Tuesday, January 4, 2011

The Power Has Shifted

I just finished reading “More consumer manufacturers selling online, competing with retailers” by Barry Shlachter. (Read more: http://www.star-telegram.com/2010/12/28/2731510/more-consumer-manufacturers-selling.html#ixzz1A72OsI1F) The article raises several good points about the shifting relationships between manufacturers and retailers. In my industry the same is true between manufacturers and distributors. The article states "The primary driver for all this is a more educated and informed shopper, who is getting more information through more channels," said Eric Best, CEO of Mercent, which offers online marketing technology and services. Best goes on to say "Manufacturers realize they can increase their margin, establish a more direct relationship with consumers and also be in a position where they're forced to reconcile the changing customer behavior with Facebook, Twitter and also mobile devices as points of engagement with their customers..."

I think the article missed the boat in focusing on who has the power – the manufacturer or the retailer. What is buried in the quote above is the obvious answer – neither. Now more than ever it is the customer. The internet has allowed our customers to source our products by whatever means they want.

Our customers now have the technology to interact with us as they want. They dictate the buying process. I get frustrated listening to circular arguments about who sold what to what customer. The bottom line is that the choice cannot really be controlled by either side anymore. The customer drives the choice. If we create barriers to purchase, getting information, engineering support, etc. the customer can find alternatives. The internet is full of businesses that make it easy to do business with them and are willing to play on the customer’s terms. And it is only a search term away on Google. And a computer is no longer even required; any smart phone can do this now as well. 

That is what I love about the explosion of social media. It is interactive. It is not really controllable, so you learn the good and the bad. You get feedback on a constant, real-time basis from your customers. It allows you one more channel for building relationships and providing the information and feedback channels in a method your customers want, need and may prefer.

Relationships between manufacturers and retailers/distributors need to focus on the customer, and servicing the customer’s needs. When that truly becomes the goal, it will be a win-win for all.

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