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.’

Meat and plant-based sales are both strong at Maple Leaf

Both priority areas performed well in the company's full-year results, helped by a boost in marketing for new products.
Maples Leaf All Natural 4

Maple Leaf Foods reported higher Q4 and full-year 2020 sales, driven by its sustainable meats and plant-based proteins. 

The CPG co. reported quarterly sales of $1.13 billion, up from $1.02 billion for Q4 2019, as well as net earnings of $25.4 million, compared to $17.5 million for the same period the year prior (an increase of 45.2%).

For full fiscal 2020, the company reported a total increase of 9.2% in sales, driven by what it says is “strong growth in both the meat and plant protein groups.”

“We have repositioned our portfolio towards two high-growth categories now representing 20% of our annual sales generating a compounded growth rate in excess of 25% over the last three years,” says Michael McCain, the company’s president and CEO.

Meat protein group sales  comprised of prepared meats, ready-to-cook and ready-to-serve meals, snack kits, value-added fresh pork and poultry products that are sold to retail, foodservice and industrial channels, and agricultural operations  grew 11.3% for the quarter. 

Meanwhile, sales of plant protein products  refrigerated plant protein brands such as Lightlife and Field Roast, premium grain-based protein, and vegan cheese products sold to retail, foodservice and industrial channels  was up 5.5% over the same period. 

Sales growth for its meat portfolio was driven by “a favourable mix-shift towards sustainable meats and branded products,” but also growth in exports to Asian markets, and pricing actions implemented to mitigate inflation and other structural cost increases, according to the company. Strong demand in the retail channel was offset by lower volume in foodservice as a result of COVID-19.

For its plant-based offerings, sales for 2020 were $210.8 million compared to $176.4 million last year, representing a growth of 19.5%, or 18.1% after excluding the impacts of foreign exchange. The segment was driven by expanded distribution of new products, continued volume increases in its existing portfolio, and pricing actions implemented to mitigate inflation and other structural cost increases.

SG&A expenses totalled $144 million for the plant group alone in 2020, with investments focused on advertising, promotion and marketing to build awareness, as well as supporting brand renovation and new product innovation. SG&A for meat proteins were $346.6 million for the full year, and the company says it expects SG&A levels and marketing investment in 2021 to be largely in line with where they were in 2020.

The company, which in 2019 announced it had gone carbon neutral, says it’s amplifying this commitment while “focusing on eliminating waste in any resources it consumes, including food, energy, water, packaging, and time.”