Category Management Training: Increase ROI on Your Data Investment

by Sue Nicholls, Category Management Knowledge Group

 

Many organizations spend many millions of dollars on providing data and data access to their organization.  The purchase results in a data-rich organization.  The problem is that, for many organizations, they are not getting the expected return on investment, with low data usage across the organization.  This is because data is just data – it doesn’t build capability on its own.  This blog posting will talk about the 4 requirements to maximize your data investment, for both retailers and suppliers, by increasing capability in your organization through category management training

REQUIREMENT #1:  RIGHT DATA (it’s just data)

Category Management Data

Your first requirement is, obviously, data – but the right data.  This can include a combination of retail point of sale data, syndicated data (including market data and key account data), panel data, transactional and loyalty card data, retail audit data, etc.  For anyone who has owned a data budget before, you know this isn’t as easy of a task as it may seem.  Balancing between which products, geographies, time periods, measures and data sources can be overwhelming.  This is usually all with an increase in data costs and requirements, and a flat or declining data budget.

REQUIREMENT #2:  RIGHT ACCESS (creates information)

Category Management DataOnce you’ve determined the data that you can get from your budget, you need to determine how to make it accessible to your organization .  In the “old days” (when I first got into category management), much of the data was only made available to a select few.  I go back far enough that access was, yes, through hardcopy reports (no, I wasn’t born in the dinosaur age).  Access to the data was typically available to the category management team, and a few select others who saw the potential of some of the data.  The requirement in today’s environment is that the data needs to be easily accessible to many different functions in the organization, including category management, sales teams and marketing.  Some organizations have several different tools to access different data sources, while others have invested in a single solution to view multiple data sources.

In many cases, data access comes at an additional cost to the organization.  It usually includes technical training on the “point and clicks” required within the data mining tool to properly pull the data.  Once an organization has effective access to the data, they are now providing information to their organization through reports and data pulls.

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The assumption in many organizations is that once they arm their functional teams with data and access to the data (the first two requirements above), everyone’s going to start using it.  Unfortunately, it’s not quite that easy.  Only a small percentage of people actually love data (I know, it’s hard to believe!).  These individuals will teach themselves how to use the data and how to apply it in their roles. The right access will only benefit these few people.

REQUIREMENT #3:  RIGHT TRAINING (builds knowledge)

righttrainingWithout comprehensive category management training, most individuals will have difficulty in translating the information into knowledge, and turning insights into action.  As an example, we see many suppliers who believe that the Category Management team should be completing all of the analysis, with sales focusing on selling, and marketing focusing on marketing.  Unfortunately, these organizations don’t see that teaching their sales and marketing teams the foundations of category management gives them the basis for a more strategic, aligned approach.  There are other organizations who have a tremendous gap in capabilities, because of their diverse backgrounds.  There is a level of assumption that all of the team members have an aligned approach to category management and data analysis (which is why the Category Management Association created industry standards).  By providing the right training to the organization (based on roles and expectations), there is an opportunity to create synergies across functions to drive a more strategic approach.  An aligned approach within the organization also provides the foundations for collaboration with retailer and vendor partners.

The training needs to include change at the senior management level, with management not only supporting the training, but understanding and leading the approach.  We have created hundreds of custom training programs for our clients, and those who have the support and leadership of senior management experience the biggest organizational transformation.

REQUIREMENT #4:  RIGHT ANALYSIS (builds wisdom)

Category Management AnalysisIf you’ve done the first 3 requirements right, the fourth one comes almost naturally.  Once your organization has access to the right data, and receives the right training, it moves the whole organization forward in a more strategic direction.  Some of the basic analytic work once held by the category management team becomes a core capability in other functions, so that the category management team can focus on more breakthrough work.  This more strategic approach ultimately results in increased return on investment for the data dollars spent.

We have created an infographic below that includes some of the thoughts above and also includes our data hierarchy of needs.  It gives a great visual representation of what I’ve covered above.

Category Management Data Roi

 

Click here to download the infographic.

Have a great day!

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