I am the Vice President of Product Marketing for ThroughPut Inc., an AI-Powered Supply Chain Management Software Company based in the U.S.
The pandemic has radically changed the product-marketing landscape. Unfamiliar demand trends are now the norm in every sector, and the crisis exposed key areas of complexity, weakness and fragility in both B2B and B2C decision-making. Many companies are now looking at a harsh reality that includes deep budget cuts, scant forecasting resources and a cash crunch that could dramatically shift marketing priorities.
In the post-Covid-19 world, supply chain industry leaders will need to be far more effective at measuring and showcasing performance and tracking key parameters like revenue, sales effectiveness and customer acquisition cost. Under much tighter budget constraints, CFOs will likely only open the business coffers when marketing executives and supply and operations planning (S&OP) leaders can demonstrate their joint ability to drive and optimize continued revenue growth.
Proving The Value Of Marketing
Digital transformation can help turn marketing into a major revenue source: CMOs and their departments can spot critical shifts in consumer behavior, supply chain disruptions that could result in lost sales and information about margins that can change how companies prioritize the sale of certain products.
I believe focused customer care, creative thinking and new digital tools will be indispensable for addressing customer needs and forging stronger relationships in the post-Covid-19 era. Detailed examinations of buyers’ journeys and preferences can help generate marketing revenue. CMOs can deliver this unique value to their companies — provided they have the marketing budget.
Because your CFO may still be under intense pressure, you should clearly show the ROI of your marketing efforts to gain their support. Here’s how:
1. Keep The Customer At The Center
It’s certainly important to cater to the customer by delivering high-quality goods and services at lower costs, but it’s also important to create an uninterrupted flow of materials to meet unpredictable customer demand. As you prioritize greater agility and efficiency, make sure customer satisfaction is a guiding principle for all of your important decisions.
You should integrate siloed systems to create a comprehensive, customer-centric view of your key performance indicators (KPIs) and logistics and allow your team to quickly differentiate between an emerging, potentially profitable trend and a financially risky one.
Marketers can explore different go-to-market strategies to identify the optimal mix of products for customers at the national, regional and local levels. They can also analyze product mix strategies for different retail channels in different types of stores and regions. Consider introducing new products, which often require deeper forecasting, especially at the supply chain and manufacturing levels.
2. Establish Clear Metrics And Alignment
Many marketers take a “the more the merrier” approach to metrics. When you’re dealing with your CFO, however, excess data points can require superfluous explanations that distract from the goal. The CFO generally cares about two things: numbers about free cash flow and ROI. Prioritize three or four key metrics and carve out clear short-, mid- and long-term goals. Showcase what the leading indicators for success could look like to ensure alignment and gain buy-in.
One of the leading factors for supply chain marketing and S&OP leaders to consider is product mix optimization. To achieve this, they should curate micro-assortments and work to determine accurate stock levels with relevant product and category vicinity, effective pricing and profitable promotions. This can help them achieve high market penetration for top-performing SKUs, enhance the portfolio management process and prepare business leaders, managers and field operators with data-driven insights.
3. Make Data-Driven Decisions
The post-pandemic era will likely come with a host of uncertainties and supply chain risks. In response, CMOs should split their products into several categories: products that are being phased out and replaced, products that have lost customers and are no longer needed and products that might be complementary or staple items and can drive traffic. In this last case, it’s important to determine whether the extra traffic generated at the expense of these items drives an overall positive throughput when losses are combined with increased sales of the complimentary items.
4. Embrace Automation
You can also use a number of AI and machine learning tools to further refine, update and analyze data samples and help you identify the right products for each market. You can use these technologies to segment sales data for detailed comparisons and identify the best products for each market segment based on factors like demographics, geography, local preferences and purchasing habits. (Full disclosure: My company offers a solution like this, as do others.)
Automation has two major selling points for a CFO: It can increase efficiency and minimize manual errors.
5. Use This Data To Convince Your CFO
Marketing can help your organization create a strong product mix while overcoming unpredictable consumer demand, but you must first convince your CFO of these benefits. Start by partnering with your S&OP teams to accurately analyze and correlate demand insights.
Once you complete the steps above, you should use this information to inform your marketing proposals to the CFO.
• Share recommendations with corrective actions and prioritization for the most significant return on investment based on time and effort.
• Focus on higher sales campaigns: Seek additional budget for the best-selling products. Identify the right products for various segments and buyer groups and clearly communicate the data that supports the value of your marketing initiatives.
• Share risk-reduction campaigns: Propose targeted campaigns to optimize conversions in struggling segments via promotion strategies that focus on these segments.
• Continuously monitor relevant sales metrics. Focus on “lost sales” and “lost throughput.” This gives you a straightforward way to focus on and prioritize marketing improvements that will drive higher gains.
By following the steps above, you can start unlocking the share of budget that your department deserves.