Market Effectiveness: The Customer Journey Map for Manufacturing and Distribution Companies – Direct to Consumer – Bricks & Mortar – Business to Business
Market Effectiveness, a term used by Group50® Consulting, defines the business processes associated with serving customers. In every business, managing and optimizing these processes are critical to success. Manufacturing and distribution companies are especially challenged because there are many channels of distribution they must be effective at: Direct to Consumer (D2C), Bricks & Mortar and Business to Business (B2B). This article outlines how Group50® Consulting designs and develops effective marketing and sales programs for its manufacturing and distribution clients who sell to multiple channels. In our work, we find that any single customer channel is complex, but when selling to many channels, clients must navigate a complex relationship between them: a relationship which is multi-dimensional. How good they are at it will define the company’s Market Effectiveness.
What is Market Effectiveness?
Market Effectiveness describes all business processes that are focused on serving the company’s customers. Market Effectiveness consists of categories of activities that include Strategic Planning, Product and Portfolio Management, Product Development, Marketing, and Sales as shown in the following graphic.
Each category has a corresponding set of elements that are critical to Market Effectiveness. These activities make up the entire set of business processes that address customer needs. They are all focused on developing products and services that will meet the needs of their served demographics and differentiate them from their competitors. Leadership often believes that this describes the needs of the end user, but in manufacturing and distribution, the end user is only one portion of the customer base they must effectively serve. Manufacturers and distributors have multi-step channels of distribution they need to consider. These include but aren’t limited to:
- Manufacturer’s representatives
- Business to Business
- The internet
a. The company website
b. Marketplaces such as eBay, Etsy, Facebook, Instagram, and others
d. Retail.com: The websites of their customers
Selling products and services in today’s marketplace requires a keen understanding of many different customer needs and a set of business strategies that will guide them through the process of purchasing products and services. The typical ecosystem for today’s marketplace is shown in the figure below.
One of the key elements of the above graphic is the differentiation between the virtual world and the physical world. For manufacturers and distributors, they must effectively live in both worlds. The internet is the prime sales mechanism for the virtual world, while sales teams are typically required to support the physical world. The virtual world leads customers to the proper location to buy products and services which often exist in both worlds. This relationship requires the development of well-defined business strategies for both worlds.
One of the tools we use to help clients sort this out is the customer journey map. It serves as a blueprint of the path that customers take from discovering a product to making a purchase and beyond. It involves educating the customers via the internet, guiding them through the proper product bundles and subscriptions, and strategically leading them to purchase points that maximize profit margins for the company.
Understanding the Customer Journey Map
A customer journey map is a visual representation of every experience customers will have with the company. Each brand, product, channel of distribution and served demographic will have a unique customer journey map. It helps guide companies on how to define the story of a customer’s experience from initial contact, through the process of engagement and into a long-term relationship. The customer journey map for manufacturers and distributors can be illustrated in the following graphic.
This tool combines D2C and B2B principles into one customer journey map which is critical in today’s marketplaces. We use it to uncover deep insights into how our clients address customer motivations, needs, and pain points, enabling manufacturers and distributors to tailor their marketing strategies effectively. Manufacturers and distributors must focus their efforts via the internet to get to market faster, acquire more customer data, control the customer experience, and improve their margins.
Statistics indicate that 81% of all customers research their product needs via the internet before making any purchase decisions. While there are some industries where this may not be as important (nuclear reactors, commercial airplanes, and some others) this statistic applies to the vast majority of manufacturers and distributors. Prior to the pandemic, this was most relevant to D2C customers who purchased products directly. During the pandemic, this statistic became valid for B2B customers as well. Even if you have a good sales force, they are dependent on customers finding out about your product and are significantly aided by the company’s approach to making potential customers aware of their products. The more information potential customers can glean from the internet, the more likely they are going to believe your sales pitch. We take this approach extensively in our own consulting business which has significantly increased our close rates on new projects.
The customer awareness strategy is a critical first step. Awareness strategies, such as publications, direct mail, infomercials, word of mouth, social media, trade websites, eBooks, webinars, and tutorials, can provide value to customers and establish the company as a thought leader in its niche.
Making customers aware of your company’s products and services is not enough. In the age of digital marketing, education is a powerful approach for taking the next steps in D2C and B2B sales. You cannot educate your customer too much. Think of education as a learning map: a series of coordinated steps to make the customer as knowledgeable as possible. Customers need to be educated about the value proposition of each brand and its associated products and services and how it fits their needs. Education is also important to communicate how those products and services are differentiated from competitor’s offerings.
Once educated, customers need guidance to navigate the company’s product portfolio. Manufacturing and distribution companies can leverage digital marketing techniques to highlight the benefits of different product bundles and subscriptions. This part of the customer journey map will leverage social media platforms, utilize influencers and bloggers, offer marketing literature, performance studies and infomercials to educate potential customers.
Once educated, the customer is faced with the decision on where to buy the products and services they desire. The focus of a successful customer journey map is to guide the customer to the purchase option that delivers the highest profit margin for the company. But it isn’t that simple, because, as customers, we each have our preferred source. In the D2C world, it is incumbent on the company to have their products available in as many locations as possible to satisfy customer needs: the company website, bricks & mortar, marketplaces, retail.com, distributors, etc. This is where the power of the customer journey map really shines, because it forces manufacturers and distributors to think through the following things:
- What channels of distribution will the product be available in?
- Does price point influence channels that will be utilized?
- How to make sure that every channel realizes its profitability needs.
- Resolving potential conflicts between channels
The following example will help illustrate the importance of these decisions. Every channel of distribution serves a specific sales need. While a company’s website may provide the highest profit margin, many D2C companies also sell on amazon, because of its strong market presence. One manufacturing client of ours had a significant market share for its products at their bricks and mortar customers, but no presence on Amazon which had the majority share for their product category. Working through the customer journey map, they were able to create marketing and sales strategies that worked well for both channels. They ultimately decided to create a new brand for their existing products to exclusively service Amazon, which required a new set of awareness and education strategies. This may sound very complex, but successful companies take the time to work through these issues.
In another example, one client chose to keep their high-end product on their own website, allowing them to direct customers to them and ultimately buy all price points on their website. They also chose to sell mid-price point and lower price point products on the other virtual channels and bricks and mortar.
It is important to remember that each channel serves a specific customer demographic, and the customer journey map allows companies to pick and choose where the product should exist for sale.
Today’s customers are fickle. Follow-up is an important customer service. Despite that, most of our clients do a poor job of follow-up. They think that occasional communication or an email every once in a while is sufficient. They miss out on the opportunity to stay top of mind with their customers and keep them for a long time.
By continually communicating the benefits of the products they have purchased, customer retention is significantly increased. D2C companies understand this, which is why we are bombarded with constant communication from companies we have purchased products from. There is a fine line between good follow-up and constant irritation. The customer journey map requires that a company identify the appropriate follow-up methods for each channel of distribution and brand. It is part of a well thought through sales process for every channel of distribution. Methods of follow-up include but aren’t limited to direct mail, phone calls, subscriptions to newsletters, help desks, eMail, surveys, and social media.
Brand loyalty is fleeting, and companies need to figure out how to keep customers. In the D2C world, it is known as customer retention and companies work hard to retain customers because it is far more costly to get new customers than it is to retain them. This applies to the B2B world as well. How do you generate loyalty? Follow-up is the first step, but generating loyalty requires much more. It requires that companies continuously provide their customers with more products and services.
In a past blog article, entitled: Don’t Sell Products, Sell Systems – The Product Lifecycle Revenue Model we wrote about companies selling systems and solutions. A product system is defined as a bundle of products and services that serve the broader needs of a customer over an extended period of time. We seldom buy just one item. We buy a series of items to fit a need. There is no product that I know of that can’t be made into a system or solution. Companies that understand this create products that have enhancements and offer additional add-on products and services that are offered over time. This is an important part of developing the business case for product/services development cycle and is an important part of our product development stagegate process. We work with clients to develop products and business strategies that have a long tail which increases customer loyalty.
When a company offers product solutions, follow-up and loyalty is easier to manage and the entire product line is more profitable. When a product/service revenue model is well defined, it opens a myriad of opportunities for the company to maintain brand and product loyalty. Customer loyalty can be enhanced by using custom apps, eMail, subscriptions, loyalty programs, product bundling and performance challenges.
Have you ever heard of how network theory can be applied to sales and marketing? Briefly, customers networking with each other is a significant opportunity that most of our clients don’t understand. Customers have a voice and providing them the opportunity to exercise that voice allows companies to utilize networks of people to better understand the benefits of a company’s products and services. Properly done, it exponentially increases the validity of claims the company is making about its products and services. Many companies utilize the Net Promoter Score (NPS) and Voice of the customer (VOC) to understand how their customers feel about their products and service, but don’t take it any further. A properly developed customer journey map will identify ways to leverage NPS and VOC and define communication channels that are available to current and future customers. Advocacy channels that can be utilized include bloggers, influencers, testimonials, engagement, sharing and friends and family. Some clients believe this is only for D2C channels, but are just as important in the B2B world, because we rely on what others have to say when making purchasing decisions.
In summary, the customer journey map provides an opportunity for a company to Integrate B2B and D2C models into one cohesive marketing and sales strategy. While D2C focuses on selling directly to the end consumer, integrating a D2C approach to B2B broadens the market reach of manufacturing and distribution companies.
Digital marketing is not just about reaching an audience but also about educating them. SEO can help a manufacturing company’s educational content reach the top of search engine results, where customers are looking for information. Social media marketing can promote this content and engage customers in a dialogue, adding value to the customer journey.
In conclusion, manufacturing and distribution companies that effectively build customer journey maps for their products and services can significantly enhance their market effectiveness. It stimulates growth and profitability. By educating customers via digital marketing, guiding them to the right product bundles and subscriptions, and selecting strategic points of sale, these companies can maximize their profit margins and stimulate growth. The integration of D2C and B2B models and the effective use of the top internet sales channels are instrumental in achieving these goals.
One last thought: While this customer journey map focuses on how to reach a customer, the customer experience is also influenced by the customer’s interaction with the company. In the following article: A Customer Journey Map identifies the “Moments of Truth” in your organization, we discuss ways to significantly increase the customer experience after they have purchased the product.
Group50® consultants uniquely understand how to help manufacturers and distributors rethink their approach to market effectiveness utilizing the customer journey map. You can reach a Group50® expert by calling (909) 949-9083, sending a note to email@example.com or requesting more information here.
About the Author: Jim Gitney is the CEO of Group50® Consulting and the author of Strategy Realized – The Business Hierarchy of Needs®. He works extensively with manufacturers and distributors in helping them develop their business strategies including the application of Group50’s customer journey map to enhance profitability and growth.
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