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.
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.
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:
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.
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.
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:
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.
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.
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.
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.
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!
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.
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.
Let’s revisit three bullet points from above.
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.
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.
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!