With 59 percent of senior marketers stating that they need to introduce more disciplined marketing execution systems to improve their existing marketing process, there is a need to understand, what does it take to shift from the status quo? We have identified five key principles marketers must optimize in order to streamline the fulfillment link of the overarching demand chain.
1. Executive Sponsorship
The first and most important step in shifting from the status quo is executive sponsorship. There are too many moving parts to delegate this shift to a mid-level manager or even the people responsible for the day-to-day execution and fulfillment. This needs to have a top down focus to gain access across the organization to uncover the true costs and optimization opportunities.
Another recent study by the CMO Council found that nearly 41 percent of marketers blamed functional silos and resistance to the operational marketing process as the greatest obstacle to effectiveness. This is certainly not to say marketing must absorb the responsibilities of operations, warehousing, procurement and beyond. Instead, the call to action is to collaborate cross-functionally and develop a comprehensive demand chain road map for the entire process, from creation to content delivery through the channel and into the hands of intended customers.
2. Look at the Whole Not the Parts
All too often, marketing, sales and operations teams orchestrate the go-to-market process as a loosely bound series of tactical elements lumped into a strategy. Creative is handed off to agencies who in turn engage legacy vendors to produce materials based on order quantities tied to “lowest per piece” pricing. These materials are then shuttled off to warehouses, in-house document management systems, or even external fulfillment partners who manage content renamed by SKU numbers.
While marketing has invested significant dollars and effort to improve operations, measurement and metrics at the start of this demand chain, little progress has been made from the creative handoff until after content reaches the consumer. Only 7 percent of respondents have vendors bid on an entire segment of the demand chain. This results in the majority of marketers reviewing each part and improved individually versus reviewing the whole process to understand what areas cause unnecessary work: what can be eliminated or streamlined in the process, and what technology can improve, removing human intervention?
Today, nearly 35 percent of marketers are leveraging three-10 vendors for this process resulting in multiple RFPs and different points throughout the contract cycle. RFPs focus on pieces of the process, not the whole process, often resulting in companies staying with the existing process or the status quo. It is considered a win because they were able to take costs down, but although the cost may be less, marketers cannot tell what is being sacrificed. Is it quality, attention to detail, responsiveness or just simply wasted time and effort in the process? In aggregate can costs be streamlined even more?
3. Look Beyond Delivery to the Order Process
Do you know what happens once materials arrive at a store or in a sales person’s hands? Are materials kitted appropriately, did everything arrive at once, or are end users such as store managers or highly compensated sales people searching for missing pieces of their orders, spending time reordering or repackaging materials? Is inbound and outbound freight optimized, or are items being overnighted because there are no controls in place for order management?
For example, imagine an average size retailer with 1,000 locations. If 1,000 store managers spend one hour a week doing extra work to order, track down orders, or reorder at an hourly wage of $20 that’s $20,000/week or 1,000 wasted store hours. Over the course of a year this can add up to $1,000,000 or 50,000 store hours. Now consider this same scenario if you have 5,000 sales reps in the same position.
The order process is the most overlooked area for improvement.
4. Select Partners Not Vendors
This study echoes what we are hearing in the marketplace, where 46 percent of marketer’s agree that their biggest challenge in driving optimization is having the right budget or resources. Shifting from the status quo can release more budget and resources to focus on mission critical objectives instead of tying together multiple vendors and disjointed processes. Marketers need to seek partners, not vendors, and this cannot be done through an RFP process. This must be a collaborative conversation with access to measurable objectives, information on how things are done today, and where the pain is through out the supply-chain.
Finding the right “fit” can feel like searching for a needle in a haystack. Marketers must look for partners who will align their strengths to optimize resources and work efficiently toward your business objectives. But, partners must also provide a breadth of services to fill the gaps in your marketing mix. Most importantly, seek out vendors with a partnership mentality as opposed to a commodity vendor. A true business partner will apply best practices and create cost efficiencies in the execution of your marketing programs, freeing up valuable resources that can then be deployed more productively.
Companies that are successful at shifting from the status quo recognize they are not the experts in marketing supply-chain and that they do not want to be. They rely on their partners just like the do their creative agencies to execute best practices, continually refine and optimize the process, and stay focused on the strategic objectives of their companies. They leverage their internal teams to act as a conduit between partners (creative agencies, printers, fulfillment partners, sales, and in-store teams).
5. Make Fulfillment Part of the Strategy
According to CMO Council research, only 1 percent of senior marketers believe it is their primary role to ensure sales, merchandising and fulfillment operations are properly provisioned. However, companies that are advanced in the end-to-end demand chain start by giving the execution team a seat at the table. They select partners that are experts at getting their materials to the field as fast as possible and who eliminate the unnecessary burden from the marketing, operations, sales and store environments. These partners understand what is possible, how to optimize the production of the creative message, and how to manage costs through order and inventory management and transportation among other costs.
For many of our clients, we have a seat at the table during their planning process so there are no surprises for us or our clients when we execute their campaigns. They view us as a partner that will ultimately help their creative make an impact where the message meets the audience.
Re-building the Weakest Link – Increasing Gain from the Demand-Chain
The mandate to rebuild the weakest link in the demand-chain must come from the top. There are pieces of this link that fall into multiple departments and cost centers that need a view from the top down, not just from their individual perspectives. Review your strategic initiatives – how does removing millions of dollars in soft and hard costs from the demand chain support those goals? Would your teams rather focus on emerging technologies, developing better creative or improving sales effectiveness to grow top line sales and bottom line results? Once you answer those questions, it becomes imperative to start moving from the status quo.
MIKE MOROZ is the President of Archway Marketing Services, Inc. where he is responsible for the company’s growth, innovation and the delivery of customized solutions and service to Fortune 1000 clients. As the leader of one of the fastest growing companies in North America, he is focused on improving the marketing supply-chain for clients and helping mature companies eliminate waste from their fulfillment process.
Prior to joining Archway in 2005, Moroz held executive management positions at Target Direct, ClickShip Direct, Inc. and Damark International, Inc. He received his bachelor’s degree from the University of Minnesota, Carlson School of Management.