The Secret Sauce for Better Strategy in Your Analysis

Integrating strategy into your analytics is one of the main areas most struggle with when doing their analytics — knowing what's relevant and what's not, what's a true insight and what's not. But, if you know the secret sauce to bringing strategy into your analytics, you’ll be able to turn your data and analysis into effective action to grow your business. And so I want to talk about pizza. Yes, you read that right — pizza.

The Crust — Your Strategies and Goals

So when you think about pizza, there's three different elements. The first element is the crust, which represents the strategies and goals associated with what it is that you're trying to accomplish. To start, you really need to be clear about what your company is trying to accomplish; sometimes I ask people what the overall goals and objectives for their organization are and they're not really sure. You need to understand your organizational or overarching strategies or objectives for your company and what you're trying to achieve in terms of overall business results, how you're going to get there, and to focus on areas that need improvement. 

If you call on retail customers, you need to understand their overall goals and objectives as well. You're going to have a very hard time finding compelling insights if you don’t understand what their overall strategies and best practices are and what the retail customer is trying to accomplish.

Know your company’s and your customers' goals. There's different types of KPIs, or key performance indicators, for some companies - most of all their financials usually - but for a true comprehensive analysis and strategy, you want to look at multiple KPIs. 

Examples of Financial KPIs


Looking into the overall corporate scorecard is essential in developing overall strategies for your categories. For instance, what are your shopper KPIs? And for categories for retail clients, or if you're a category manager for a retailer, what are your KPIs? Without looking beyond financial KPIs, you're really going to have a difficult time understanding what's an insider or what's not. Some resources you can access for creating additional KPIs are the annual reports, news articles, asking other people, and talking to your manager. Again, it’s imperative for you to build your business acumen and understand strategically what you're trying to accomplish and how you're going to get there, especially either for your company or for your customers. Because if you're doing analytics at your desk - and no matter how good of an analyst you are - if you don't understand the overarching strategies of what you're trying to accomplish, you're not going to draw the correct insights from it, just point blank.

Once you understand your goals and strategies, now working at your desk on a category assessment, you can start finding some really great insights to suggest to your retail customer, for example.  In a retail customer example, opportunities may be: increased market share in the premium segment, gross sales by a certain percentage, increased shopper loyalty with millennials, or increased dollars spent per buyer. Then, you share these opportunities to your retail category manager, or as a retail category manager, somebody comes in and says let's increase market share in the premium segment because you're less developed than you could or should be, what are you missing now? 

The strategy!

I see this so many times, people come up with interesting insights but they're not sure if they're relevant for the category or for their retail customer; it might even go against what they're trying to accomplish, but they don't realize it because they're not basing the insights on strategic foundations. 

To create strategy, you need a few things. One is well defined category management foundations. With an innate understanding of the category management foundations, you can apply that to your categories and create  a roadmap of where you need to go. This includes retailer and supplier overarching strategies, category definition and segmentation, and also category roles and strategies.

The second part of strategy relates to your insights, which should be derived from the overarching category management foundations. As an example, say I identified that there's rapid growth in a specific segment in a category - let's say it's plant-based proteins in the pasta category. When I do a bit more digging into the details, I might identify that even though the retailer is already highly developed in this segment, there's still some opportunity for them to grab more shares. And when I dig more deeply into that, I see that promotion and some new listings really could help them and I have the numbers to prove it. 

In this chart, you see the category's up 4%. You can also see the different segments and plant-based protein is up 17%.  Even though they're already highly developed in the plant-based protein segment than in some of these other segments, there’s an opportunity for them to even grow further and even grab more share.  

After you have your category plan, the next step is to go deeper. Make sure you include the shopper. (If you use those category management foundations properly, the shopper is already baked into your overall category management foundations.) Have the strategies tied in with your category plan so it's not just tactical things, but so there's actually strategies like in the example above, to make your plan really compelling. 

Now we have a solid crust of pizza. It's baked with goals and strategies for solid foundations that's going to hold your pie together. We’re also going to make sure that you focus on the right ingredients to put on top of it to get your pie right. This is where relevant insights come into play.

The Right Toppings  Relevant Insights

With relevant insights you can go beyond just the numbers and provide the retailer with strategy. Using the same plant-based protein example as above, when looking at their categories, you’ll see certain segments have lower percentages than others and are less developed. However, telling them they should be pulling back on over-developed areas and focusing on the lower-percentage segments to help develop them more would be short-sighted. That is simply looking at the numbers without insight or understanding why. 

For instance, Imagine if one highly-developed segment was actually their private label segment and is obviously very important and highly profitable for them. If you're going in and making recommendations to be pulling back on that, unless you have specific proof to show that this is not beneficial for them, you don't want to be going down that street because private label is a very very important strategic component for retailers. 

By having some targets associated with their categories and applying the strategies behind those different pieces, you really do end up with a much more strategic approach that's not just numbers — erasing the thinking that below 100 is not good and we need to increase development there and, oh, if it's over, we've got to cut back on support or listings. You won’t get very far with the retailer by going off of numbers alone without relevant insight.

So now we have some great toppings to go on the pizza — more focus on the measures that are relevant based on your strategy and your goals. 

Know your key data sources, make sure you understand them, and make sure you're not just using point of sale data or syndicated POS data. You want to have a robust set of data to be looking at and understanding the business. If you don't feel comfortable with measures or if there's something you don't understand, go look into them to try to find the meaning behind them because it's important to understand what your company is trying to accomplish. By understanding strategically set visions for categories and also understanding your retail customers if you do call on customers, you'll be able to turn your data into insights. 

Adding Sauce and Cheese — Creating Scorecards

The last piece is scorecards. Scorecards give you the basis for being able to plan. We understand the overall strategies, we've done the analytics, we found very relevant insights, and now, we want to develop a scorecard for the category. 

Your scorecard is not going to look the same as your corporate organizational scorecard. It is just at the category level. It might be from the volume metrics or the financials, so it may be something that you end up understanding. For example, last year we did 500,000, and this year our target is 550,000, so we need to build our sales by 50,000, and some of the key measures there. 

But the ones you really want to make sure you include are the ones that are going to help you to achieve your plan. 

For instance, if I've identified that I want my premium segment share to grow and that's going to be worth a certain number of dollars, I should have the target in there. Then we should be measuring against that to see if we're able to grab that additional market share. Or there might be things like store brand share and average household category dollars per year. Make sure the measures tie in with the assessment insights and strategies so you can create a compelling live scorecard you feel confident is going to help you to achieve your goals. 

The whole pizza now ties in beautifully together. You have your sauce and cheese to pull everything together and allow you to create relevant scorecards for your business based on what you're trying to accomplish. And if you work with retailers, or retailers who are doing these scorecards on their own, make sure that you have them so that you have this whole plan. Then, you can create this beautiful, delicious pizza, your category plan, that will help you to achieve your goals.

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Topics: Analytics Work, Strategy

Written by Sue Nicholls, CPSA Founder & President CMKG

Category Management is my passion. Since beginning with P&G in the late 1980s, I have dedicated my work life to building and sharing this passion with others through active involvement in the industry, including long-term business relationships with large Retailer and CPG executives, development and influence on Category Management Association certification standards, curriculum, and conference education, thought leadership publishing and presentations at CSP News’ Convenience University, CMA’s Annual Conference and LinkedIn, and as a member of DePaul University’s Center for Sales Leadership Advisory Board, and Western Michigan University’s Food Marketing Advisory Board. Beginning in 2019, our catalogue of accredited training that my team and I have developed is part of the Category Management Association’s strategic education initiative for all member organizations. Always anticipating where the industry is moving and the skills needed to compete and stay relevant, I’ve helped to bridge the gap between data and insights pioneering the way we use storytelling and data visualization to better understand analytics and make effective decisions for the future. Using my years of experience, I coach clients of all experience levels in the Retail, Manufacturer, and Solution Provider industries to help them propel forward achieving both their learning and career goals whether in eCommerce, sales, or marketing and beyond. My specialty lies in leadership and engagement, networking and consulting with individuals and large companies from around the world to better improve and develop our curriculum and accredited training programs, like our leading-edge Master’s Training, utilized by category management organizations for strategic education. Through this blog and other channels, I share my years of expertise with our industry and believe that an open and ongoing conversation can improve any team’s capacity to implement business strategies that achieve their strategic priorities.