Marin Software's official blog

How to Align Marketing Campaigns with Inventory and Operations

Katie Sullivan Porter
|
August 21, 2022

There's nothing worse than feeling like you're wasting perfectly good product in storage facilities because certain items in your inventory just don't seem to be selling. This is frustrating both for operations and marketing teams. Operations teams are facing supply chain issues, shipping headaches, storage fees, and more while they watch waning product take precious warehouse space that best selling items could occupy. 

Meanwhile the marketing team is pouring money into ads, thinking that more exposure will lead to more sales, while certain items cannot seem to get out the door quickly enough. Sometimes, no matter how many times you tweak a campaign, the results just aren't there. Too many companies suffer from the "left hand not speaking to the right" in regard to marketing and operational teams. If this sounds familiar, it might be time to take a closer look at your inventory management strategy and realign the effectiveness between operations and marketing. 

As Julie Durante, the Director of Inbound at Impulse Creative, said, “Operations must serve the customers that marketing helps attract. If marketing and ops aren’t in alignment, no one will be successful.”

What are the benefits of aligning operations and marketing roadmaps?

If your operations and marketing teams work side-by-side, you'll see great results. Making sure operations are aligned with what marketing is doing ensures a smooth workflow and you'll end up with more leads and revenue because of this close collaboration. Entering into a mutual agreement means you can share ideas, improve efficiency, and create the right environment for company growth. Here's a quick overview of the advantages of this approach.

  1. Avoid over-ordering products that aren’t selling well 

By reducing your exposure to products that aren’t moving, you can save money on advertising and inventory costs. By ordering just enough to meet consumer demand— no more and no less—you can avoid major losses. 

  1. Improve your company cash flow with inventory management

When an effective management strategy isn’t in place, you can tie up your money by purchasing large quantities of inventory all at once. With careful management, this can be avoided, resulting in improved cash flow that can be spent elsewhere when needed, like special marketing initiatives. 

  1. Improve your organization’s bottom line 

When you streamline processes, it impacts the rest of your business by increasing revenue growth and leading to more consistent profitability

  1. Benefit from a well-organized operations and marketing system 

Since you now have insight into exactly how much product you have, it makes it easier to determine the right products for upselling, cross-promotion, and bundling. An inventory that is well organized and well documented will also help save staff time and prevent errors, leading to tight shipping schedules and a greater overall customer experience, which is an important part of reputation management for the marketing team as well. If your inventory is properly organized, the rest of your supply chain will fall right into place.  

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3 Challenges of operations-marketing alignment

Obviously creating the kind of multi-team synergy we're describing takes time and effort. That’s why it's important to find the right balance between having autonomy amongst each team and finding the most opportune moments for both teams to work together. 

  1. Changing processes can be difficult to implement for larger businesses

Poor operational oversight and control can slow down fulfillment, and make errors more frequent. Some of the tactics we've mentioned, like engaging an inventory management tool, or reorganizing documentation processes, will make things much easier.

  1. It requires accurate and up-to-date communication

As with most things in business, communication is key. Constant, transparent communication between the marketing team and operations team is a vital part of achieving success. The idea is to encourage the free flow of information. Promote collaboration by giving everyone a chance to share their ideas and knowledge. Make sure that people can easily talk to one another in person or through conference tools, and help break barriers between departments.

  1. Assigning ownership and responsibility can get messy

Great teams work to understand the full range of what work is taking place and who owns what pieces of the puzzle. Who will take charge and make sure your teams function as well as they should? The answer lies in the question of ownership, not control. Establish early on the areas where one team will have to dictate the actions of another and vice versa, based on the greater good and big picture objectives of the company. 

If a shipping promotion marketing wants to run will ultimately cost the company too much, operations may have a veto in that area. But if a product bundle idea could potentially bring in a significant amount of additional revenue and it doesn’t add too much time in terms of labor or packaging, marketing may have the final vote in that scenario. 

At the end of the day, everyone is on the same team of reducing costs and increasing revenue for the company at large. Keep that singular focus in mind, have a spirit of teamwork from the top-down, and every situation will play out as smoothly as possible.

What role does inventory-based spend management play?

Inventory-based spend management is a way of making marketing and advertising budgeting decisions based on the product inventory you have available. 

By tracking and forecasting inventory levels and targeting your campaigns more specifically to the products you have in stock, you can increase your chances of making a sale. Surprisingly, 43% of small businesses don’t track their inventory—and 21% of companies overall say that they don’t have proper inventory management in place. Starting with a basic understanding of where things are now is paramount in order for all parties to move forward. To make a strategic sales approach based on inventory management successful you must get on top of existing inventory, the current marketing plan, and identify where those two componencts do not align in the big picture.

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How do we get started?

In this case, unlike other marketing tactics, the operations team takes the first step. Inventory-based spend management starts with a forecast and analysis of your product inventory. You'll need to take a close look at what products you have in stock, the expected rate of turnover, and any supply problems on the horizon. Without this kind of information, the "tail will be wagging the dog" as marketing continues to guess on which products to promote and feature.

Once that data is all in one place, you can start to make decisions about where to allocate your marketing budget both in the short-term and the long-term. If there’s a problem with supply for one item or category, you can shift your marketing strategy to other products. 

Thankfully, all of this can be done by implementing inventory software. With a good system in place, you can automate your strategy, optimize cash flow, successfully manage and control orders, oversee warehouses, reduce handling costs, and much more.

Inventory-based spend management techniques

There are predefined techniques to help you optimize inventory-based spend management. By choosing the techniques that work best for your business, you can maximize your budget and optimize your spend strategy. Here’s a look at just a few of them.

  1. Just-In-Time (JIT) inventory management

The goal of JIT is to have the minimum amount of inventory on hand to meet demand. That means you bring in inventory on an as-needed basis, rather than buying in large quantities. 

  1. ABC analysis

With this technique, goods are split into three categories, A, B, and C. Category A products represent your most valued goods—those that make a huge impact on your overall profit; Category B reflects products that fall somewhere in the middle of your most valued products and your least valued ones; Category C includes small transaction items that are critical to overall profit but don’t individually matter too much. 

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  1. Demand forecasting

Demand forecasting focuses on historical sales data to forecast customer demand. Companies use this type of forecasting as a rough estimate of the amount of goods they expect consumers to purchase in the future. 

Inventory-based spend management is crucial if you want to ensure your customers get the goods they want when they want them, but can also be a key tool to help you properly manage your marketing budget. 

Realizing the potential of inventory-based spend management

Inventory-based spend management is a great way to save money and get the most out of your marketing budget. By targeting your campaigns specifically to products you have in stock at a surplus and those that generate the best profits, you can avoid over-ordering products that aren't selling well and bounce back as a business when inventory levels are off. This approach can also help you make more sales by increasing your marketing focus on products that are in stock.

How MarinOne Can Help

Whether you’ve got a solid marketing and operations strategy in place already, or you’re looking to develop one, MarinOne can get you headed in the right direction.

MarinOne helps your marketing team see all of your ad spend data in one place, so you can make more informed decisions about where to allocate your marketing budget instead of watching your dollars go to waste. 

Paired with a great inventory management tool, you'll have effective multi-team visibility for both operations and marketing needs. Consult with one of our advertising experts to learn how you can successfully manage and optimize spend.

Want to know how inventory-based marketing can improve your budgeting and processes? Let us walk you through it with our comprehensive guide. 

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