Consumer Strategy IS Business Strategy, Part I

In today’s highly competitive market, businesses are constantly seeking ways to differentiate themselves and drive growth. Yet, despite the clear advantages of a consumer-centric approach, many companies still treat consumer focus as a secondary consideration, often relegating it to the marketing department or customer service teams. This oversight is a critical mistake. To truly succeed and build a sustainable competitive edge, companies must embed consumer strategy at the core of their overall business strategy. By doing so, they can ensure that every decision, from product development to customer interactions, is aligned with the true needs and desires of their consumers.

This two-part article explores (1) why integrating consumer strategy into the heart of your business strategy is not just beneficial, but essential for long-term success and (2) what it looks like.

The Gap in Strategy

It is rare to encounter a business strategy that genuinely revolves around the consumer. Many strategies mention the consumer or acknowledge the need to focus more on consumer needs, but these acknowledgments often lack substance and specificity.  Instead, strategies are often based around market and technological developments, regardless of their relevance to the company’s existing or desired consumer base.

Yes, there may be purely operational decisions such as supply chain improvements for margin enhancement, company acquisitions for creating back-of-house economies of scale, or financial investments to weather forex, real estate, or market conditions.

But for the rest?  How can you define what you need to do if you am unsure as to why you are doing it and the impact it will have? 

The Consumer Is Your Common Denominator

Markets don’t buy products, consumers do.

The consumer is the common denominator in everything about a business.  Communications are pointless if they don't reach and engage the right people. Your products are irrelevant if no one wants them or if they are inaccessible. Retail efforts are wasted if they don't convert shoppers into buyers. Even clienteling and service efforts are futile if they don't foster loyalty and increase lifetime value by bringing consumers back for more.

Simply put - you can't have commerce without a consumer. But commerce can exist without your brand if it doesn't meet some consumer’s needs and preferences.

When you look at it this way, it makes sense that every aspect of your business should be built around your relationship to your consumer. And your strategy should naturally follow suit.

The Repercussions of Leaving the Consumer Out

When companies fail to be specific about what they want to achieve for their consumers, they wind up chasing markets in their search to be all things to all people, appeal to the wrong people, or work on the wrong areas. 

A scattergun approach not only dilutes brand identity but also confuses and alienates consumers.  What’s more, unclear priorities and direction can create internal competition.

Externally, this results in poor engagement, challenging conversions, and a loss of competitive advantage where previously present.  While internally, it demoralizes employees and creates inefficiencies.

A Lack of Clarity

When done correctly, putting the consumer at the core of your business strategy brings unparalleled clarity to your organization. Everyone, from top management to frontline employees, knows exactly what they need to do to achieve the stated goals. Each department understands its role in serving the consumer and how its efforts contribute to the overall strategy. This clarity ensures that there is no ambiguity about priorities, making it easier to make decisions and take actions that drive the business forward. 

Without it, the opposite becomes true, resulting in unclear or misguided goals and measurement that don’t deliver as expected.

The Wrong Metrics

We all know that we need to, “Keep our eyes on the prize.”  But what happens when we are looking at the wrong prize? Metrics like social media followers or website traffic might seem important, but if they don't translate to meaningful engagement or sales, they don’t make sense.

When a business strategy is not explicitly built around specific, meaningful consumer goals, the organization often ends up tracking the wrong metrics. These misaligned metrics can mislead the company about its actual performance and areas of improvement.  Or worse, they can steer the company in unproductive or even damaging directions.

Goals related to market expansion can also be misguided. A company may aim to capture a broader market without realizing that its core strength lies in serving a specific niche. This broad approach can dilute the brand's impact, alienate its most loyal customers, and stretch resources too thin, making it difficult to achieve meaningful market penetration.

The Wrong Expectations

Misalignment in strategy leads to misaligned goals and forecasts.

The growth and profitability from focusing on customer acquisition are different from those of retention. One consumer group might be easier to expand than another, which could mean the difference between 1% and 10% growth. This disparity is significant for any company and can result in poorly allocated resources, under or over-investing in specific areas, frustrated employees due to constantly shifting priorities, and the perpetual need for new, tactical actions to boost short-term performance.

Internally, setting goals that are not aligned with consumer needs can lead to employee frustration and confusion. For instance, if sales targets are set without considering the actual buying behaviors of the target consumer, sales teams might employ aggressive tactics that turn customers away rather than foster loyalty. Similarly, product development goals that do not reflect consumer feedback can result in offerings that fail to meet market expectations.

Poor Investment

Many companies mistakenly believe that their problems require big-money investments, groundbreaking innovations, or major overhauls.  For example, integrating a state-of-the-art CRM platform might be seen as a way to become consumer centric and drive sales. However, without clarity on how the platform will be used—whether for clienteling, email marketing, or consumer segmentation—the investment can fall flat.

Ultimately, misaligned goals can lead to poorly allocated resources, under or over-investing in specific areas, and a constant need for new, tactical actions to boost short-term performance. This reactive approach is unsustainable and detracts from building a stable, consumer-centric business.

Aligning your business strategy with clear, consumer-centric goals ensures that metrics are meaningful and goals are achievable. This alignment helps the entire organization work towards common objectives, driving both short-term performance and long-term growth.

Misalignment

Clarity naturally leads to alignment. When everyone knows what needs to be done, their efforts align seamlessly, both internally and externally. Internally, teams work towards common goals without conflicting priorities or actions. Externally, the consumer experiences a cohesive and consistent brand journey across all touchpoints.

Without it, it is impossible to create the virtuous cycle that further reinforces the clarity that leads to continued and even greater alignment.  Instead of heading in the direction of sustained growth and profitability, businesses risk performance driven by a serendipitous yet fleeting alignment of market trends and your offer.

The Solution

The true solution to aligning business strategy with consumer needs is simple, cost-effective, and time-tested. It requires a commitment of time and focus, rather than large financial investments or groundbreaking innovations. Our straightforward approach yields long-term results that are sustainable and impactful.

Check back for Part II for details on how to put the consumer in your strategy.