Juan Paolo Gonzales is the AVP Marketing Operations and Capabilities of Rebisco. He was formerly a Marketing Manager of Colgate-Palmolive and was based in Thailand. He launched Del Monte Fit n Right in the Philippines. He won the Mansmith Young Market Masters Awards in 2008. He teaches Marketing Analytics at the University of Asia and the Pacific. Paolo will share more marketing tips during the Mansmith Brand Summit on July 9, 2019 in Rcbc Theater, Makati.
Q1: What analytics questions should marketers ask to make smarter decisions?
A1: There’s a lot. For this purpose, allow me to identify some which I think are fundamental and yet are often ignored.
The first one is, “What is the size of the prize?” In our aim to move fast, we go straight to implementing an idea without having to know if the opportunity is large enough. And once we see lackluster results, we go back to what happened and we attribute the misses to implementation issues. Again, the problem is not at the end, but it is at the beginning of the process.
The second question is, “what will I earn if I do this?” At times, we act based on a formula. If I have A&P money, I’ll do a TVC. If I don’t have much, I’ll do digital. Then we end up with a TV plan that is a repeat of what we’re used to doing. Or a social media plan based on simply industry norms. Or we create an emotional ‘viral video’ following the success of a QSR company. But how do we know if all of these will result to the achievement of our business objectives?
Q2: How do you determine the analytics maturity of a company? What’s the desired state?
A2: The desired end-state is for companies to make decisions based on facts, and not because it is either what other companies are doing or it is something that we are we used to doing. I see a company that has less, “sa palagay ko, “ano sa tingin mo?,” or “this is how we do it…” Instead the conversation, should be around, “yes, I believe we are headed in the right direction because it is supported by facts.”
Q3: How can marketers design an analytics strategy? What competencies of people are needed in the analytics team?
A3: Marketers can design an analytics strategy by using models. Simply put, models are frameworks that will help make sense of the the metrics or numbers. Example, we can model advertising: “increasing TRPs by xx% will result to an increase in Sales by xx%.” This will help future investment decisions.
A good analytics team should have a curious mind that asks the “why’s, so what and what now?”
Q4: Can you cite specific situations where marketing analytics helped build a brand that you were handling?
A4: That will be when we were developing Del Monte Fit ‘n Right. Before the success of Fit ‘n Right, we were solely in the canned juice business. The segment was small, declining and very competitive. There was little differentiation over the next big player so we ended up in a cycle of promotions and price discounts. Profit margins were challenged and the cost to compete was becoming more expensive. So we embarked on developing an unexpected weight-loss juice drink. We knew we hit something big, but we didn’t know how big. We can’t use our historical sales because it just didn’t make sense. So we turned to using consumer metrics: Target Population, Frequency of Purchase and Volumes per consumption occasion. We also included awareness and distribution metrics as part of the equation. These metrics also aided us in sharpening our media and distribution plans. The result: we came up with an accurate forecast which led to crucial decisions in PET line investments.
Q5: Which companies do you admire most on decision making guided by data analytics and why?
A5: Sari Sari Stores. Without proper training, Sari Sari owners have a good grasp of the P&L, cash flow, inventory and SKUs management. They know how much they earn from a bundle of 12s of toothpaste, a pack of cigarette, and a bag of lollipops. They have a concept of pricing sensitivity – how much volumes I will lose if I increase my price. They manage to make their businesses survive amidst stiff competition. How do they do it? They make things simple and logical. At the end of the day, they always go back to the question — “how much will I earn if I do this?”
Q6: Big data is a big thing now. What’s your take on big data in marketing?
A6: With the advent of digital and data automation, big data is becoming a norm. Organizations that can mine and harness the insights from big data will gain a competitive advantage. Gone are the days when analysis are based on topline understanding. A good example is e-commerce. By understanding correlations between digital behaviours with actual purchase habits, organisations can have better targeting and communication decisions for its brands. That’s the reason why we see a lot of the interesting Lazada ads in our social media accounts.
Q7: Under what circumstance should an executive accept intuition and ignore what analytics are telling them?
A7: Intuition and analytics go hand-in-hand. To illustrate this, imagine that you planned for months to go on a trip to the beach. Unfortunately, days leading to the big trip, the weather forecast said that there’s going to be lots of rain. But the stakes are high and you don’t want to let your beach body go to waste. So you try to understand the forecast. It says that the chances of rain is 50%. So what do you do? Well, take the information and call your friend who’s already there. Your friend tells you that it’s still very sunny and he thinks that it will stay that way.
And so you decide to go ahead with the trip. However, please be prepared with a plan B. Perhaps, bring an umbrella?