Profitable Growth: Improving Marketing & Sales Results

In today’s environment of economic uncertainty, one of the most important actions you can take for your core business is to develop profitable marketing and sales strategies.  During the past month I have written about the benefits of stabilizing your core business profitability while simultaneously planning for future growth.  Last week I discussed the Power of a Growth Vision.  Today I will share some ideas with you on how to take a next step with planning profitable marketing and sales strategies. 

Think about it for a minute, what are your options to improve the performance of your marketing and sales team?

• The old “line ‘em up and beat ‘em approach” is an option, which unfortunately rarely works and usually leads to continual churning of sales staff but is still widely employed by many manufacturing firms of all sizes
• Rely on the “hunt & peck” approach and hope to get lucky
• Focus on finding new customers with the same characteristics as your current Most Valuable Customers

If you believe that the definition of insanity is “doing the same things over and over and expecting different results”, then perhaps it’s time to try a few new tactics to find profitable new customers.

Assuming you and your sales team have gone through the exercises I discussed in previous weeks, you now have some basic understanding of who your most valuable customers really are.  Ideally you generated an analysis of all of your customers for the last three years that resulted in something like the following table:

The next step from this analysis is to select your truly best customers and identify specific information on the primary market segments they serve, which would look something like the next table.  Ask your team to identify your ten best customers and start by focusing only on them with this analysis.

Go through this second step for only those top ten customers that are ranked #1 (Best) in Margin and Hassle (true cost of selling), and for those with a positive potential the result will be a short list of potential Most Valuable Markets.  Using this data, you can develop a very effective market and sales strategy aimed at finding more profitable customers that your matches up with well.  Following are some techniques that I’d suggest you try.

• Industry / Markets Served (NAICS codes)
• Size
• Geographic Location
• Ownership Structure (family owned, privately held, affiliate of Berkshire, US corporation, etc)
• Buying Process (direct to senior execs, via purchasing department, to engineering, etc)
• Anything else pertinent

Next, identify the primary NAICS codes that describe each of your top ten customers.  Find a local marketing firm that will sell you a list of all of the companies with the specific NAICS codes of your best customers in your primary geographic service area.  One of the best sources for this information is through D&B’s Marketplace database.  Make sure you have as much information as possible in this list to identify size, location of plants, websites, etc.  Now go though the list and cross the obvious ones off that don’t meet your Ideal Customer Profile.  The next step is to drill down in the list until you begin to develop a target customer list for your marketing and sales team to begin a prospecting campaign.

We’ll talk more about Profitable Growth next week.

Charlie Alter owns Bentbrook Advisors LLC based in Sylvania, OH - he specializes in Growth Strategy Consulting & Executive Coaching, Charlie can be reached at calter@me.com