An intriguing article in the Harvard Business Review, “When Marketing Is Strategy,” refocused my 2014 business goals. As the article states, the strategic question that drives business today is not “What else can we make?” but “What else can we do for our customers?”
My 2014 focus is not how many services I can sell, but what else can I do for my clients in order to enhance and increase the value of my partnership with them. Customers and the market—not the factory and the product (in our case not the deals and the services)—now stand at the core of the business. HBR calls this the new “center of gravity” demands.
As I was sitting with a client who oversees real estate for this region, I was reminded how prepared we need to be to broaden our discussion with our clients beyond the obvious point of interest. We never discussed the portfolio, but discussed all areas and divisions of the company that will be affecting the real estate portfolio this year. A huge topic was innovation.
Product innovation is changing the tide for our clients. As our client stated, the discussion has always been around cost-cutting strategies; now we are looking at revenue building strategies as well. In fact, the revenue-building strategies will be the focal point of discussion for this year with a couple of clients, as they are drastically affecting the operating strategy for the portfolios.
As HBR reports, companies’ upstream activities, such as sourcing, production, and logistics, are being commoditized or outsourced, while downstream activities aimed at shaping customers’ perception and reducing their costs and risks are emerging as the main sources of competitive advantage. How do we better partner on the upstream and downstream activities as we strategize and prepare for our national and regional client calls for this year?
My focus and expertise for this year will be on the downstream activities. This article concurs with my focus by stating, “in order to compete more effectively, our strategy should be to shift our client’s focus from upstream to downstream activities, emphasizing how they define their competitive set, help them influence customer’s purchase criteria (help define revenue-driven strategies or add value to strategy), help them to innovate to solve customer problems and build advantage by accumulating customer data and harnessing network effect.”
The point is, we must strategically foster discussion with our clients so new ideas emerge for internal and external needs that they may have not thought of themselves. The article gave a fascinating example of when someone asked Steve Jobs what market research went into the development of the iPad, Steve Jobs famously replied, “None. It’s not the consumers’ job to know what they want.”
Even when consumers do know what they want, asking them may not be the best way to find out. Understanding the focus and direction of the company/client we are working with allows us to create extrinsic value—a value or need they may not have considered.
As we help our clients to master downstream activities, it “allows them to build new forms of customer value and lasting differentiation,” HBR says. Eventually, what falls out of this strategic approach is our ultimate win of utilizing our consultative services and managing their real estate portfolio with a balance of growth and cost reduction.
Lisa Gardner, a former executive with both PepsiCo and J.C. Penney, heads up consulting and strategy development for OMS Strategic Advisors. Contact her at [email protected].
