Trying to do business in a time of rapid change is an enormous challenge. Customers’ expectations are constantly evolving, businesses have had to move in and out of lockdowns and costs have risen precipitously.
For a business to thrive in these challenging times, it might be time to rethink your approach. If you’re being led by your product, or by your sales team, the business is at risk of becoming stuck in a rut while the market moves on. Instead, by being market-led, the business can be responsive – leading to higher profits and happier customers.
What does it mean to be marketing-led?
There are three ways to approach organisational strategy: sales-led, production-led, and marketing-led:
These produce products or services, then attempt to sell them using promotions. They often use a hard sell approach and rely on sales volumes in order to make money. These businesses will send out a lot of emails and you’ll get a lot of attention during the sales journey, but much less if you encounter any problem. Many of our utilities providers use this approach, like power companies, in part because there is little differentiation between providers. They spend a lot on marketing.
These focus on producing a product or service. These business owners are passionate about their product or service, and put considerable effort into refining and improving of the production process. They head into the market to sell their products or service, relying on the quality of the product, rather than learning what customers actually want or need and aiming to meet the market. We see this in the project management software industry (think Asana, Trello, Basecamp, Monday.com and more) where each provider tries to create a unique product that they believe in, then use marketing to try to capture some market share.
These take a relationship approach – they focus on what their customers want and need. They research and identify products or services that customers are seeking, then aim to shape their products and services to fit those parameters. The research stage of this process can also pinpoint unmet needs in the market.
By constantly monitoring customer buying behaviours and feedback, production is altered so that as customers’ expectations change, their products are tweaked to meet these new expectations. Marketing-led businesses make their profits not only from better margins than their sales-led competitors, but also by having superior customer satisfaction and loyalty than either sales-led or production-led competitors.
Once the business has the research it needs, it can ensure their version of these products or services will satisfy those customers better than their competitors’ products do. They keep tabs on their competitors’ product development and marketing, so they can stay one step ahead.
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Advantages of a market-driven approach
What are the major advantages of market-led organisational culture?
– Greater profitability, because you’re not competing on cost so you don’t need rock-bottom prices
– Happier customers, who recommend the business to their friends
– Better customer retention, leading to lower lifetime customer costs and higher margins
– Overall, a more valuable business
A marketing-led approach is a win-win for both the customer and the organisation. Customers have their problems solved, or their needs met, which they appreciate.
The organisation can enjoy long-term financial and social success. Business survival is almost certain, because your customers appreciate what you offer and keep coming back, happy to spend money to get the best solution for their requirements.
How to become market-led
The first step is buy-in from the whole team. There must be a cultural shift within your organisation so everyone becomes the voice of the customer. For this approach to succeed, everyone in the organisation needs to maintain a customer focus. And it means committing resources – both financial and human – to meeting customers’ needs, for the long term.
How to make the shift to being truly market-led:
- Market research: This must be a priority. Set aside plenty of budget and do this well.
- Customer touchpoint mapping: Find out how your organisation “touches” its customers at each point in their customer journey. This forces you to think of your organisational interactions from a customer perspective and can be valuable in terms of pinpointing areas of improvement.
- Staff training programmes: Reinforcing that customer-centred approach throughout the customer journey.
- Marketing strategy and company mission statements: If they don’t already have a customer focus, it’s time to rewrite them.
- Deliver value: Build long-term relationships with customers by thoroughly understanding what they want and need.
- Customer monitoring: To make sure that when your customers’ expectations or needs evolve, you know about it and you can tweak your offering accordingly.
- More market research: It really is a priority and it should be a constant process.
Many of the above bullet points should be part of your marketing plan and roadmap. If you require a guide on how best to create an effective marketing plan, we recommend you download a copy of our step-by-step marketing guide.
The ultimate factors: information + teamwork
Ultimately it comes down to two factors: information flow and teamwork.
Information about customer needs and market opportunities need to flow throughout the business. It needs to flow into finance for backing, into production to be produced and ultimately into marketing and sales as part of a seamless operation.
The cultural shift required to ensure this seamless flow can be difficult to achieve. But it’s worth the effort. Once the customer focus is embedded in your organisational DNA, and it’s truly market-led, you’ll achieve long-term business growth and gains.
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NB: This article was published in the EMA “BusinessPlus” magazine. Enterprises of all types and sizes join the Employers and Manufacturers Association, for opportunities to learn and grow, make valuable business connections and change the world. EMA provides its members with professional advice and training to succeed in many aspects of business.