details that ensured our product passed easily through every level of the distribution channel. The cartons are readable from 15 feet away. Our various product types were all color coded. We designed our cartons to allow for colorful displays in the stores.
Our product packages maximized the use of shelf space. Our labels satisfied all the compliance requirements but still had a logo visible from 4 feet away.
We set our pricing to achieve the nearest 99 cents while still providing the retailer and the distributor with their percentages of profit.
Our package jumped off the shelf and said, “Hey, here I am! I’m easy to see, find, and recognize! I’m at a special price, and look, I’ve even got an award for quality!” We exceeded our customer’s expectations at every level. Now, that’s great customer service!
Who We Are
Michael Houlihan and Bonnie Harvey co-authored the New York Times bestselling business book, The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand. The book has been selected as recommended reading in the CEO Library for CEO Forum, the C-Suite Book Club, and numerous university classes on business and entrepreneurship. It chronicles their humble beginnings from the laundry room of a rented Sonoma County farmhouse to the board room of E&J Gallo, who ultimately acquired their brand and engaged them as brand consultants. Barefoot is now the world’s largest wine brand.
Beginning with virtually no money and no wine industry experience, they employed innovative ideas to overcome obstacles, create new markets and forge strategic alliances. They pioneered Worthy Cause Marketing and performance-based compensation. They built an internationally bestselling brand and received their industry’s “Hot Brand” award for several consecutive years.
They offer their Guiding Principles for Success (GPS) & Shelf Smarts courses to help consumer product brand builders achieve success. Their book, The Entrepreneurial Culture: 23 Ways To Engage and Empower Your People, helps corporations maximize the value of their human resources.
Currently they travel the world leading workshops, trainings, & keynoting at business schools, corporations, conferences. They are regular media guests and contributors to international publications and professional journals. They are C-Suite Network Advisors & Contributing Editors. Visit their popular business site at www.thebarefootspirit.com.
To make inquiries for keynote speaking, trainings or consulting, please contact firstname.lastname@example.org.