Profitable Growth Is Everyone's Business by Ram Charan

Author:Ram Charan
Language: eng
Format: epub
ISBN: 9781400053711
Publisher: The Crown Publishing Group
Published: 2004-01-19T16:00:00+00:00

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Pinpointing Opportunities for Profitable Revenue Growth Through Upstream Marketing

THE CRITICAL FOUNDATION for revenue growth is upstream marketing. It is the ability to create or pinpoint the specific needs of chosen customer segments and satisfy them on a profitable basis better than the competition. Upstream marketing not only helps create profitable revenue growth—it is also a competitive differentiator that creates long-term value for both customer and company.

Most business leaders neither focus on upstream marketing on a regular, consistent basis nor give it the appropriate importance and requisite quality of resources. When people in business think about marketing, it is usually in terms of what I call downstream: brand-building, promotion, and advertising; timely delivery of goods and provision of customer service; and customer relationship management. Obviously, all of these downstream marketing activities are important, but they are dependent on the quality of upstream marketing, where you determine, with granularity, exactly who your customers are and exactly what products and services you can create that will solve their specific needs. Once you figure out who you want to sell to and what you want to sell to them—and it is not as easy as it sounds—then you can start to put in place your downstream marketing program, the advertising, brand-building, and public relations intended to get the customers you have targeted to buy. The downstream marketing program then increases demand.

Jeff Immelt at General Electric, A.G. Lafley at Procter & Gamble, Reuben Mark at Colgate-Palmolive, Dick Harrington at Thomson Corporation, and Andrea Jung at Avon are examples of people who have placed upstream marketing at the center of the behavior of their respective organizations.

There has, for example, been a very perceptible shift at General Electric from the time of Jack Welch, where a major focus was on improved productivity through programs such as Six Sigma and digitization. While chairman and CEO Jeff Immelt is retaining and intensifying this focus, he has made organic growth and bolt-on acquisitions his number-one priority, explicitly putting in place the skills and behavior of upstream marketing in each of the company’s businesses. Immelt has programs designed to help GE customers spot new opportunities, figuring correctly that if they grow, GE will as well. The general concept for this customer-centric orientation is “At the Customer, For the Customer” or ACFC. This is not just another slogan for wringing more sales out of customers. Instead, it is a total reorientation of how both the GE sales force and GE technical people interact with a customer to help the customer prosper. It requires the GE technology and sales team to link into the social and decision-making processes of its customers.

GE Plastics, for example, is a major player in an industry undergoing significant structural change. Competition in plastics has intensified, especially low-cost competition from China. There is excess capacity (too many producers facing too few customers) in the industry, and prices are dropping like a rock. GE Plastics has unmatched technology depth and a skill base of converting technology in applications specific to the needs of its individual customers.

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