Top Manufacturing Companies Move Closer to Customers to Improve Profitability

     

Who is the most important person in your company? The CEO? The person who makes the coffee each morning? It’s neither of these roles, critical though they are to both leadership and morale. It’s the customer, and without close ties to your customers, you run the risk of manufacturing products that nobody will buy.

KPMG surveyed manufacturers and found that keeping close to their customers is directly related to innovation, thought leadership, and profitability.

With 49% percent of manufacturing CEOs who responded to the study agreeing that their business will change dramatically over the next three years, it’s smart to pay close attention to your customers. Your customers wants, needs, and desires will lead the way to your next best-selling product and important innovation.

Shifting from Product-Centered to Customer-Centered

It can be difficult for some manufacturers to shift from a product-centered mindset to a customer-focused mindset. Product-centered comes naturally to some businesses. It focuses on “We have a product, now go find customers to buy it” mentality.

Customer-centric methods mean assessing what the customers need and what they will pay for it, then building and selling it. This means more involvement and investment in R&D, databases such as BI and ERP systems to access important data, and less emphasis on sales. With the right products, the sales and marketing team won’t have to push so hard to close a sale. Money that was once invested in selling moribund or stagnant products can be put into research and development.

Leapfrogging Dealer Networks

New communications channels have made it possible for manufacturers to bypass or leapfrog right over dealer networks to communicate directly with customers. Although you may choose to maintain a dealer network or a dealer network may be an integral part of your business and industry model, the ability to meet with and learn from customers directly can now be shared among both dealers and manufacturers. It’s less of a dealer monopoly and more of a democracy among all who seek to serve customers.

Three Considerations for Long-Term Success

For a customer-centric model to build long-term success, the following considerations should be kept in mind.

  1. Be everything to someone: Those who meet customer needs become necessary. Those who do not become commoditized. When your products are so important to customers that they can’t live without them, they’ll seek them out despite higher prices or other differences. If your products are indistinguishable from others in the market, they will seek the lowest price. A closer match between customer needs and product features, including unique features that set your product apart, are the key to long-term competitive advantages and financial success.
  2. Relationships are changing: Manufacturers who are used to letting their dealers handle customer service will be left behind as technology changes how people communicate. Direct access to the creators, inventors, and product engineers will be something customers will demand. Dealers may continue to be important but true customer-centric businesses both welcome and value direct customer input.
  3. Customer service as a competitive advantage: Customer service can act as a competitive advantage in a customer-centric business model. The better the service, the more customers will return to your company. Manufacturers today may not be equipped to interact with customers directly as they shift from product-centered manufacturing to customer-centric manufacturing. But paying attention to service will set you up for long-term success in this new business environment.

The manufacturing industry has gone through many great upheavals over the years and weathered them all. We will always need manufacturers to produce vital parts and goods. Now, however, those manufacturers likely to success in the future are those willing to meet the customer halfway, listen, and respond accordingly. The customer, it seems, is always king in any business - including manufacturing.

BAASS Business Solutions

BAASS Business Solutions partners with clients to help them improve efficiencies for greater profitability. We do this by matching business software solutions to your business needs. The results offer powerful productivity enhancement, time and money-saving results, better data and more. For more information, please contact us.

 

About The Author

Jenny is a professional Project Manager, Sage X3 and Sage ERP Certified Consultant with BAASS with over 15 years of extensive experience in ERP solutions for business. She has a Bachelor of Commerce degree from the “State Finance Academy” in Moscow, Russia and her certifications and qualifications include; Sage ERP X3, Sage ERP 300, Business Intelligence, Project and Job Costing, HRMS, CRM, Technisoft, Service Manager, Crystal Report Designer, Microsoft Access & Microsoft Project and SQL Query.