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Why Defense Contractors Should Avoid Marketing on Just Product and Price

Defense contractors who focus on their impact on customer success can significantly improve their profitability, revenue, and relationship growth.

41916187_bd6261981c_z.jpgphoto credit: Lordcolus via photo pin cc


When asked to describe what they do, most defense contractors will tell you that they provide a product or service at the lowest possible price.

But companies that focus exclusively on product and price are doing the bare minimum to survive.

Defense contractors that want to move beyond the price wars of providing a commodity at the lowest price need to rethink their mission and strategy. Specifically, defense contractors need to focus on how they can help their customers thrive.

Following just two metrics can help defense contractors move beyond competing on price:

  1. Customer Engagement
  2. Customer Impact

In a Gallup study of B2B companies, those two metrics were analyzed. The study showed that companies with higher level of customer engagement enjoyed at "23% premium over average customers in terms of share of wallet, profitability, revenue and relationship growth."

Gallup defines customer engagement as:

...an emotional connection based on Confidence, Integrity, Pride, and Passion.

According to the study, while the idea of customer engagement seems obvious, very few companies are measuring it. Additionally, the Gallup study found that only 13% of customers are fully engaged.

Gallup defines customer impact as:

...providing a meaningful change in a customer's business (or business processes) that significantly improves the customer's bottom line. It means helping a customer be more successful by doing business with your company than it could be by doing business with any other organization.

Companies that focus on customer engagement and impact can move from "price" to "advice."

In order to measure their impact on customers, companies must:

  • Know the customer's business
  • Bring the customer new ideas
  • Make the ideas work for the customer by tailoring them to their business situation

For defense contractors to implement this approach the following steps are necessary:

  1. Articulate what makes you different from your competitors, and then reinforce that difference at every customer touchpoint.
  2. Talk to your most important customers. Ask what their most important goals are and then find a way to help solve their problems and meet their needs.

Click here to read "Creating Impact in B2B Relationships."

The Principal and Founder of Artillery, Douglas Burdett is a former artillery officer and Madison Avenue ad man. He also hosts The Marketing Book Podcast, where he interviews authors every week about the latest in modern marketing and sales.

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