How manufacturers can pivot their operations to get closer to their customers

Six to seven months ago companies were in shock. No one knew what was going to happen, things were shutting down, governments were enforcing new laws, new ways of living and everything was evolving. Companies went into survival mode to secure safe cash flow and keep employees and customers safe – Australia’s manufacturing industry was no different.

According to a recent article by McKinsey & Co, Australia and New Zealand manufacturers believe it will take longer than 12 months for operations to recover from the impacts of COVID-19.

But negative sentiment is also being matched by mid and long term actions: since COVID-19, manufacturers have been looking at how they can shift and pivot to be more commercially minded and develop a digital strategy that will help them differentiate.

Here’s how manufacturers can plan to get closer to their customers and become more efficient and dynamic.

Be up-to-date on the latest consumer behaviour

On average it takes 66 days for a habit to become automatic, and across the globe we have been practicing social distancing for over six months. During that time people have become more comfortable ordering online. The psychological hurdles have been removed and the consumer preferences have changed.

Consumers want convenience and are prepared to pay a premium for it. Companies that understand this shift in behaviour and provide personalised product suggestions are the ones that will get the wins. Manufacturers need to start thinking more direct to consumer channels and more digital channels with retailers.

Sustainability and transparency matter more than ever 

With customers and consumers wanting to know more about who they’re doing or giving business to, manufacturers need to ensure they’re not on the wrong side of the conversation.

Sustainability is a big pillar for manufacturers. Every CPG company has solar and every Enterprise has signed up to the United Nations Sustainable Development Goals. If you’re a  manufacturer who consumes a lot of electricity to run your machines, you could look at offsetting your carbon footprint.

Another big consumer trend impacting manufacturing is trust, traceability and transparency. Consumers will now pay more for products that they can see are from ethically sound manufacturing plants and raw materials, and the history of the product is traceable.

Rethink business models and data collection

A lot of manufacturers are looking at subscription based models – they’re not just for the Netflixs and Adobes. So, rather than buying a power tool, a customer can pay a monthly fee to rent one. We call this post purchase servitisation and it can help develop longer-term relationships between manufacturers and customers.

But to become closer to your customer manufacturers need to know who they are – and this means data. According to Salesforce’s State of the Connected Customer report, 79% of customers are happy to share data, but, in return, they want to get a contextualised experience back. In short, a critical value exchange needs to occur. For manufacturers and retailers, that might mean offering a free warranty in return for the customer details.

Giving power to the customer is also crucial to building trust and collecting data – 92% of customers are more likely to trust businesses with their data when they’re given control over what’s collected about them. Think of it this way, a customer will offer up their name and email in return for a free 60 day warranty. You now have their email, so you can contact them and offer a 15% discount on any products if, for example, they let you know their hobbies. You can organically, and ethically, start growing your first party data.

Enhance commercial excellence 

Traditionally, a lot of manufacturers have been very good at installing back office systems and investing in supply chain systems. But on the commercial side, it was all spreadsheets and manual processes.

It’s clear today’s manufacturers must digitise their operations and play on that engagement layer that consumers now expect.

To do this manufacturers need to have the right technology that is timely and relevant to their own journey. It also needs to allow them to connect and do business with their customers and consumers.

Salesforce has been working on an answer to this with their latest iteration of the Customer 360 platform and Salesforce CPQ. These platforms allow manufacturers to align products to a single view of the customer to enhance their experience and optimise internal processes. And according to a report by the IDC, this alignment not only drives cost reductions but increases profitability and differentiation.

And while these mid-to-long term plans and actions don’t have to happen all at once, starting to move your manual process to electronic is a great first step to getting closer to your customers and building business resilience.

Find out more about pivoting your operations in response to COVID-19 – download our new ebook Adapt & Thrive: Sales in manufacturing and distribution.


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