Do you ever wonder why your company just can't seem to grow the top line? Or, even worse, why you can't seem to stop the slow and steady decline in revenue. Your bottom line might be OK since you've cut your HR, Procurement, Marketing and any other so called 'expense' functions to the bone. Oh yeah, and you've beefed up your sales force and invested more in R&D, all to no avail. You're beginning to think adding those sales people was a mistake, and R&D can't seem to put out a product on time as you ponder the stagnation and steady decrease in the bottom line.
Sound familiar? To use a few old and tired cliche, maybe it's time to take a fresh look or think outside the box or take off the blinders.
I recently visited a manufacturing company here in Colorado struggling to stop a slow decline of revenue. I'll call them Acme to protect their identity. Acme is a private company with annual revenue of about $300 million dollars. Their management team desperately wants to grow the business, but they just don't know how to do it and they can't seem to understand that their buyer's behavior has changed dramatically.
I spent a week with them but only needed a few hours to see what was going on. Their problem is similar to many manufacturing companies. They don't understand how to go to market in the second decade of the 21st century. Their marketing machine is working like crazy as if they were stuck in the 90's when trade shows and pring ads were the main marketing tactic. They don't understand how to break through the noise and get the attention of their target audience. They make a me-too product and are perceived as a commodity by their customers and prospective customers. Even worse, they have no idea that this is the perception common to the people in their target audience.
The strange thing is that their main target audience, life science industries, is growing rather well compared to other manufacturing sectors. Their old style marketing function looks like this:
- A cost to the business
- A group of people in the back cubicles who manage the brand, create brochures, set up trade shows, send some emails, and do what the product and sales people tell them to do.
- No idea about their effectiveness of generating revenue, leads or opportunities. The CMO tells the CEO about clicks, views, likes, exposures, cost per this and cost per that, all useless information for the executive team.
- An old, poorly maintained database kept as an Excel spreadsheet.
- A one-way website which is nothing more than digital brochures and an e-store that sucks up more revenue than it brings in.
- Messaging is about product features. They have no understanding about positioning, value proposition or perceptions in the marketplace.
- They do whatever the sales or product people tell them to do without any thought, question, planned strategy or tactics. We call this ‘seat-of-the-pants’ or ‘ad-hoc’ marketing.
I promised the CEO that if they follow this advice about restructuring the marketing function and bringing in a leading marketer who understands how people buy, how to engage with the target audience and how to scale marketing activities with technology, they would be in double digit growth territory within 18 months.
They brought in a tech savvy, business savvy, 21st-century marketing savvy CMO and put him on the leadership team as a senior adviser. He brought in marketers who were able to operate modern marketing technology fully. They aligned the sales and marketing people under one leader with uniform goals and an aligned reward system. The new CMO immediately updated the fundamentals of positioning and messaging. The hardest part of the culture change was convincing the leadership team to stop pitching products and start educating their audience. Twelve months later their marketing department looked like a modern marketing function, and their revenue was ticking up to an 11% annualized rate.
Here's an overview of their Modern Marketing 2.0 team:
- They have a committed leadership team who is now looking at Marketing as a revenue generator and a revenue engine for the business.
- They have a written, dynamic and current marketing plan.
- The CMO and the Marketing function was embraced as a strategic partner providing high value in aligning modern marketing strategy, tools and teams to the business goals.
- They became metrics obsessed to ensure everyone knows what is working great, what works OK, what does not work and what has failed. They optimize and iterate for optimum spend and absolute growth.
- They have a high value, clean and comprehensive database from which to market, cross sell, up sell and analyze via relevant and timely messaging.
- The website is designed for two-way conversation by delivering relevant dynamic content tailored to the visitor.
- Marketing conversations are now commonly about strategic positioning, value propositions that resonate and messaging about the customer’s needs, not the company and its products.
- They funnel large numbers of qualified leads who are ready, willing and able to buy to their colleagues assigned to the sales function.
- They produce high value, useful, helpful marketing material, events and activities engaging early in the purchasing process.
- Everyone (marketing and sales personnel) understands the technology and can leverage technology for efficient and scalable teams and activities entirely.