Amazon is starting to ship packages to your home the next day. More and more, customers are expecting small business owners to provide the same level of service. Business owners, of course, have to try to keep up – managing the supply chain and marketing go hand in hand.
With the pressure building, it’s becoming ever more apparent how closely related supply chain management and marketing are. You can’t separate the two. In the words of Steve Olenski’s article on Forbes, A Marketing Team’s Success Is Only As Good As The Company’s Supply Chain Management Process.
With this in mind, we’re going to closely examine the relationship between these two departments and show you how you can use supply chain management as a marketing tool.
What is Supply Chain Marketing?
Supply chain management is all about the physical flow of goods. In a previous post of ours, we describe it as “the throughline that connects raw materials to customer experience. Supply chain management involves the procurement of raw materials, product development, manufacturing and production, logistics, data management, and more.”
Marketing, on the other hand, covers a wide variety of activities that convince people to buy your products or use your services. Objectives of marketing, according to the linked source, include customer satisfaction, demand and profit generation, market share growth, and branding and public image.
Supply chain marketing, therefore, is where these two departments meet. Essentially, it means using supply chain management as a marketing tool.
Why Does Supply Chain Marketing Matter?
Using supply chain management as a marketing tool sounds straightforward, but it’s actually pretty nuanced. To understand why supply chain management matters from a marketing perspective, you need to understand customer experience first.
Customer experience (CX, for short), is “your customers’ holistic perception of their experience with your business or brand.”
Fair or unfair, the supply chain affects the way your business is perceived. If items break during freight shipping and aren’t caught by quality assurance, they will ship broken to your customers. If your fulfillment warehouse takes a week to process an order, the customer will be livid that the item took 10 days to ship (after adding 3 days for shipping). They might even blame your business for a package that’s been stolen from their doorstep!
Not convinced? Consider the following:
- When you see the supply chain as a marketing tool, you can see breakdowns for what they really are – inconveniences to the customer. They are not abstract business problems anymore.
- Marketing involvement forces you to see value from the customer’s perspective. This makes it easier to find non-value added activities.
- Likewise, you can find out which supply chain activities are adding value and do more of them.
- Seeing supply chain management as a marketing tool allows you to create marketing goals and objectives based around supply chain activities.
- You can increase revenue by taking advantage of the opportunities that are already available.
- Customer relationship management becomes a lot easier when supply chain management is seen as a tool for marketing.
- Quality of customer service, in particular, can benefit from a good relationship between supply chain management and marketing.
11 Practical Tips for Great Supply Chain Marketing
It’s easy to say in the abstract that supply chain management and marketing should go hand in hand. Making this happen in reality is a bit different. On that note, we will now cover 11 ways that you can actually marry the two.
1. Acknowledge that the supply chain will affect marketing.
First things first, decision-makers in your company need to acknowledge that the supply chain will affect marketing. It’s a simple fact that you cannot change process without getting the right people on board. That means everything we said about customer experience above, you will need to relay to the right people. Similarly, if you’re the main decision-maker, you need to explain yourself to the people who will be carrying out your plans.
2. See value through your customer’s eyes.
Marketing is ultimately about creating the right experiences for the right people. That means you need to give your customers what they really care about. Certainly, that includes things affected by the supply chain.
To help clarify what we mean by that, let’s review the supply chain and talk about why each function matters to the customer:
- If you don’t plan adequately for demand, you risk running out of stock. That’s annoying to customers!
- Should there be a quality issue with the raw materials, the overall quality of your product will decline.
- Issues with manufacturing and production can reduce the quality of your product, too.
- If your products are broken during transportation, warehousing, or distribution, your customers won’t be happy when they receive the broken product as a result!
- If order fulfillment is slow, your brand will suffer the consequences.
- Slow returns are a major issue, too. Reverse logistics is a part of the customer experience, too!
3. Eliminate activities that don’t add value to the customer.
Any kind of waste in your business processes can lead to excessive expenses. That leaves you with less money to invest in what matters to your customer. When you start seeing your supply chain from a marketing standpoint, it gives you a good chance to go lean and eliminate processes that just aren’t working.
4. Focus more on activities that add value to the customer.
The inverse is true, as well. When marketing staff weigh in on supply chain processes, they can encourage activities that make the customer’s life better. That might include a better warehouse location, more shipping options, or fewer returns.
5. Set supply chain goals based on what is good for the customer.
When a stronger alliance between supply chain management and marketing, you gain visibility into processes. Along with that increased visibility, you have the chance to set goals that will meaningfully impact the customer experience. In short, not only can you do less of what doesn’t matter and more of what does, you can measure your progress while you’re at it.
6. Set service level goals for the supply chain that will keep the customer happy.
With clearly defined goals in mind, you can work backward and determine what needs to be done from an operational standpoint to serve the customer. That way, instead of supply chain operations determining what the customer gets, the customer determines what the supply chain gives.
7. Know that marketing at least partly drives demand.
Marketing efforts drive demand. That means supply chain management has to keep promises made or implied by marketing. By bringing supply chain management and marketing closer together, you reduce the risk of having too much inventory on hand, or worse, not enough!
8. Make sure marketing knows where to market based on cost to ship goods!
Modern marketing tools allow marketers to target based on location. Some locations are a lot more expensive to ship to. For that reason, supply chain management is a necessary reality check on cheap marketing ads to, say, the island nation of Tuvalu.
9. Remember that marketing itself needs a supply chain.
Marketing often involves the creation and dissemination of written materials. Pamphlets, fliers, posters, mail campaigns, you name it!
If you’re running a big operation, your marketing team may need its own supply chain.
10. Make sure the supply chain is producing quality products.
Let’s revisit three bullet points from above.
- Should there be a quality issue with the raw materials, the overall quality of your product will decline.
- Issues with manufacturing and production can reduce the quality of your product, too.
- If your products are broken during transportation, warehousing, or distribution, your customers won’t be happy when they receive the broken product as a result!
It’s a very basic business lesson, but it’s the truth. Make sure you’re creating quality products and that nothing in your supply chain is sabotaging that.
11. Don’t forget about social responsibility.
Customers these days are more concerned about social issues than they used to be. That includes issues like climate change and workers’ welfare. Supply chain management is notoriously bad about contributing to climate change and infringing upon workers’ rights.
Customers are expecting corporations to act better, and brand managers are trying to cope. Taking social responsibility seriously can be good for branding, which is yet another reason to bring marketing and supply chain management together.
Final Thoughts
You can’t decouple shipping and customer experience. Likewise, you can’t decouple supply chain management and the discipline of marketing. It makes sense to treat the two as closely related.
Never forget: if your customers know you only from your website and the quality of your shipping, that’s their ENTIRE experience of your company. Better make it a good one!
You’ve done everything by the book. Your Kickstarter campaign is almost ready to launch.
You made a great product. Built an audience. Set up a campaign page.
But how do you ship it?
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