In the book "Competitive Advantage: Michael Porter brakes down the value chain.  He defines the components of the value chain as inbound logistics, operations, outbound logistics, marketing and sales (of course lumped together, not stand-alone components), and service.  Company infrastructure, human resources, technology development, and procurement are supporting components.  But something?s missing.  Where?s the customer component?

Granted, each of these defined components touches the customer, but shouldn't the customer be a standalone component?  This is especially true given value chain analysis evaluates which value each particular activity adds to organization?s products or services.  This is what ultimately assists manufacturers in defining their competitive advantage. dilbert.jpg

Michael Rapaport published a piece on what the value chain means to manufacturing. He places the customer into the sales and marketing and service components.  It's a start, however in order to put the customer first, manufacturers must include the customer throughout the entire value chain.

Adjust the Purpose of Technology Development

Successful manufacturers have long used innovation and technology to improve products and processes. But this will change.  As the industry begins to recalibrate, success in the industry will be defined by those manufacturers who use technology and innovation to better service their customers.  Those are the manufacturers who will truly deliver value.  Perhaps more telling will be those manufacturers who crowdsource and capture the voice of the customer to inspire that innovation.

Design Sales and Marketing for the Customer

In manufacturing there is an increased pressure to focus on relationship selling.  And the emphasis on relationships extends beyond the sale and into the customer and partner journey.  You must engage throughout the journey.  You must leverage your communication channels and seize every opportunity to engage.  Work with your channel partners to leverage product registration.  Introduce advocacy programs to identify existing channel and end-user advocates, enhance relationships, obtain feedback on products and services, and identify future opportunities.

Become a source of helpful content for your customers. Content can include blogs, technical documentation, photographs, instructional videos, and customer testimonials.  It?s necessary for a company to understand their brand message, and develop and share content that aligns with that message.  But even a content library brimming with innovation is useless if the content is not delivered to the right person, at the right time in their journey.

Those manufacturers that truly want to be customer obsessed should consider building out a sales and marketing data model that contains buying behavior.  Capture information like inventory, purchase history, frequency of purchase, quantities of assets, partners they buy from, and average delivery time per partner and per asset.  Based on this data model, create dashboards that demonstrate trends in purchase, such as time of year and geography, opportunities for up-sells and add-ons, and sales cycle duration.  Use this information to proactively engage with relevant content at the right time.

Understand the Impact of Inbound and Outbound Logistics on the Customer

Let's look at sampling logistics.  Dow Chemical receives thousands of requests for product samples per month. Sample management had historically not only been an interesting challenge for this complex company, but was also an important one which had a direct and potentially significant impact on sales and revenue growth. Rather than try to transform the sample management process, Dow decided to exploit this bottleneck by first streamlining the sample follow-up process.  When a sample was requested, it was shipped and an email campaign was triggered to follow up with the customer. The email campaign included basic questions to check that the sample was received and enabled Dow to gather additional information on the customer?s needs.  Customers who responded to the sample follow-up campaign were then routed to the sales team. Their sample program now commands anywhere from a 40-50% response rate.

Broaden Operations Analysis

Operations is more than just taking a raw material and creating a finished product.  It's important for manufacturers to maximize productivity, eliminate waste, reduce costs, and increase throughput.  Manufacturers generate a lot of waste through their efforts and resource allocation. Understanding where to focus your people, time, and money can eliminate waste.  You can do this by understanding the engagement of your audiences, both external and internal across all channels, and taking steps to enhance their experiences.

Create a component dedicated to customer intimacy

Services must extend beyond warranties.  Manufacturers need to dedicate resources for customer intimacy.  Consider developing a customer advocacy program, leverage content created for the customer (or even better, by the customer), understand engagement trends and which tactics and cadences are most effective.

Thermo Fisher Scientific wanted to develop customer intimacy and, therefore, developed a program for their customers to help them get labs up-and-running faster.  By creating a trigger campaign that allowed the application process, approval process and all email communications, including account verification, suggested promotions and reminder emails, to be automated for New Lab Start Up customers they were able to exploit their bottleneck.  They saw a 22.5% increase in redemption offers through this program.


How are you building the customer into the value chain?