Manufacturing Business Growth: More Effective Marketing Messages

I wrote in my last article about how Bill Testa's data on Current Developments in Manufacturing Activity contain a seed of hope for manufacturers looking for profitable top line growth. This article discusses the second and third steps that I believe Greater ChicagoLand's 12,500 small and medium sized manufacturers must immediately take to profitably sell their average 15% readily available capacity (and Bill Testa showed us that there's another 15% available on top of that).

Let's begin by accepting my earlier argument that manufacturers' marketing messages can rapidly and greatly be improved to answer the basic question asked by potential customers in the target market, "what's in it for me?" What next? Research shows that marketing messages that clearly communicate a high overt numeric benefit advantage are three times more likely to be successful (38% chance) than those that communicate a low benefit (13% chance). Research also shows, however, that manufacturers double their odds of success when they communicate a real reason to believe that the overt benefit will be delivered. How can Joe's Tool and Die on the Southside of Chicago do that? Well, Joe has five basic choices; he can

• Tell the truth about the overt benefit advantages he delivers
• Cite testimonials
• Show the pedigree of his methods and materials
• Provide data or show a demonstration
• Offer a guarantee

Joe should never let a customer say "no" because they don't understand what he can do for them. Any one of the five approaches above can be used to create a belief in the customer's mind that Joe will deliver the specific overt numeric benefit advantage(s) he's promising. And Joe should focus his promises on one or two benefits.

If Joe wants higher profit margins, the research data speaks loud and clear as to where Joe should go: to new customers and new markets. This may seem counterintuitive, but in today's tough economy, it may be all too easy for Joe to aquiesce to an existing customer's request for "a little break on pricing". Joe's going to need a dramatic difference to win new customers and break into new markets; that may seem a daunting task, but the rewards are there. The research proves that when Joe offers a high dramatic difference in his real reason to believe that he'll deliver on his specific overt numeric benefit advantage, his odds of success go up to 53%.

New customers love news and hope. When Joe offers legal and newsworthy claims about being the "first" and the "only" manufacturer to offer specific numeric benefit advantages (backed up by real reasons to believe that he'll deliver), he's made the customer care about choosing him.

Chicago's small and medium sized manufacturers looking for rapid and profitable top line growth can get there with a focused effort on creating more effective marketing messages that give their sales force (whatever that may be) the tools and motivation to get out in the field with increased hope and confidence.

Alistair Stewart

Manufacturing prophet with a passion for Manufacturing Profits

Manufacturing Business Growth: is there any hope?

Last Tuesday, Bill Testa (Vice President and Economic Advisor at the Federal Reserve Bank of Chicago) showed some interesting data on Current Developments in Manufacturing Activity at the annual meeting of Chicago Manufacturing Center's Board of Directors. In all the doom-and-gloom numbers was one interesting and unheralded number that speaks to the opportunity for manufacturing profits for Greater ChicagoLand's 12,500 small and medium sized manufacturers.

Bill's data showed that all manufacturing capacity is at 70% untilization. Knock out the sectoral peaks and valleys (petroleum and coal products sector at 88%, and iron and steel at 41%), and what are the implications? Well, let's assume that when a manufacturer is at 85% or higher capacity utilization, the company faces profitable growth challenges that require the application of Lean, Theory of Constraints, and other continuous improvement approaches to overcome.

There's about 15% of capacity available (on average, in sectors that matter in Chicago) for instant exploitation, which when sold right, creates gross margins that pretty much all fall to the bottom line as pure profit, or EBITDA. The sales guys will immediately cry that they need marketing support to sell that capacity, and that's true (but it isn't all they need). Do your own math, but anyway you run the numbers, you're going to come up with some nice EBITDA growth.

What should small and medium-sized manufacturers do first and right away to make money from that 15% available capacity? Industrial manufacturers have relatively modest marketing skills, so why not make an intense, highly focused, effort to create more effective marketing messages, and reinvigorate the sales guys with new hope and confidence? How many industrial manufacturers have marketing messages that clearly explain what's in it for the customer by choosing to buy their products? Very few. Time after time I see Chicago Manufacturers' expensive websites, catalogs, glossy trifolds and all manner of other marketing collateral pieces that are all about feeds, speeds, specifications, technical data, and features, all presented in visually unappealing, dense and hard-to-read tables, charts, and graphs. Almost none of them tell me what customer problem they're solving, and how much customer value is created.

Chicago Manufacturing Center's first call to action for the small and medium-sized manufacturers in ChicagoLand who seek top line growth and higher profits in the hardest economic outlook we'll ever see? Spend the next ten work days improving your marketing message to answer the most basic customer question: "What's in it for me?" If you're a ChicagoLand manufacturer, create customer pull by specifying the numeric benefit advantage received, enjoyed and experienced when customers purchase your products.

Here are some ideas to stimulate your thinking about how to do that:

• translate your equipment's feeds and speeds into $$$ value for your customers (their profitable output per hour, their shorter lead times, their improved on-time delivery performance - everything your equipment will do to put money in your customer's pocket)
• convert the tolerances held by the capital equipment you make into the $$$ value received by customers when their scrap or rework is reduced or eliminated when they use your equipment
• turn your exotic alloy specifications into the $$$ value created by increasing the planned service intervals after your product is installed at the customer.

Next time I'll talk about the two other marketing message questions any manufacturer seeking to profitably grow their top line must answer - before their competition does.

Alistair Stewart
Manufacturing prophet with a passion for Manufacturing Profits