Small manufacturing businesses face their own special set of marketing challenges. In this post we cover the four key challenges and suggest some potential solutions.
Not Products But Commodities
Increasingly a problem for a wide range of businesses. I am not quite sure if it is a function of how society in general now functions, a general more competitive environment or hard times in manufacturing resulting in a dog eat dog culture. Whatever the reason it is becoming harder to differentiate products and, as a result, charge a premium.
Manufacturing used to be immune to an extent from this phenomene but no more. Products are increasingly treated as commodities and therefore price alone is king.
Solution: The solution is in two parts. The first is to strive to introduce new products or services as rapidly as possible. It appears life cycles are shortening and therefore the time available to maximise returns is also reducing. As one product reaches maturity (and therefore commodity status) the next needs to be ready.
The second part is actually a key element of all that follows and that is marketing strategy. It is important to understand in intimate detail what it is the business actually delivers, who needs that product or service, why they need it and who else satisfies that need. This is the key to product differentiation.
Many smaller manufacturing businesses have a relatively small potential customer base. It is therefore essential to keep current customers and to maximise the value of those customers.
Research shows the prime reason customers leave is a service issue (including delivery) but the second most common reason is perhaps a surprise. It is not price but is a perception that the customer is not valued by the supplier.
Solution: keep touching and interacting with the customer. This is a challenge for sales and with the ongoing pressure to secure the next order it is perhaps not a surprise it is often neglected. The most efficient method is to deliver engaging and useful information (content) on a regular basis.
A robust customer feedback system that is designed to deliver a high response rate is key to identifying potential issues with existing customers and dealing with them before they become serious. It can also be a lead in (with happy customers) to securing valuable case studies to use to both extract more from customers and to help with securing new customers.
New Customers Acquisition
The old maxim it costs 5x more to acquire a new customer than it does to retain an existing one tends to hold true. Manufacturing businesses tend to allocate a significant amount of effort to new customer acquisition. Unfortunately much of that effort is often wasted by sales in unproductive meetings based on poor quality leads.
Solution: A well thought out strategy (see above) and appropriate targeting can certainly help. However, the main issue is the game has changed and prospects are much more likely to search for the information they need to make a buying decision (pull) than they ever were in the past. The old push type marketing based on telemarketing, appointment setting, advertising and Emails based on sales copy alone is less and less effective. The process should be identify decision makers, reach out to them with appropriate content or use content to draw them in.
Ad Hoc Approach To Marketing
Without a strategy and a clear understanding of the customer and how to reach them it is all too easy to jump from one marketing activity to the next. To make a success of marketing requires both time and a consistent approach. Falling for the hype about the latest and greatest and marketing technique generally leads to disappointment.
Solution – It takes courage to see it through but what is needed is a marketing process built around the most appropriate marketing techniques. A process that can be measured and optimised to deliver the best approach.
To succeed a solid strategy and marketing process are key. It is also essential to embrace inbound marketing and use valuable and engaging information (content) to fuel the process.