Nestlé Builds Relationships Early in Latin America

To Nestlé, the world's largest food and beverage company, the key to tapping into the Latin American and Caribbean region is creating relationships with people.

The consumer packaged goods (CPG) market in the Latin American and Caribbean region (LAC) closely resembles the fast-moving consumer goods (FMCG) landscape in Europe and the brand maps of North America. After all, many of the LAC brand titans are global players.

While the LAC market has unique challenges and differences, the widespread interests in relationship and loyalty marketing parallel the developments witnessed in other global markets.

Denise d'Abadie, CRM manager for Nestlé in the Caribbean region, feels that while CPG loyalty practices are more advanced in Europe and the United States, the gap is closing. Nestlé's goal throughout LAC and the world is to reach out to individual consumers, and, as many other consumer packaged goods firms do, the company uses a platform approach centering on mothers, children, health, wellness and diet.

With its Very Best Baby program, Nestlé starts cultivating a relationship with expectant mothers well in advance of their need to buy baby formula.

Talking to Mom
To draw customers, Nestlé created a robust set of interactive tools customized to a mother's due date. Expectant mothers register online to access advice and information about pregnancy, including first-trimester advice and weight-tracking charts to help maintain health. Launched in the 1990s as primarily a direct-mail program, Very Best Baby today leverages the lower cost of e-communications by providing mothers with relevant, engaging emails every two weeks with advice and tools geared to their gestation stages.

Nestlé also uses direct mail at strategic points to further deepen the bond with the customer. The "keepsake book" mailing is a spiral-bound calendar and workbook for pregnant mothers to document such life-altering events as their first sonogram. Later mailings closer to the baby's birth date include coupons for Good Start baby formula and instructions for receiving a free leather diaper bag.

"The consumer gets knowledge," d'Abadie says, and "the information they receive in a well-constructed relationship marketing program is rich, timely, relevant, and delivered in their language." It also facilitates feedback, so Nestlé can tailor future exchanges to individual needs.

In return, the brand gets information. The culture at Nestlé strongly supports the notion that successful loyalty programs are the ones that know their customers best, and can act on that information to turn engaged consumers into brand advocates.

In discussing measurement issues, d'Abadie is candid. In the beginning, brands relied on awareness and perception measures gathered in surveys. Though it took time, metrics associated with the program's communication objectives started to move up. Surveys confirmed that consumers were paying attention and getting the platform's message.

Measurement
Today, rigorous measurement is the norm, and the CRM team focuses on understanding how the program impacts incremental behavior compared to the other advertising and promotional campaigns in the market. Nestlé can carefully extrapolate pilot results and project them to larger markets to determine the business case for any rollout decision.

Not only do "surveys reveal that the consumer is connected to the brand and the platform," says d'Abadie, "but Nestlé can confidently say that their relationship marketing efforts lead directly to an increase in sales." Here's one example: After six months, a recent test in Colombia using a retail partner's frequent-shopper database indicated that brand volume among established customers increased, with additional volume from brand switchers.

But d'Abadie warns all CPG brand managers against expecting quick results. "This is a long-term proposition," she says, "and in our case we had to build the capability to do relationship marketing from scratch." These challenges led "to a difficult sell initially, as we couldn't provide tangible results during the early years of investment." She recommends using a formal business case process and net present value metrics to show the true ROI during the lengthy payback period.