Brand Experience

Boosting SMCG Brands Through Digital Marketing and Customer Retention

19 September, 2023

budget and achieve a higher return on investment.

In the highly competitive landscape of slow-moving consumer goods (SMCG), digital marketing and customer retention have emerged as significant drivers of success. With consumers becoming more discerning and open to exploring new brands, businesses must adapt their strategies to both retain existing customers and attract new ones. A recent study by Euromonitor revealed that only 29% of millennials stay loyal to brands, highlighting the importance of a comprehensive approach that balances customer acquisition and retention.

Customer retention is a powerful strategy for brands to overcome this challenge. By understanding and catering to the needs and preferences of their existing customers, brands can deliver personalized experiences that foster long-term relationships and strengthen brand loyalty. This strategy not only encourages repeat business but also sparks organic growth through word-of-mouth referrals.

Contrary to popular belief, customer retention is as crucial for SMCG brands as it is for fast-moving consumer goods (FMCG) brands. While SMCG brands traditionally focus more on offline marketing due to the significant 90-95% of sales originating from offline channels, the importance of digital marketing cannot be understated. The remaining sales come from online sources, primarily e-commerce platforms like Amazon and Flipkart, which are rapidly growing.

Even though a large portion of sales happens offline, it’s essential to note that the early stages of the customer journey—awareness, interest, and desire—are primarily shaped by online interactions. At Crompton, we recognize that while a considerable portion of sales still happens through traditional channels, over 70% of research & evaluation takes place online. This realization has led us to fortify our digital presence and create a more robust online footprint.

Our consumer study revealed that 80% of consumers start their purchase journey online, primarily through platforms like Google and Amazon. This shift in consumer behavior has propelled digital marketing to become an essential tool for brands to effectively reach and influence their target audience.

Moreover, digitally influenced buyers, particularly the significant 80% of millennials who thoroughly research products and services before making a purchase, typically spend 2-3 weeks researching before making their final decision. This critical period provides brands with the opportunity to engage with consumers, provide valuable information, address potential concerns, and highlight their unique selling points. By seizing this opportunity, brands can shape consumer perceptions and preferences, influencing purchase decisions and catering to today’s digitally savvy consumers.

By utilizing digital marketing strategies such as targeted ads, content marketing, and social media engagement, brands can create impactful online touchpoints that resonate with their target audience. These touchpoints enhance brand visibility, highlight product value propositions, and evoke an emotional connection that drives consumers towards a purchase decision—even if that decision is ultimately made in an offline setting.

Furthermore, with 84% of in-store and 74% of online buyers initially undecided on their brand choice, it is more crucial than ever for SMCG brands to seize this opportunity to influence and win over these consumers through effective digital marketing. Essentially, digital marketing for SMCG brands forms the foundation of an integrated marketing approach designed to create a seamless and memorable customer journey that spans both online and offline realms.

For example, our key strategy at Crompton involves targeting high-intent audiences while executing high Reach and Frequency (R&F) digital campaigns. We strive to achieve a Share of Voice (SOV) of over 60% on search of our core categories, such as fans, throughout the year. Additionally, we focus on scaling up seasonal categories like air coolers and water heaters during their relevant periods. This approach allows us to effectively target potential customers and maintain a strong presence in the market.

One common misconception is the belief that retention marketing is irrelevant for slow-moving consumer goods brands. This belief stems from the outdated view that brands should primarily focus on customer acquisition rather than customer retention. However, this view overlooks the potential for cross-selling, upselling, and incremental growth that can be achieved through a well-executed retention marketing strategy.

One of the primary benefits of retention marketing for brands is the increased customer lifetime value (CLTV). By nurturing relationships with existing customers and providing them with personalized experiences, brands can extend the duration and frequency of customer interactions, thereby increasing the overall value of each customer. This leads to a more stable and predictable revenue stream that can fuel long-term growth and profitability.

It’s also worth noting that 26% of in-store buyers and 36% of online buyers look for other offerings from the same brand post-purchase. This presents a valuable opportunity for brands to engage with customers and showcase their diverse product offerings. By actively engaging with their customer base and promoting other products, these brands can drive incremental sales, increase CLTV, and reinforce their position as a trusted one-stop solution for their customers’ needs.

Another significant advantage of retention marketing is the enhancement of brand loyalty and advocacy. When customers feel valued and appreciated by a brand, they are more likely to remain loyal and recommend the brand to their friends and family. This organic word-of-mouth marketing can be invaluable for brands, as it not only generates new customers but also strengthens the brand’s reputation and credibility in the market.

Finally, investing in retention marketing can lead to lower marketing costs compared to customer acquisition efforts. It’s worth noting that acquiring a new customer can cost five times more than retaining an existing one. This is because acquiring new customers typically requires a significant investment in advertising and promotions, whereas retention marketing strategies often rely on more cost-effective channels such as email marketing, content marketing, and social media engagement. By prioritizing retention marketing, brands can optimize their marketing budget and achieve a higher return on investment.