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Carlsberg Case Study

Carlsberg Case study

Background

J.C. Jacobsen founded Carlsberg in 1847 and in 2006, Carlsberg was ranked fifth brewer in the world with sales in 150 markets, rising from eighth place in 1999. Thirty-one thousand employees produce beer, soft drinks and mineral water at 95 sites in fifty countries. In 1975, the slogan ‘Probably the best lager in the world’ was developed.

Background Carlsberg Denmark

For twenty-five years, beer sales in Denmark declined as wine became the preferred social drink across Europe. The market has become much more competitive. In the last three years, beer has become Denmark’s favourite drink once more, but with this sudden resurgence in popularity, there are now 86 independent breweries serving a population of only 5 million!

Carlsberg serves 16,000 licensees in Denmark. Fifty-three Field Sales Representatives have 300 to 500 customers each, and they visit 5 of their most high-volume, high potential customers every day.

A proactive telesales team of 28 makes regular outbound calls to the next tier of customers in the Licensed trade (our case study deals with this group). Another 18 proactive telesalespeople call off-licence customers regularly. Customer Service Representatives take inbound calls from customers, which sometimes involves order-taking.Carlsberg has a 60% market share overall with a dominant 70% share of the licensed trade (‘on-trade’), but it is not complacent.

Situation

Although gross beer volume production has almost tripled globally over the last 8 years, the beer market in Denmark was stagnant between 2003 and 2004. In a fiercely competitive marketplace Carlsberg was losing market share to rival breweries on its own doorstep. For the parent company to slip down the rankings was bad for morale.

Claus Blæsbjerg, Head of Licensed Telesales (On Trade) and Klaus Pedersen, Regional Telesales Manager, manage the team of 28 salespeople in the Licensed Division. Each telesales representative handles between forty and fifty customers. Every week, they phoned to take orders and discuss new promotions. Market share was declining so a radical rethink was required.

Solution

In the summer of 2006, the blueprint for a radical restructure of the licensed (On Trade) business was developed. Outbound Telesales was a business unit in the logistics function and it was moved to frontline sales operations to be closer to the customer.

Objectives

Telesales Managers set these objectives:

  • Get closer to the customer
  • Realign and retrain the telesales team
  • Minimise routine order-taking and paperwork
  • Increase sales
  • Regain market share
  • Regain premium producer’s position in Denmark

Part of the change management was investment in training. Traditional classroom-based training was ruled out because Carlsberg could not allow Telesales staff to be away from the phones for two days. That would have directly affected sales. Unlike other training companies, Ladegaard offered a flexible alternative with an innovative, blended-learning sales training solution. They also made a bold promise of increasing sales by adding one extra crate of beer to every second order taken over the phone! Carlsberg liked the flexibility of a classroom, audio CD’s and internet-based training. They liked the tailored, product-focused solution that showed Ladegaard’s training was not an ‘off-the-shelf’ programme. They were reassured by major Danish companies on Ladegaard’s client list.

According to Sales Manager, Claus Blæsbjerg ‘This has been very much a knowledge partnership. Carlsberg has been very open about its challenges and we invited Ladegaard to coach our sales team at all levels.

’Between September 2006 and June 2007, twenty-eight people are taking part. They start with pre-course reading and the one-day introduction provides plenty of motivation with an overview of course content and trial exercises. One audio CD provides motivation for days when a salesperson finds things tough. The other contains revision modules on specific parts of the course. People listen to the CD’s as they drive and the web-based training involves multiple-choice tests, which are timed to simulate the pressure of real sales situations.

Another classroom session 6 weeks later, focuses on the specific daily challenges people face. The trainer uses live examples to coach people. Feedback on what worked and what didn’t allows the coach to refine the approach and sales techniques even more. The team encourages individuals and people are highly motivated to succeed.

Ladegaard is teaching Carlsberg’s team to prepare more thoroughly before each sales call. The key to increased sales has been making the right recommendation of beer for the customer’s brand portfolio. According to Claus Blæsbjerg ‘Ladegaard had the perfect concept for Carlsberg. So many times we have tried two-day training courses that have failed. A few days later people have forgotten 90% of what they learnt. Our telesales people cannot take two days out of the calendar, so the mix of self-study, internet-based training and coaching is absolutely ideal for our team.’

Results

Claus Blæsbjerg confirms that the average customer order value per outbound telesales phonecall has increased and says ‘We see a direct correlation between the amount of hours of self-study and increased sales. Blended learning changes people’s approach to their work and Ladegaard has a very strong training proposition, which has paid for itself in half the time.

’However, sales training is only one part of the jigsaw puzzle. The restructure has had a major impact and the new Web sales channel accounts for 2% of orders. Customers who used to call the Customer Service Department now browse online and their average order value has increased significantly through ‘self-service’. Gross sales are 4% to 5% up on the same period last year, which was already 5% up on the previous year. More importantly, following the restructure and training, Carlsberg Denmark’s annual profit has increased. According to Claus Blæsbjerg, ‘It’s the first time in twenty years we have had growth in the beer market so the restructuring has been a great success. It’s difficult to pinpoint the direct effect of sales training but we know it has contributed.’ Course founder Jens Ladegaard and PH Bergmann are working on a rollout into the off-licence (off-trade) distribution channel with another team of 18 telesales people.

 

Now that there is growing recognition that a positive corporate reputation and commercial success go hand in hand – and, by implication, a poor corporate reputation can negatively impact commercial performance – many organisations are wrestling with how best to get closer to understanding and shaping their evolving reputation.

For management teams who are committed to understanding more about their corporate reputation and embedding it within their organisation, the combination of primary research and ongoing content analytics provides a comprehensive toolkit which will assist in ensuring that measuring reputation is not a one-off, but can develop into a dynamic item on the strategic agenda.

 

The corporate reputation landscape

2015 was another year when many companies and organisations had to confront and handle challenging issues, some of which have resulted in deteriorating commercial and/or share price performance. Once again, in many cases, it will take years to restore confidence and trust among stakeholders and rebuild an organisation’s reputation.

Research of FTSE 350 companies, undertaken by SIFA Strategy in 2015 in partnership with Deloitte LLP, confirmed that 97% of respondents agreed that company reputation held commercial value. 38% confirmed that their organisations had witnessed a damaging event in the last five years, but only 16% stated that they actively measured their reputational performance. This appears to be an interesting conundrum: management appreciate that corporate reputation needs to be taken seriously but for one reason or another, this does not always translate into proactive measurement, monitoring and analysis of an evolving company reputation.

The tendency is for some organisations to adopt a more reactive approach: identify and rank key risks to its reputation and then prepare for such risks to become reality.

The organisations which tend to be more proactive are those who have already had their corporate reputation damaged and have decided to look after their reputation in a more structured way. Or, they are organisations that are very much in the public eye, are consumer-facing; regulated; or are involved in industry sectors that are taking steps to improve their overall company reputation.

For those who do decide to measure their evolving corporate reputation, the next question is what approach to take.

 

Reputation measurement: an historic perspective

Before the rise of technology facilitated a greater interconnectedness of stakeholders, different proxies for reputation were developed based on the stakeholder in question: investor relations would look at share price and analyst ratings to understand investor sentiment; HR would hold annual employee engagement surveys to understand the employee perspective; marketing and customer experience would have customer feedback surveys and Net 3. Promoter Scores; while Communications and Corporate Affairs tended to rely on media analysis to take the pulse of the media and public landscapes.

These proxies were adequate measures when it was possible to neatly segregate stakeholder groups. This was because each stakeholder group had its own interests and expectations which, by and large, existed in isolation from those of other stakeholders. This enabled companies to approach these stakeholders in very different ways and indeed led to the creation of separate siloed functions to deal with them.

With the advent of digital media and communications, we have witnessed an ever-increasing interaction between stakeholder groups and a consequent greater blurring of the boundaries between the interests, expectations and needs of different stakeholders. As information becomes more freely available, this segregated model of reputation proxies using different metrics and reporting on different frequencies is no longer fit for purpose.

 

Primary research and content analytics

Primary research plays an important role by enabling a company to engage directly with a range of informed stakeholders to bring their perspectives and opinions to the attention of the organisation. Essentially, primary research allows organisations to put a marker in the ground, providing the necessary data and feedback with which management can help to build and improve corporate reputation. Typically, primary research is undertaken on an annual basis, so that information gap needs to be filled if reputation is to become an important business tool which can be tracked and managed on an ongoing basis. Thankfully, content analytics can now fill that void.

This is the era of big data and publicly-available content provides organisations with a wealth of direct and indirect stakeholder perceptions that can be interrogated and analysed to understand shifts in sentiment for companies, issues and stakeholders over time. This content analytics includes the analysis of traditional media (print, broadcast, online and subscription sources), social media (Twitter, blogs, forums and social networks), surveys and analyst reports.

By joining up these two methodologies, organisations can now receive one standardised scorecard, which combines the benefits of the speed, breadth of sources and statistical rigour of the content analytics, with the direct experience, qualitative input of the primary research.

 

Case study: Carlsberg Group

Carlsberg Group took the decision to undertake primary research across all its key stakeholders – analysts, investors, retailers, wholesalers, consumers, politicians, NGOs, media and employees.

By conducting quantitative research across all these stakeholders, Carlsberg was able to gain valuable insight into how its corporate reputation was viewed on a variety of themes. In the case of Carlsberg, these included products, innovations, R&D, strategy, management, financial performance, organisational capability, employer branding or social responsibility. These were all considered to be market aspects that impacted on Carlsberg’s reputation.

Carlsberg rolled out this research across its largest 12 markets. The integrated metrics generated were helpful in guiding business planning, influencing business actions, developing key performance indicators and ultimately, linking remuneration to company reputational performance.

When considering reputation, the challenge is to establish a framework that sets the results in context, so the research programme can be extended to qualitative feedback and benchmarking against peers and peer sectors.

The solution is to have in place effective ongoing reputation intelligence that complements and is statistically aligned to the primary research. The question of alignment is an important one. For an organisation to actively measure and manage its evolving corporate reputation, it needs to be able to have access to robust data, both primary and thirdparty, which complements rather than contradicts.

alva and SIFA mapped three years’ historical primary research on Carlsberg against publicly-available content analytics gathered by alva. The latter includes the aforementioned sources such as print media, broadcast media, online media, blogs, micro-blogs, forums, podcasts, social networks, social photo, social video, wiki, financial analysis, political commentary, analyst notes in order to provide as full a picture as possible.

 

Correlating primary research and content analytics

To attempt the correlation between the content analytics and the primary research, alva compared its own content analytics data over a 22-month period with primary research commissioned by Carlsberg Group. The sample was restricted to data/responses from the United Kingdom only. The sample size for the alva content analytics was 3.2m pieces of content.

The 0-100 scoring range of Carlsberg’s primary research was re-baselined to the alva 1-10 scale and the scoring ranges normalised to align score distributions.

 

Prior to undertaking the regression analysis, alva created three hypotheses:

  • There would be a statistically significant correlation between the primary research and content analytics •
  • The alva content analytics would provide a leading indication of changes in the primary research data •
  • By extension, alva’s content analytics can be used as an alerting mechanism for the earlier intervention and management of emerging reputational risks A

 

Hypothesis 2: The alva content analytics provides a leading indication of changes in the primary research scores

With the correlation established, we can now look to understand whether one data set foreshadows the other. In the example reviewed, the trendlines for the alva content analytics pre-empted the ultimate changes in primary research scores. This can be clearly seen in Figure I. The greater number of data points provided by the content analytics (daily scores) in combination with the positive correlation means an executive reviewing the data would be able to predict the movements in primary research scores in advance of their publication.

Figure I: Primary research vs content analytics: Carlsberg

Figure II: Issues analysis of Carlsberg’s evolving corporate reputation

This helps to offset some of the understandable limitations of primary research. While primary research is important to engaging directly with stakeholders on the subject of an organisation’s reputation, a full survey tends to be carried out annually – or possibly every six months – which means that there can potentially be an information gap for much of the year. With content analytics added into the equation, this gap is removed.

 

Hypothesis 3: alva’s content analytics can be used as an alerting mechanism enabling the earlier intervention and management of emerging reputational risks.

Drilling deeper into the content analytics, it is possible to understand on a daily, weekly, monthly or quarterly basis the directional trend for the company’s reputation and, most importantly, the events and issues that are causing changes in corporate reputation.

Figure II shows high level examples of some of the issues driving Carlsberg’s scores over the period analysed. These graphs provide a month-by-month view but it is equally possible to zoom into a daily or weekly perspective, by stakeholder and issue.

Given the close correlation between the two data sets, executives can therefore assess the need to respond to emerging risks by the strength of the score changes in content analytics, measure performance relative to competitors as well as analysing the success or otherwise of their response. Being on top of the issues and having a consistent way of measuring their impact is key to an effective reputation management strategy.

 

Business application – key takeaways

As businesses increasingly recognise that a positive corporate reputation and commercial success go hand in hand, it is becoming ever more urgent for management teams to embed an enterprise-wide reputation analysis system.

Instead of being a direct choice between content analytics and primary research, alva and SIFA have developed a pioneering way of combining the two methodologies, enabling the creation of a robust, alwayson, comprehensive approach to reputation. This white paper establishes the following findings:

 

Companies need to start taking action on reputation: While 97% of FTSE 350 companies believe reputation holds commercial value only 16% stated that they actively measured their reputational performance

 

Media analysis is no longer fit for purpose: Traditional, single channel reputation proxies (such as media monitoring) are no longer fit for purpose in today’s multi-stakeholder 24/7 environment

 

Content analytics and primary research are complementary measures: alva and SIFA have established a positive correlation between content analytics and primary research data enabling companies to respond more quickly to emerging threats to reputation

 

A joined-up approach provides better insight: combination of primary research – to understand the key issues and drivers of company reputation across multiple stakeholders – and content analytics – enabling real-time monitoring and analysis of shifting stakeholder perceptions over time – provides a new holistic framework for measuring an evolving reputation

 

Boards can now proactively manage an evolving reputation

With a comprehensive way of analysing reputation now established, boards have a robust measure available to help protect and build the commercial value of their organisation.

 

Authors

Alastair Pickering is co-founder at alva, the market leader in reputation intelligence; alva monitors and analyses millions of pieces of publicly-available content every day, to inform organisations how their business is perceived by their stakeholders. alva currently works with 35% of the FTSE100.

Fergus Wylie and Ben Morton are co-founders of SIFA Strategy, a senior advisory business that supports organisations in understanding what influences and shapes their reputation. SIFA Strategy’s approach is underpinned by the use of bespoke stakeholder research and analytics to measure reputational performance, to embed reputation and to enhance stakeholder value.

 

For further information

alva Alastair Pickering

+44 (0)7590 763 132

alastair.pickering@alva-group.com

 

SIFA Strategy

Ben Morton

+44 (0)7899 792902

ben.morton@sifastrategy.com