Five months ago I wrote a column about evolving aftermarket dynamics and how they are mandating changes in the way we market our products. I didn’t realize at the outset that this simple observation would end up taking five installments of this column to articulate its salient points, but that has been the result.
Along the way I came to refer to the "new" approach as Next Generation Marketing (NGM). NGM is all about the adoption of, and dedication to, five marketing principles. One of them, focus on the customer, is as old as marketing itself. The other four are more topical: collaboration, zero-based, technology-enabled and fact-based. We defined and explored each of these, and I promised that last month would be the final installment on this matter.
However, I’ve become privy to a situation that so exemplifies the need for NGM that I can’t resist finishing the series with it. I believe it underscores why this change of approach is critical to everyone in the supply chain.
A friend of mine is the head of marketing for a product line that is SKU intensive (thousands of part numbers). He is in the throws of a line review with one of his major resellers. The reseller is insisting on several product consolidations to reduce the number of SKUs they have to carry. My friend and I have talked about NGM and he doesn’t feel good about his channel partner’s direction on the consolidations. He feels his engineers are already making the types of consolidations customers will accept, and he’s reluctant to go any further.
But the request has escalated to a demand, and now to a threat. He’s being told that his competitor is willing to make the consolidations. To make things worse, he has checked with his other major channel partners on the proposed consolidations. They all are opposed to it, albeit with varying degrees of adamancy. What should he do?
The foundation of NGM is about getting outside of yourself and looking at the marketplace from the perspective of others. That means manufacturers viewing market conditions from the distributor’s perspective and vice versa. It means both manufacturers and distributors looking at the market through the store’s eyes. But most of all, it means everyone in the supply chain viewing everything from the perspective of the person who throws away the box. Executing this empathetic strategy ultimately leads to everyone in the supply chain making the “right” decision. It is collaborative, customer-centric and fact-based.
So back to my friend. Fortunately he is a practitioner of NGM. He went to his data sources and created a compelling presentation for his insistent channel partner. He had fact-based information that clearly documented the concern of technicians about overconsolidation and how it has led to compromised performance and less than desirable fit in a variety of instances. He could further demonstrate how, in certain product segments where consolidation had been particularly aggressive, technicians turned away from aftermarket sources in favor of OE parts providers. He was able to convince them that a small gain in working capital is not worth losing the business or confidence of professional installers.
Hopefully you can see why I felt the need to conclude my discourse on NGM with this story. The concept of consolidating products to cover multiple applications was all the rage in the aftermarket for several years because it was good for suppliers and distributors. Then something happened. The customer spoke and said, “No—we’re not accepting this anymore.” It took some companies a long time to recognize that and even longer to respond.
Others learned more quickly and got ahead of the curve by applying the tenants of NGM: A) Use well gathered facts to guide and help make intelligent decisions about anything that affects the person who throws away the box; B) Work in tandem with other members of the supply chain to address customers’ needs. Or I guess you could just a snappy new brochure and see what happens.
