Marketing is a gaping hole in the collective skill set of many manufacturing companies. That’s natural. Manufacturing is about making things, not selling them. (The very word comes from Latin roots that mean “to make by hand.”) But the downside of putting all your energy on improving the manufacturing process – scrap rates, lead times, inventory turns and “the numbers” in general – is that a business can get too inwardly-focused, to the detriment of its long-term health. I call it “the efficiency trap.” And giving more attention to marketing is the way to avoid it.
Marketing is a lot more than coming up with slogans, brochures (and their online equivalents) and the right colors for the company web site. Marketing is about deciding what to make, targeting the right markets, and only then developing the right tools to support sales. In other words, marketing is as much about gathering information as it is about broadcasting information.
Unfortunately, most of what’s written about marketing is aimed at very large companies, and has little relevance for small-to-medium sized manufacturing businesses. AllBusiness is actually one of the best sources available for information about affordable marketing strategies for smaller companies, and I’ll be pointing out some of these internal resources over the next few weeks.
Today, however, we’re going to focus on deciding what to make.
In the mid-ninties I developed a process called “Elevator Marketing” to help companies understand what their core value to customers actually was, and how to communicate that value efficiently, e.g. in the length of time consumed by a short elevator ride. Part of this process included interviews to determine what I called “The Inside Story,” that is, the set of beliefs about the company’s strengths, weaknesses, ideal customers and so on held by key people inside the company. The next step was talking to people outside the company – customers, channel partners, business analysts, trade press editors, and sometimes potential investors – to understand “The Outside Story,” that is, the story believed by the rest of the world.
Guess what. The two never match. Never.
The first step in improving the marketing side of your business is figuring out what The “Outside story is for your company really is. You can’t get this from your sales force. It is very, very important to listen to the people in charge of sales, even if you’re sick of hearing how much better they could do if prices were lower. After all, sales people are your closest link to the outside world. But sales people are naturally biased, and they simply don’t get the full picture because customers won’t share it with them.
If you can, it’s worth hiring a research firm . Unfortunately, they’re not cheap, and are beyond the means of many small businesses. (Some web-based firms are emerging that can provide data at a somewhat lower cost than what was available a few years ago.)
The second best thing to do is carefully follow trade publications and industry web sites, which are relatively objective.
Doing nothing is not a smart option. The outside world has a huge impact on what you can profitably sell. Developing a clear picture of how the outside world thinks about your company and your industrial sector should be a part of the marketing department’s job.
Without reliable, objective information, you may end up being the world’s most efficient maker of cost-effective buggy whips.