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3 Tips for Customer-Driven Strategy in Manufacturing

Apr 22, 2015 3:41:46 PM

A couple weeks ago, my manager made an off-the-cuff comment that stopped me in my tracks.

“I don’t know why we call them ‘brand managers’ anymore,?" she remarked. “It implies that it’s marketing’s job to create the brand voice and push it out to eagerly waiting consumers. But that just isn’t true anymore. Really, they should be called ‘customer managers.’ The customer calls the shots now…and it’s our job to keep up with them.?"

Her comment stuck with me. While it oversimplified the complexities of brand management, I thought it was so reflective of how businesses have progressed and how marketing has changed.

It’s now imperative that a company understand their customers’ changing needs and create strategies built around the goal of maximizing the customer experience. It’s not just a marketing responsibility anymore. Everyone has to be aligned around the customer – from sales, to operations, and finance, and all the way through the supply chain.

There is perhaps no greater example of an industry that has been forced to rethink their strategies surrounding their customers than manufacturing. As the industry has become more saturated and, therefore, more competitive, more manufacturing companies are trying to compete in what has become a commoditized market.

One of the classic competitive strategies, price cutting, is no longer sufficient. Businesses must think beyond numbers and envision their long-term growth strategy with the customer at the center of the operation.

So, if a forward-thinking manufacturing company wanted to have their entire organization aligned with their customers’ needs, what would it take?

Here are 3 tips to developing customer-driven strategies:

1. Customer-obsession

Call it what you want - customer focus or obsession - your employees always put the customer first. No exceptions. You achieve this mentality by having the company’s complete buy-in…and financial backing.

The right investment in customer retention tools, research, and initiatives not only attracts new consumers, but keeps the ones you have happy and satisfied. This company mentality shift is holistic---the entire business must be invested and committed.

For the manufacturing industry, the first step is often to gather customer research about what customers really value and how you perform. This data prompts innovative thinking and can be used to shape the design and delivery of your offering. For example, it may reveal opportunities to invest in new manufacturing capabilities to address customer unmet needs. A 2014 study by the World Economic Forum found that investments in new capabilities were more effective than cost-cutting measures when customers perceived additional value.

2. Leverage data to drive strategy

Organizations these days not only need to understand their own customer data, but they need to identify trends that may impact the future of their business. This includes internal data but also includes scanning the external environment – even trends outside of your industry.

We all know that data and analytics are not enough on their own – they need to drive action. A recent Harvard Business Review article noted that while many companies invest in consumer research, they don’t know how to translate the insights effectively into company-wide strategic initiatives .

Often the trick is effective reporting to tell the story behind the data or visualize it in such a way that strategic actions flow from the insights. Investing in data visualization, action planning, brain-storming, and execution tools can greatly increase the likelihood of success.

3. Think beyond price

When sales decline or stall, it’s typical for leaders to focus on price cuts as a way to increase competitiveness. However, not only can it have dangerous implications for your profitability, but it’s often not the strongest driver in a customer’s purchasing decision. In other words, you can lower your price and STILL not attract more customers.

Challenge this traditional thinking by asking the following questions: What does our ideal customer value beyond price? What value do they gain by using our service or product versus our competition? What can we offer that no one else can?

A recent IDC manufacturing white paper declared that because today’s consumers are better connected and better informed through social media, the expectation of faster service and customized options has risen dramatically . Both B2B and B2C companies are feeling the pressure to continuously increase the value they provide to customers, and the manufacturing industry is no exception.

Many products and services on the market today are priced high, and consumers will gladly pay because they perceive there to be high value. Companies who have successfully created these pricing models understand the fundamental drivers of their customers’ buying decisions. How does your company’s product or delivery create motivation and excitement for future business?

In the cut-throat and commoditized markets that many manufacturing firms find themselves in, it’s more important than ever to understand what the customer values and use that understanding to drive strategy. This involves not just an inside-out approach to brand management, but an outside-in strategy – in other words, listening to customers and adapting to meet their needs.

Granted, it’s not easy to change internal processes and culture. The good news is that it’s hard for your competition, too. Whoever is able to meet the customer needs the best, the fastest, ultimately wins.

Only by challenging the status quo, is it possible to differentiate and succeed in a market like this. By keeping the focus on customers and developing customer-driven strategies, your company can differentiate itself in the market and grow.

Yohn. (2015). 7 Steps To Deliver Better Customer Experiences. Harvard Business Review. February 2015. Retrieved from URL.
IDC and Infofor. (2015). The Future of Manufacturing. Featured by IndustryWeek..

Topics: General

Written by Vennli

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