Who's Who in at Walmart

Who’s Who in CUSTOMER TEAMS at Walmart As seen in Customer TEAMS As manufacturers moved closer to their retail customers, a shift in the supplier-retailer relationship resulted By Sharon M. Goldman t was the ultimate “Field of Dreams” sce- ently.’ That became our mantra going forward.” nario: If you build it, they will come. In Soon after, the CPG powerhouse had a custom- I 1987, Procter & Gamble helped negotiate er team in place in Northwest Arkansas, ready the first customer team operation, putting to call on Walmart at a moment’s notice, 24/7. the manufacturer’s boots on the ground in It didn’t take long for other CPGs to catch a customer’s HQ city. It was in Bentonville, on. Muccio, who led the development of the Arkansas – home of Walmart. Walmart team and ultimately served as lead- A P&G study had found the company’s re- er of the P&G-Walmart global relationship lationship with the retailer lacking: Category through 2003, says there are more than 1,000 expansion was disappointing; divisions over- customer teams in Northwest Arkansas today lapped in calling on the client; and trust be- consisting of at least six team members each. tween the two organizations was as low as it And other cities with a major retail headquar- had ever been. “[Walmart founder] Sam Wal- ters have also become accustomed to thou- ton’s comment was, ‘If I want to punish any sands of customer team members living in of my buyers, I put them on P&G’s business,’” the community – collaborating with retail em- recalls former P&G executive Tom Muccio of ployees in the home office, eating with them the challenges the manufacturer faced in its in local restaurants, and joining them for cof- Walmart business. “But then Sam said, ‘If you fee or a drink. There’s Cincinnati for Kroger; thought of my stores as an extension of your Minneapolis for Target; Pleasanton, Califor- company, we would do business entirely differ- nia, for Safeway; Issaquah, Washington, for 2 FEATURE: CUSTOMER TEAMS Costco; and Deerfield, Illinois, for Walgreens. “These are whole communities that are there for the sole purpose of doing business with the retailer,” says Dina Howell, CEO of Saatchi & Saatchi X and previously P&G vice president, global media and brand operations, who worked for seven years on the Walmart team. “Work really runs at the speed of retail, so you don’t have time to figure out how to get a flight in to get work done. You have to be there, in person.” Putting a customer team in place is an ex- pensive and complicated endeavor, especially a large one with a variety of functions includ- ing sales, finance, supply chain and marketing. But it has become the norm for major CPGs. “It’s mandatory for the biggest CPGs,” This Google map shows the locations of a says Howell. “And for agencies like ours, it’s multitude of major CPG customer team offices that are in proximity to Walmart’s Bentonville also a real competitive advantage to be in headquarters. the market directly with our manufacturing partners working alongside retail partners.” depending on the size of the company, the expectations of the retailer and how the team Teams in all Shapes and Sizes evolved within the organization. “It’s all over Industry experts say the one thing you can be the board – you’ll find that every CPG team is sure of is that every customer team is different, structured differently,” says Evan Anthony, a “ Work really runs at the speed of retail, so you don’t have time to figure out how to get a flight in to get work done. You have to be there, in person.” Dina Howell, CEO of Saatchi & Saatchi X 3 FEATURE: CUSTOMER TEAMS Customer Teams From the Ground Up In the mid-1980s, CPGs had the “Most Walmart people didn’t want clout. Most retailers were re- us to be there, but Sam said to gional – none were interna- give us a chance.” tional – and they typically As soon as the P&G viewed CPGs very tactically. Walmart customer team Suppliers influenced buy- was announced, other re- ing, merchandising and tailers were quick to react logistics decisions, but because they felt Walmart they were not considered a had gained a competi- strategic part of the retailer’s tive advantage. “As a result business. of starting those teams, P&G The P&G customer team for quickly went to Walmart competi- Walmart, established in 1987 and led Tom Muccio tors such as Target, Kmart and Costco.” by Tom Muccio, changed all of that and put It took other CPGs some time – 18 months into motion a seismic shift in the retailer- to two years – to get their own teams on supplier relationship. “We realized we had the ground in Bentonville and other retailer been very arrogant,” says Muccio, who’s now HQ cities. “They didn’t understand how retired. “We measured everything by P&G’s customer teams worked,” says Muccio. “”We fiscal year, not the retailer’s. We had our also tried to leverage P&G’s size, scale and own internal measurements. We had seven scope.” or eight different product divisions, and we These days, the customer team landscape didn’t have anything that told what the total has changed, Muccio says. “The dynamics value of a customer was to P&G.” are different. Retailers are the big dogs, not Worst of all, he remembers, was the con- CPGs. Five of P&G’s retailers have higher frontational language. “We referred to them sales than P&G does.” as accounts, they called us vendors. We real- Shopper marketing is a growing opportu- ized that dynamic was ‘them’ against ‘us.’ nity, he adds, but both customer teams and We needed to approach our customers on a retailers have yet to fully push the envelope more strategic basis.” in terms of broader shopper themes such Walmart welcomed the new customer as health and wellness. “There is still money team. At least, Walmart founder Sam Walton being left on the table,” he says. “It will take did. “He believed it showed the commitment a breakthrough in thinking.” of P&G wanting to change,” says Muccio. — Sharon M. Goldman 4 FEATURE: CUSTOMER TEAMS retail shopper marketing consultant and for- growth. They expect us to fully engage along mer Kroger marketing executive who spent the entire path to purchase, and they engage more than 30 years with the retailer. “There and collaborate with us to win with their are different shapes, sizes, levels of support; shoppers.” some have shopper marketing, some don’t.” Every on-site customer team needs a lead- John Mount, vice president of commer- er, and these positions tend to be very senior, cial operations & marketing at The Coca-Cola says Howell. “I can’t think of anyone who is Co., previously co-led one of Coca-Cola’s to- not a vice president. And most often, they tal beverage customer teams in Cincinnati. are from sales or general management. They He says many of Coca-Cola’s teams include need to be capable of running a multifunc- field operations and national account execu- tional team.” tives to call on the largest customers’ divisions The bottom line is that the CPGs need to and regions. In addition, they also typically fit their teams into the framework the retailer include cross-functional subject matter ex- works in, but how each manufacturer deals perts who support revenue management, with those challenges may be different, says category management, finance and shopper Mike McMahon, previously vice president of marketing. integrated marketing at ConAgra Foods and “Our customers expect us to have all of the now head of shopper marketing at Datalogix. key disciplines in place to help them win,” “The way we put things in place at ConAgra Mount says. “They want a holistic value prop- was to push the majority of the decision rights osition that drives topline revenue and profit for spending and program development into “ There’s nothing better than when the entire customer team is rallying around one common vision or objective. Everyone takes a lot of pride in working to become our customer’s most valued supplier.” John Mount, vice president of commercial operations & marketing, The Coca-Cola Co. 5 FEATURE: CUSTOMER TEAMS the hands of the people in the field, but we to work at retailers,” she says. “Others were still made sure we touched base and had extremely skeptical.” people come back [to the Chicago office],” he When McMahon joined ConAgra in 2004, says. “Other companies pushed those rights shopper marketing wasn’t part of most of into the field, but connectivity didn’t always the company’s customer teams, which typi- come back.” cally included folks from sales, operations and In addition, McMahon points out, at category management. But retailers were be- ConAgra the on-site marketing team reported coming more sophisticated and were hiring to the CMO, whereas at other companies that classically trained CPG marketers to head up team might report up through sales. “And their own data-driven efforts. often, a company might not be large enough “That put demands on the manufactur- to deploy so many resources,” he says. “They ing community that the sales guys were not might bring in agencies to help cover a lot of prepared to fulfill,” says McMahon. “There the gaps in coverage at HQ.” was a pressure from the retailer side for us to become less fragmented and smarter about Shopper Marketing Migrates how we won the confidence of our retailers.” When the first customer teams evolved at the Those demands, he explains, turned into a largest retailers in the late 1980s, marketing high-level organizational strategy discus- was not a part of the team’s structure.

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