When developing a business strategy, don’t think about what product or service you can develop. Think about what you can do for your potential customers.
I recently had a conversation with a colleague about how Facebook has grown to become the preeminent social media network. It has supplanted Friendster and MySpace as the go-to destination for both consumers and brands. But what makes this network so different?
Relatively speaking, it has the same types of employees as employees bounce around different tech companies like a flea in a dog park. They’re all smart and very productive, but they’re not the key to the company’s success. It’s the one billion people who enjoy the network effects.
Meaning, people know Facebook is a destination where everyone else is hanging out. The company does everything possible to maintain its position as the gold standard in social networking. Facebook has a stronghold on user information as it’s not portable to any other site.
The network’s timeline, events, videos, games, apps are all locked down. As a result, users must stay on Facebook if they want to remain a part of the social village.
Facebook places marketing at the center of its business strategy because executives understand the value of providing a unique service to its user base. This is evident by the site’s pedestrian design and layout. It’s not the look of the site that keeps people coming back; it’s the functionality it provides its users.
Facebook’s competitive advantage comes from outside the organization, not its employees.
So, when developing a business strategy, understand the value your business can bring potential customers before establishing any other business priority.
Why marketing should be at the center of your business strategy
Strategy is Marketing
Gone are the days where you go out and acquire customers. By virtue of the Internet, today’s consumers are researchers. They conduct online searches for the best deals and reference social media for product reviews and testimonials.
These criteria are also becoming the basis on which customers shop. So, to leverage this behavior, businesses should focus on why marketing should be at the center of their overall business strategy. By simply asking this question, an organization is taking the first step to letting its business process fuel its marketing campaign. I understand you are questioning how exactly can this take place. It’s simple, examine all your business operations with a marketing lens. Determine if that process is helping to market your organization.
Your Customers Are Talking
Companies spend millions of dollars on focus groups and surveys to aid marketing efforts. When placing marketing at the center of your business strategy, the voice of the customer reigns supreme. This voice drives decisions related to products, prices, store placement, promotions, etc. The evolution of customers’ purchasing decisions are driving the market. Product improvements just won’t cut it.
Companies are finding success not by responding to customers’ preferences but by defining what customers are looking for.
When asked about the market research that went into the development of the iPad, Steve Jobs replied, “None. It’s not the consumers’ job to know what they want.” And even when consumers do know what they want, asking them may not be the best way to find out.
ZARA, the fashion retailer, does this masterfully. The brand places a limited number of products on the shelf for short periods of time focusing only on what’s “hot”. The retailer is set up to respond to actual customer purchase behavior, rapidly increasing production of products that fly off the shelf and removing those that don’t.
The success that ZARA has gained is a great case study for why you should place marketing at the center for your business strategy.
Customer Service Shifted to Customer Cultivation
Now companies have powerful technologies for interacting with customers and collecting information about them. With this information, they can tailor their offerings accordingly.
The process of tailoring products and services to match market demands have become the impetus of many start-up companies. They have seen success by creating a strategy around customer cultivation while failing companies focus on customer service.
Simply put, a company can have all the tools and technology to manage customer relationships but will fall short if they are set up to market products rather than cultivate customers. Ultimately, prioritizing customer cultivation over product innovation conveys how a business is placing marketing at the center of its strategy.
It’s no longer about developing better products or services. Your focus should be on the needs of customers. By placing marketing at the center of strategy, you will have a strong competitive advantage. It would be very remiss if a company invested in customer relationship management tools when it has an antiquated business model. If a company is cranking out products like it’s in the middle of the industrial revolution, its success will be short lived.
Take Facebook’s approach to product development. Understand that your product’s look and feel do not necessarily need to be innovative, but the utility it provides must help improve lives and experiences of customers. The evolution of customers’ purchasing decisions are driving the market. Product improvements just won’t cut it.
That’s why marketing should be at the center of your business strategy. Can you think of more reasons? Let me know in the comments section.