Canadian firms pay ‘lip service’ to CRM’: consultant

Canadian business leaders may understand the importance of customer relationship management (CRM) but they are not delivering on it, says a consultant who wrote a report on the subject. Jerry Garcia, a partner with Andersen Consulting in Toronto, says that only...

Canadian business leaders may understand the importance of customer relationship management (CRM) but they are not delivering on it, says a consultant who wrote a report on the subject.

Jerry Garcia, a partner with Andersen Consulting in Toronto, says that only 15% of Canadian business leaders surveyed last December consider CRM a top priority, placing it last in a ranking of critical management issues.

‘Was I surprised at the result? Yes and no,’ says Garcia. ‘I’ve worked in different industries and countries and I know that lip service is given to CRM. But the extent of the gap between executives and [consumers] was bigger than I thought.’

According to the survey of more than 400 business executives and 250 consumers ‘the gap’ exists in the expectations of both survey groups. On the one hand, only 15% of executives rank CRM a top priority. On the other hand, the overwhelming majority of consumers believe that an integrated ‘customer-centric’ approach should be one of businesses’ top five organizational priorities.

‘Many Canadian executives do not associate CRM with the other goals they have,’ says Garcia. ‘In an expanding market, lowering costs is a primary focus and CRM can help with that by lowering acquisition costs. But executives don’t always make that link in their mind.’

When asked what’s at stake if companies don’t meaningfully embrace CRM, Garcia says, ‘Today’s customer can do business with any company in the world with a click of a mouse. Knowledge of one’s customers, retention strategies, building brand loyalty and maximizing the value of customers must become the focus of Canadian executives.’

Garcia says one of the elements exacerbating the CRM problem among many Canadian businesses is that many of them believe they are customer-driven when, in fact, they are not.

‘They are product-centric, rather than customer-centric,’ he says. ‘And instead of becoming more customer-centric, they focus instead on becoming more market-value-centric. They are concerned with how they will be perceived by analysts and the market. That’s great for the market we have today, but not sustainable for the long-term.’

Garcia does allow that some sectors, notably financial services and retail, are making good strides in addressing CRM needs. But the telecommunications industry has the most unrealized potential in exploiting the technology.

‘Telecoms have lots of customer interaction,’ he notes. ‘Billings, in-bound inquiries, sales. Any industry with lots of customer interaction like that has great potential.’

Kraft Heinz beats the street, but reports slight sales slide

The company's Q2 net sales, while down slightly, reveal continued demand for snacks and pre-packaged meals.
Kraft Heinz

Kraft Heinz is reporting earnings of 78 cents a share, beating Wall Street’s estimate of 72 cents a share, thanks to continued demand for snacks and pre-packaged meals. However, the company also reported a net sales decline of 0.5% compared with the same period last year, to $6.6 billion, according to its latest Q2 earnings report, released Tuesday.

The company experienced a favourable 2.3 percentage point impact from currency and a negative 0.7 percentage point impact from its February divestiture of Hormel Foods – including the Planters peanut brand – which closed in the second quarter of 2021.

Its cheese divestiture – which included the sale of its natural cheese division to Lactalis – is expected to close in the second half of 2021, says Kraft Heinz Global CEO Miguel Patricio in this morning’s conference call.

Adjusted EBITDA slumped 5.2% versus the year-ago period to $1.7 billion and increased 6.6% versus the comparable 2019 period. Higher transportation and inflation-related goods costs continue to affect the company’s bottom line.

Kraft Heinz’ organic net sales declined 3.6% in Canada over the last three months compared with a comparable period last year, this as total net sales rose 8.8% year over year. 

However, its overall organic net sales slipped 2.1% compared with 2020 figures. This includes the negative impact stemming from exiting its McCafé licensing agreement. However, this decline was partly offset, Kraft Heinz reports, by “partial recovery in foodservice channels and retail consumption trends.”

“Food service is recovering, and recovering fast,” Patricio stressed in today’s earnings call. He said “the bet to support QSR” early in the pandemic, with individual packets of ketchups and sauces, is paying off.

Channel trends are still normalizing, he warns, and it’s too early to see how at home or away from home, will net out. “We have big ambitions for away from home business,” he said. Consumers continue to evolve how they eat, with Patricio saying that Kraft Heinz is collaborating with a popular DTC brand for its Philadelphia cream cheese.

Accrued marketing costs, the company reports, rose to $968 million from $946 million in December 2020.

“We are investing more in our brands, and better as well, building a much more creative company,” Patricio reported.

Kraft Heinz is also strengthening and diversifying its media presence, he said, driving repeat rates for those discovering and rediscovering the brand. Patricio added that the company is continuing to drive its transformation program forward, modernizing its brands and better connecting with its consumers.