What is Operational Excellence? A Guide for Modern Brands
In today's fast-paced and hyper-competitive business environment, many modern brands place significant emphasis on marketing, branding, and customer experience. While these aspects are undoubtedly crucial for success, investing in operational excellence often takes a backseat.
In this blog post, we will explore the importance of prioritizing operational excellence for modern brands that are typically more marketing and brand-forward. Here are the key areas of consideration for how to achieve operational excellence:
- Defining Operational Excellence for Brands
- Enhancing Customer Satisfaction and Loyalty
- Adapting to Market Changes
- Cost Efficiency
- Building a Resilient Brand
- Supporting Innovation
- Competitive Advantage
What is Operational Excellence?
Operational excellence is a philosophy that focuses on continually improving operations and processes within an organization. It involves streamlining workflows, reducing waste, enhancing efficiency, and consistently delivering high-quality products or services. Although it might not be as flashy as a captivating marketing campaign, operational excellence is the backbone that supports a brand's long-term success.
Enhancing Customer Satisfaction and Loyalty
Modern brands often invest heavily in building a strong brand identity and creating compelling marketing messages. However, to truly succeed, they must ensure that the customer experience aligns with these promises consistently. Operational excellence guarantees that every interaction a customer has with the brand, from browsing the website to receiving a product or service, meets or exceeds their expectations.
Operational excellence directly impacts customer satisfaction. Efficient processes result in quicker response times, on-time deliveries, and reduced errors, all of which contribute to happier customers. Satisfied customers are more likely to become loyal advocates for the brand, driving repeat business and referrals.
Just look at the stats. Forbes reports that:
- Companies with a customer experience mindset drive 4-8x higher revenue.
- 73% of companies with above-average customer experience perform better than competitors.
- 96% of customers say customer service is important in their choice of loyalty to a brand.
Adapting to Market Changes
The business landscape is constantly evolving. Brands that prioritize operational excellence are better equipped to adapt to changes quickly. Whether it's responding to shifts in consumer preferences, dealing with supply chain disruptions, or scaling up operations, a well-structured and efficient operational framework allows brands to navigate challenges more effectively.
There have been few more challenging times in recent history for supply chains than the COVID-19 pandemic. This put into focus the importance of operational excellence and having an infrastructure in place for operating smoothly and efficiently, even in the face of larger global economic events.
As the business landscape currently shifts at its most rapid pace, omnichannel brands face some of their most difficult challenges to keep up. How are you supposed to keep your ecommerce customers happy, while maintaining and growing your various retail sales channels?
The answer: companies who are embracing AI to automate for crucial processes and using software to improve functions like electronic data interchange (EDI) for their trade partners are the ones who are thriving.
Cost Efficiency
Effective operations management helps modern brands optimize their costs. Considerations here should be:
- Reducing waste
- Improving resource allocation
- Minimizing errors
These are key considerations for operational excellence that contribute to higher profitability as well as relationship building with retail partners. These cost savings can be reinvested in marketing, innovation, or further improving the customer experience.
Building a Resilient Brand
In today's world, where reputations can be built or destroyed in an instant, resilience is key. Brands that prioritize operational excellence are better equipped to weather crises, respond to customer complaints effectively, and recover from setbacks. A resilient brand can emerge from challenges stronger and more trusted than before.
This has so much to do with having the right people with a similar mindset on your team. If your team has a shared framework to deal with each type of setback you might run into for your given industry, then you're setting yourself up for success.
For example, if you have a certain type of return with a complaint from a customer, there should be a framework for how to deal with that issue, putting a premium on customer satisfaction to smooth over that event.
This should be true for all operational processes from supply chain dealings with trading partners to individual customers.
Supporting Innovation
Operational excellence doesn't stifle creativity; it enhances it. When operations run smoothly and efficiently, teams have more time and resources to focus on innovation and product development. A culture of operational excellence can foster a spirit of continuous improvement and experimentation.
Competitive Advantage
In a market saturated with brands vying for consumer attention, operational excellence can be a significant differentiator. Brands that consistently deliver high-quality products or services, on time, and with minimal hiccups stand out from the competition and can attract a loyal customer base.
Never Underestimate the Impact of Operational Excellence in Business
Modern brands that are predominantly marketing and brand-focused should not underestimate the critical role that operational excellence plays in their success. While branding and marketing create the initial allure, it's the operational backbone that sustains a brand's reputation, customer satisfaction, and long-term growth.
Investing in operational excellence is not an isolated effort; it's a continuous commitment to improving processes, fostering a culture of efficiency, and prioritizing customer satisfaction. In doing so, modern brands can elevate their success, build resilience, and stay ahead in an ever-changing business landscape.
