It’s our contention that one of the reasons Marketing leaders are having trouble proving Marketing’s value and are seeing their budgets pulled back is because they are now too focused on downstream Marketing at the expense of upstream Marketing.
The realm of upstream Marketing is effective growth. The realm of downstream Marketing is effective leads. The former requires a different set of strategy skills. Effective upstream Marketing makes downstream Marketing so much easier and cost-effective.
In his book “Profitable Growth is Everyone’s Business,” Dr. Ram Chara, who has taught at Boston University, Northwestern University and Harvard’s Business School, explains the difference between upstream and downstream Marketing.
Upstream Marketing, Dr. Chara says, refers to “the strategic process of identifying and fulfilling customer needs.” He posits that developing clear customer segments along with analyzing how the customer uses the product or service and what competitive advantage will be required to acquire the customer is the focus of upstream Marketing.
Dr. Chara defines downstream Marketing as efforts, such as advertising, promotion, brand building, and other forms of communication and engagement such as PR, events, and content. He proposes that the purpose of these efforts is to motivate customers to adapt existing products and services.
The Marketing Before You Put Your Line in the Water
In our first book, “Gone Fishin’: A Guide to Finding, Hooking, Keeping and Growing Profitable Customers,” published in 2001, we used fishing as a metaphor to explore this process. Upstream is what marketers need to do before they put their line in the water.
That includes everything, from deciding which fish to fish for, what method is needed (net or line), where to fish (river, lake or ocean), and when to fish, to what bait to use. These are essential decisions that you must make before you can lure a fish onto the hook, reel it in, and add it to your bucket (the downstream).
Perhaps this helps clarify the difference. Downstream Marketing supports your company’s value proposition. Upstream Marketing defines your company’s value proposition. Downstream Marketing delivers programs to support product adoption. Upstream Marketing directs the innovation process to ensure long-term sustainable growth. Clearly, you need both.
The upstream phase of Marketing has been overshadowed by the emphasis on the activities of Marketing (various content and website), touch points (i.e., email and events) and channels and the associated data and analytics. It is the ability to perform the upstream that gives Marketing the opportunity to join the conversation with the C-Suite. Upstream Marketing requires Marketing leaders to be businesspeople first and marketers second.
How did we end up giving more attention to the tail end of the process?
Let’s face it: upstream Marketing is hard work. And it is difficult to measure directly. It’s so much easier to measure visitors, shares, clicks, SEO rankings and contacts added to the pipeline. Upstream requires delving into a different level of data, gaining deep customer insights and competitive intelligence that requires investing in research, understanding the principles of segmentation, positioning and differentiation, and distilling this into a strategy and plan for growth that is aligned to the business. Upstream Marketing requires longer-term investment and a keen focus on performance management.
Downstream Marketing suits the world we operate in – sales NOW. It plays to the call for fast ROI. It is about speed and financial management. The downside is that without being grounded to the upstream, the downstream Marketing budget is always at risk.
If you’re only concerned about this month or this quarter or this fiscal year, then it might make sense to focus primarily on the downstream. If you’re looking for long-term organic growth that requires innovation, category ownership, customer lifetime value, and want to build a business that lasts, then you need to invest in the upstream.
10 Questions that Need to be Answered for Upstream Marketing
The waters upstream may feel more turbulent and murky, but it’s really where a foundational part of Marketing exists. Want to wade deeper in upstream Marketing? Start by addressing these 10 questions:
- What will our customer want next?
- How would we deliver what our customers want next?
- How will we convert this into a competitive advantage?
- Where is the market moving?
- How do we want to participate in these moves?
- What customers do we want next?
- Where will we find them?
- What will they value?
- What is our roadmap for developing future products that deliver this value?
- How will we bring these new products to the market?
Answers to these questions are vitally important because of the answers fuel growth. When it comes time to execute the plan derived from your upstream efforts, you’re going to need solid downstream skills.
Look Upstream to Find Growth in the Future
Upstream Marketing is a powerful tool that requires concentrated research into and analysis of your company’s customers and products. However, the payoff is far-reaching, if you’re willing to do the work. If you invest upstream, you’ll eventually see the results downstream as well.
