Who doesn’t want to improve their business performance? There is an innovative, very effective way to meet this one objective every business owner has: Upstream marketing.
When executed well, upstream marketing:
- Delivers substantial new revenue and profit streams that extend far beyond the core business
- Opens up uncontested “white space” market opportunities, making competition irrelevant
After adopting upstream marketing principles and practices, companies tend to look very different than they did in their early stages. The playing field—the customers they serve and the products they deliver—expand significantly.
The following world-famous companies provide excellent examples:
Apple, One of the Most Recognizable Brands
Imagine if Apple had defined its business in product terms only—as a manufacturer of desktop computers. Where would they be today?! It would have completely missed out on the impressive revenue streams associated with the iPod, iPhone, iPad, Apple Watch, Apple TV, and its array of services such as Apple Arcade, Apple Music, TV+, News+, and Card. Today, the combined value of these newer businesses far exceeds that of the original desktop computer portfolio.
Amazon, the World’s Biggest Retailer
Similarly, what if Amazon had remained an online retailer of books only? It’s now the world’s largest retailer, supplemented by product sales from Kindle, Echo, and a host of other businesses, including self- publishing, groceries, home automation, delivery services, and robotics. Alexa, Amazon Prime, Amazon Music, and Amazon Studios envelop consumers each day.
Amazon Web Services (AWS) represents an entirely new business-to-business proposition that contributes significantly to the company’s bottom line. Other mega-industries Amazon has its eye on include pharmaceuticals, health care, and financial services…and the list is ever-growing.
Disney, the World’s Largest Media Company
Way back, Disney got its start in animation. Today, it is the largest media company in the world. Studio Entertainment—consisting of all films released by Walt Disney Pictures, Walt Disney Animation Studios, Pixar, Marvel Studios, Lucasfilm, 20th Century Studios, and others—accounts for only 15 percent of total company revenues.
The majority of sales and profits comes from its other businesses. Within a year after launching Disney+ in 2019, the company restructured its organization around it to ramp up its direct-to-consumer strategy.
Innovation is Essential for Business Growth
These examples may seem obvious. After all, it’s hard to imagine Apple, Amazon, or Disney not being as expansive as they are today.
Yet most companies do what they’ve been doing from inception.
It’s a top reason why many small businesses remain small businesses. Though not for lack of trying.
84% of global executives see innovation as extremely important to their growth strategies, according to a study by McKinsey & Company. But a staggering 94% are dissatisfied with their organization’s innovation performance.
If Business Innovation is Key, Why the Disconnect?
Many companies employ upstream marketing principles in their early stages (perhaps subconsciously). Over time, they lose perspective. When launched, they consider choices like to whom, for what, how to win, and other strategic decisions.
Then the day-to-day firefighting often takes over. Along the way, marketing shifts from strategic to tactical. Instead of working on the business, execs find themselves working in the business. Maybe you can relate to that all-too-familiar scenario.
Despite its proven importance to business success, many business leaders are unfamiliar with upstream marketing. Why is it so neglected? Why do so many companies focus downstream and under-value upstream marketing?
To explore the topic of upstream marketing more deeply – and how it can improve your business performance – we are offering a free download of our book Upstream Marketing. It will change the way you think about marketing. Access it here.
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