This originally appeared as a guest post written for the Mass Manufacturing Extension Partnership monthly newsletter in October. The original article can be found here.
The Manufacturing Advancement Center, Next Generation Manufacturer blog provides "Insights, best practices, how to's, and success stories from manufacturing organizations in New England."
Identifying, Acknowledging, & Overcoming the Fundamental Dissonance Between Top Line and Bottom Line, Part 2
Last month we explored an often unrecognized challenge facing advanced manufacturers. In short, while extensive management science and tremendous energy have been invested in reengineering manufacturing and operations, business development remains largely unchanged. The cutting edge operations and bottom-line focus that are common among today's advanced manufacturers simply aren't matched by an analogous top-line revenue generation engine. This month it's time for an actionable solution!
B2B procurement today is a process of buying - But companies retain a sales based strategy
Your direct sales team is probably the core of your business growth strategy. Traditionally sales reps controlled the information that buyers needed in order to purchase. Transactions couldn't occur without a rep - and that put them in a position to apply their skills. Differences in success distinguished great reps from average.
That fulcrum role of direct sales reps led to an organizational approach, including staffing and resource allocation, which typically has a small ‘marketing' department and a larger sales department. Budgets for marketing are often built around traditional advertising and trade show activities - and their role remains similarly traditional. Market is expected to generate leads for the direct sales team to chase. The sales budget is generally much larger and viewed as a cost of sales rather than an expense.
But along the way, the internet rectified the asynchronous access to information which previously empowered the sales rep. And with that change, B2B procurement has evolved from a process of selling to a process of buying.
Today:
- prospects control the buying process
- >90% of B2B purchases originate with an internet search
- buyers are >70% through their buying process before they want to talk to reps
- buyers diagnose their problems, research solutions, educate themselves, and sell solutions internally based on material they find on the internet
So your online presence is no longer simply about credibility. Rather it's about participating in the 90% of the deals that start with a search. It's about a virtual sales effort that gradually engages with prospects until they are ready to talk to reps. In other words, today most of the sales process occurs before your reps are involved - even before they are aware a prospect is looking.
In reality, therefore, the marketing department is now responsible for much of sales (we'll explain below how they can support that requirement) although in practice it remains secondary to ‘sales.' Great reps (intelligent, creative, business savvy) remain a critical part of the business growth plan - but they serve a different role.
Just as inefficient manufacturing created a quality and cost crisis, this evolution potentially creates a similar organizational crisis. Egos, budgets, staffing and other lightning rods for professional conflict are exposed. Whether in a bid to avoid internal conflict and disruption or because they haven't yet recognized the shift, most companies haven't fundamentally changed the way they market and sell.
Strategy and Not Just Tactics
But there have been some efforts! Sensing this evolution in buying habits you might have invested in initiatives like SEO and social media that were supposed to help - but likely with no measurable ROI. And that, combined with healthy skepticism toward marketing which always overpromised and underdelivered (and could never validate an ROI) perhaps biased you against digital tools which are available now.
Just as LEAN is an ongoing process rather than some isolated tactical applications of methods, effective business development demands a synthesis of tactics applied together according to a formula specifically designed around your product, your markets, your buyers and your preferences. There is no quick fix - and dropping a tool in here or there almost always leads to mediocre results and frustration.
Content marketing, for example, is an integrated approach, incorporating a number of tactics, which offers a range of benefits to advanced manufacturers when incorporated into an overall integrated sales and marketing strategy (including traditional channels such as trade shows, journal advertising, etc.). These include:
- lower cost/lead
- an effective virtual sales forum
- ability to attract more qualified prospects (including many from rapidly growing international markets)
- lead management and automatic nurturing for prospects not yet ready to talk to a rep but likely to qualify as they move through their buying process (leverage technology to give prospects exactly what they want/need efficiently without increasing payroll)
- measurable ROI with manageable KPIs to guide the effort (just like in your operations)
- industry recognition as a thought leader (e.g. brand value growth)
Measurable, Manageable Outcomes
Paradoxically while the marketing & sales approach appropriate for today's markets often feels uncomfortable, as manufacturing executives learn more about it they develop a new affinity for marketing. Not only will visitors, prospects, leads and buyers respond favorably, but suddenly the metrics, KPIs and ROI by which you manage operations can also be applied to business development. Imagine that! A marketing investment (rather than simple cost) which can be clearly tied to resulting revenue. How often have you wished for that?
Applying process excellence to your business development carries longer-term benefits as well. In addition to simple revenue and profit growth, other benefits include:
- Increasing consistency and predictability even as buying cycles become more unpredictable and competition intensifies
- Greater insight into ROI which allows execs to plan and manage business development with confidence
- Growth in enterprise valuation - every company has an ownership transition in its future!
- Critical insight into international markets with strong demand allows companies to develop export sales surgically rather than through expensive and risky unfocused initiatives
Manage Your Business from Top to Bottom
You're comfortable managing manufacturing operations because they just make sense. Write the formula correctly, apply the correct processes, manage the inputs and things work the way they're supposed to. Marketing & sales never quite fit that mold - and today even less so.
But just as systems like LEAN changed the manufacturing world, and companies' bottom lines, now sophisticated, measurable approaches to marketing and sales enable analogous management of the top line - leading to consistent, predictable, profitable revenue growth.
Business development success requires tapping the right expertise, making a persistent commitment and committing adequate resources. And success is within the grasp of advanced manufacturing companies which have great stories to tell and who deliver significant impact and value to their customers.
And success means more than just revenue growth - greater business resilience and consistent growth, and even increased enterprise valuation reward those who meet the challenge.
Want to learn more about how to apply this approach to your business? Download our free eBook "Manufacturing Revenue Growth."
