Marketers make promises to customers to generate demand. Delivering on those promises becomes a moment of truth in a customer relationship and can have a positive or negative impact on the perception of your brand.
If you deliver an order late, if you can't meet a rush order request or a channel partner fails to properly educate your customer, your brand invariably suffers. In an era of ever-increasing customer demands and impatience, it is your supply chain that often represents a critical opportunity for you to build or destroy your brand.
As Jan Twombly, a principal at The Rhythm of Business, states: “Supply operations are forever directly related to demand; and managers can't treat them as separate.”
However, few marketing and brand executives truly understand their company's supply chain. It is often regarded as either a nuisance or an irrelevance. That is, until something goes wrong or a promise cannot be met. Suddenly, your supply chain's shortcomings become the center of attention.
Should we blame the people who make the promise or the people who cannot fulfill it? It is critical for marketing and supply chain executives to jointly recognize where the supply chain can be leveraged to enhance a brand and where it cannot.
Supply Chain as Foundation for Building Brand Equity
Consider the different experiences of Kmart and Cisco Systems. Kmart's supply chain became a serious brand liability, while Cisco turned its capabilities into a core element of its brand image.
A central aspect of Kmart's marketing strategy was to issue circulars promoting sale items. The mailers drove store traffic and invariably increased sales of other items. However, the marketing efforts were not tied into supply chain operations.
As a result, there were frequent shortages of promoted items. Customers came in to buy the sale item, were frustrated that it wasn't there, and left the store. After several similar experiences, customers began ignoring the circulars altogether. Lack of coordination between marketing and the supply chain generated a brand nightmare.
By contrast, Cisco's supply chain is central to its brand and marketing strategy.
“One of the main objectives of our Cisco Service Parts business strategy is to use advanced supply chain management tools as a source of competitive advantage…. Our primary expectation is a significant improvement in customer service and satisfaction resulting from better positioning of our critical inventory assets,” said Jim Reily, director of global product services, in a CRMDaily.com interview. (Erika Morphy, “Cisco Greases its Supply Chain to Cut Costs,” January 9, 2002)
The article went on to highlight that “a streamlined supply chain and more responsive customer service operations will be essential for Cisco as it goes forward with plans to expand its market share.”
Cisco's Web site echoes this sentiment: “Taking orders is only one part of serving customer needs. Businesses must fulfill the promise they make to customers by delivering products and information upon request.”
Poor supply chain performance drives customers away. An enthusiastic customer can be lost as a result of a single bad buying experience; and a prospective customer can be turned away from your product by a poor or inadequate buying experience.
By contrast, think all of the businesses and consumers who value Dell's consistency and service enough to pay a little more for their commodity computer. Consider how Grainger added inventory and distribution centers to its service parts network to better serve its customers. These companies consistently deliver on their brand promises by employing world-class supply chains.
It is time for brand and marketing executives to pay more attention to their supply chains. They must be accountable for aligning the brand promise with their company's supply chain capability, because it has a powerful impact on customer experience and brand perception.
Take a Good Look at Your Supply Chain
One promise that is expected of every brand is delivering the right product to the right place at the right time. Your supply chain capabilities can make or break your ability to fulfill that promise. As a result, your supply chain has a powerful impact—positive or negative—on your brand.
When you think about your brand promise, make sure you spend as much time fulfilling the buying experience as you do on the image, marketing communications and product engineering. This requires both knowledge of your supply chain and the leadership to shape it to meet your brand needs.
It's time you begin using your supply chain to support and build your brand. It can reveal hidden assets and ensure that your brand is not undermined by fulfillment deficiencies.
Three questions for marketing, brand and supply chain Executives:
- What aspects of your supply chain have the most influence on your brand promise and your customers' buying experience?
- Is your brand promise aligned with your current supply chain capabilities?
- How can you ensure that marketing executives know your supply chain's capabilities and limitations while supply chain executives know the brand promise and their role in fulfilling it?
