There’s no denying that the balance of power in the consumer industry has tilted. Retailers have the advantage over consumer-packaged-goods (CPG) manufacturers—and retail buyers are deftly using their leverage at the negotiating table. Retail buyers are more sophisticated, more analytical, and more demanding than ever. Consider this: each of the top ten US retailers employs dozens of big data professionals who provide buyers with valuable insights. The same retailers have also hired more than 70 executives from European retail companies, known for having more aggressive negotiation styles than their American counterparts. In this increasingly adversarial environment, what’s a CPG key-account manager to do?
These changes in the retailer-manufacturer dynamic are the result of
three trends that have been playing out in the US consumer industry: the
steady rise of newer retail channels including hard discount and
e-commerce, stagnant growth among the largest CPG brands, and burgeoning
capabilities in big data and advanced analytics. The trends have been
evident for a few years, yet in our experience the majority of CPG sales
leaders are still largely doing things the way they always have. They
continue to use the same key-account management (KAM) model and they
haven’t enhanced key-account managers’ skill sets to keep up with the
increasingly competitive business environment.
The future success of CPG sales teams rests on how aggressively sales
leaders move to overhaul their KAM model and upgrade their sales
capabilities. In this article, we discuss the most important changes
that CPG companies will need to make. Companies that have implemented
these changes have driven incremental growth of up to 3 percent above
the category, while also reducing sales expenses.
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