If you’re an engineering, manufacturing, or industrial business, then read on! If you want to know how to avoid the most common marketing mistakes, stop being the industry’s best-kept secret, and tell the world about your skills, capabilities, and products and services, then read on as David Roberts and Carl Jarvis give you the tips, tactics, and strategies, which work today.
David R: If you go to our website, you will find our guide, the seven classic marketing mistakes made by manufacturers and engineers, and how to avoid them.
Now you're welcome to download it and go through it in your own time, but we feel that we can add some value by explaining some key points from the guide.
Carl J: What it is, it's working with an outdated marketing strategy, or at some level - an obsolete marketing strategy. And what I’ve tended to find is that too many manufacturers don't do any strategic review of their business at all, and so essentially they just operate.
And of course, when you're operating, you just in the day-to-day grind of it all and you're going through, and you're doing what you need to do, and you've got all sorts of pressures from various different angles that you're looking at.
And of course, one of the things is that because you get caught up in that, you don't really allocate the time to be able to sit down and really start to think through, what the marketing strategy of the business is, and even what the strategy of the business is in that respect.
So, what I wanted to outline to people, is just that process of saying you need to pull back, and really start to think about your business and the strategic elements of the business. And the way I talk about that in the booklet is this analogy of the telescope and the microscope.
And what I tend to ask clients when I’m working with them, is: “what method did you use to arrive at your current marketing strategy? Did you use the telescope, or did you use the microscope?”
And of course, I always get a giggle. Because people say: “well, we use the microscope. We're looking down the microscope right in front of us, what's right there and then. And we don't tend to do any of the telescope stuff.”
And so, I think what's crucial in that aspect today, is the fact that change itself is changing. So essentially, what was working well a few years ago, isn't necessarily what's going to work well in the future.
So really, it's getting people to just review that that strategic approach at some level, even to take the time to look at it for the first time in a long time.
David R: When you say things like strategic approach, and looking at your business strategically, that can sound to a lot of business owners, not all, like hard work.
Because it's not very often that we take time to work on and in the business. Many people have heard that phrase before.
But by talking to someone like you, they could do it very quickly, and because the strategic overview it's not as difficult as it sounds. And sometimes it's just pointing people in the right direction. So don't let the words put you off.
Carl J: As I said, strategy, what's all that about? Isn't that what big corporations do and things of that kind of nature?
And it's not, really, all it is asking some really profound questions that you just never tend to ask of yourself in the business. And it is just taking that time to do some blue-sky thinking and to ask some of those fundamentally simple questions, but very impactful.
David R: I think that a lot of business owners do ask themselves these questions already, I think they roll around their heads.
And when you talk about strategic questions, those are the ones, the ones that keep you up at night. The questions that you want, where your net customers coming from. How do you make sure you don't have one job finishing, but not another one started?
Those are the strategic questions that we're talking about. And it is a mistake that small to medium-sized business owners don't do that often enough.
Carl J: So, you think through “what do we sell?” And you start thinking about, you start making a note of well, we sell this, we sell that, we sell products, we sell services, whatever it is.
But then the strategic question is, now what do we really sell or what does the customer really buy? Because it's not necessarily, and in a lot of cases almost exclusively the same? That is what we do when we kind of, considering what seems to be on the surface.
And of course, if you start to dig deep and you start to understand what it is they really buy, then you can then change your approach, your language, your message, your core messages, and really start to understand the customer at a much deeper level. And obviously, reap the rewards of that.
David R: And it is a satisfying and profitable thing to do for your business. And it's not that difficult, just need a little pointing in the right direction. You could sit down and do that yourself; you can download the guide.
Carl J: Onto lackluster customer portfolios. Okay, so this is a classic for me because what you tend to do, you tend to find. I’ll go into a client, and I start to look at their customer portfolio strategy. Well, first of all, they go what on earth is that?
But ultimately, what it is when you start the business, you tend to have an approach which is get the work in. If we can find some customers, we just want to get the work in, right? If they can pay, we want to get the work in.
Carl J: But of course, over time what happens is that you start to take on customers, and that don't quite fit or their hard work or their late paying or they're over-demanding.
And so, what you need to do, you need to actually look at your customer base, and you need to then start to break it down and say well, part of this process is jumping back to the first mistake, which is part of the strategic review is what's the definition of an ideal dream customer?
Who would be just the perfect customer? And you need to spend the time to define who that is because then that then ties into the next what we're talking about now, which is the fact that you've got to look through that database, and you've got to say to yourself which customers are just great, we love dealing with us, they respect us, they like what we do, they're happy to pay our prices, all those kinds of things.
And then what I say to clients is to break into three, there are the customers, you talk to customers that are the ideal customers. Not top, ideal I think is one more I’m looking for.
Then there's the ones at the bottom, the bad ones, the hard work. And those at the middle, which are not too bad. So the thought process then is to say okay then, let's say we were an investor, a property investor.
We've got certain properties that are great, they're paying a good yields, they're in a good place, and all the rest of it. You got those in the middle, which you could do something weird. You could do them up, change the tenants, whatever you need to do.
Or the ones at the bottom, you just say you just got to get rid of those, just sell them off, so you can throw back cash to buy some more of your ideal properties.
And what you want to do, you want to do a similar thing with your customer portfolio, because ultimately, the makeup of that customer portfolio in two to three years’ time can be the result of your intended thoughts and intentions, rather than just whatever happened to come in through the door.
David R: I see so many business owners who are spending so much time on customers that quite frankly when you work it all out, aren't profitable. But for a lot of business owners, who don't do effective marketing, one of the reasons why they hold on to them, is because they don't know where the new customer to replace them. Get away from that, by looking at marketing in a different light.
Carl J: The thing is if you're doing some good, superior, consistent marketing, then that's going to create a flow of new customers, which are then going to put you in a better position to have more options.
David R: Another thing that puts business owners from doing that, is because marketing takes time. It's not something you can turn off and on like that, and you've got to invest in it before you see the return. A lot of business owners think marketing doesn't work, but it does work if you look at what we're talking about today, and have the time, work with a good company, yes.
Carl J: That's right. Sometimes people like going to the comments saying boy, you've got some great customers there. Well, to a certain extent, that didn't happen by chance, you did a methodical process to get into that.
David R: What everyone needs to know is, if you have a good system that's methodical, repeatable and you can get your good customers in on a regular basis.
However: mistake number three, is that somebody wakes up one day, do you know what? You know what that Carl and David is talking about? We're going to implement that. But I have not got the time.
Carl J: What's funny about this is that I do some work through the European Union for horizon 2020 photograph.
And of course, I’ve seen this in the UK, but this program is Europe-wide. So through this program, I ended up with working with a new client in Turkey, and they developed a new product.
Anyway, so I had the first meeting with the two owners of the company, and we had a really good meeting, and part of this is I do the marketing coaching for them. Anyway, the next meeting we had, they sent this young girl in that they're just taking on from university, and says “oh, I’m now looking after the marketing.”
And I just said “well, what's your experience in marketing?” – “Well, I haven't done any before, but I’m sure it can't be that hard.” Oh my gosh, it doesn't matter what country you're in, it's the same situation.
David R: The thing about it is that if I hear one more time, well, it's a young man's game, it's all this digital stuff. You're on social media a lot, aren't you? Your profile, your expertise, your thought leadership all that is a key part of attracting new business.
And you can't leave that in the hands of someone inexperienced. If that business owner turned up to the meeting, you could then extract all that wealth of knowledge and experience and turn that into marketing collateral that will attract customers.
Carl J: Particularly when I think that what's interesting you see, is that at the end of the day, you're leaving a real big responsibility on that junior person for the future success and growth of your business.
This is the vital aspect of where that company, where your company's going to be in a few years’ time. And you're leaving it to this person who's got no experience, no competence or expertise in this area.
So, I think one of the things I tend to find is that if you are going to do that as an MD, then basically you got to get some outside expertise experts in, which is where I come in myself to support that person.
Yes, there are administrative aspects that need to be done, there are operational aspects that need to be done. Somebody's got to, if you want a wheelbarrow, somebody has got to lift the wheelbarrow and push it.
But at the same time, you've got to know where are you pushing the wheelbarrow, and what should be inside the wheelbarrow. And it's that kind of thing that person hasn't got.
And fundamentally, you as an MD, although you're responsible for the marketing, you're responsible for lots of other things as well. So that gets so diluted that just to think that you can, rather than delegating it to this young person, you're abdicating it to them and then you're in trouble.
David R: And please make sure that we know the difference between delegation and abdication. Because you want to keep your fingers on the pulse with that. Always we've come across this so many times though, yes. And that's why we're making it a mistake. It's not that we think that there are people in the businesses who aren't capable, the key is what you said, give them the right support.
Carl J: Yes, give them the right support. And it's the expectation as well sometimes, it is the fact that oh, that's been dealt with now. It's one of those areas, isn't it? That if you don't allocate a budget, then all as it appears to be is just an expense, it's just a cost. I talked a lot about this in my book as well, marketing for manufacturers. But essentially, it's just that you've got to allocate the appropriate resources.
But of course, a lot of people say “well, what's appropriate?” Well, through the research that I did, through the charter institute of marketing, essentially, we're looking at between five and ten percent of revenues per year should be spent on your marketing.
And so I’ll go into some companies, and I’ll start talking about budgets and they've got 0.5% and you just think yourself, you're just not going to be able to get the traction that you need. And to compete as well against your competitors with that small amount of marketing.
So, I think essentially as well because you make that kind of investment, it focuses your mind, it shows that you. See, at the end of the day, I wrote my book because I want to inspire manufacturers to take marketing much more seriously. Because I think one of the key things for me is that they don't.
But I know the impact, the positive impact it can have if they will take that seriously. And put the resources and the investments accordingly. And it is an investment, if you make the right level of investment, then it can make an impact.
So, I think I use a story in there about if you're going to jump the canyon on your motorbike or your car or whatever, you're going to put enough fuel in to get you to the other side because you've only put enough to get you halfway.
And of course, what can then happen you should fall into that, oh we tried some marketers and it didn't work. And it was just inappropriately done because you put off a tank of fuel in the car or whatever, and it was never going to get you to the other side of that canyon.
David R: It's so important that you understand that picking the right partner is crucial. But then, making sure that you understand realistic, smart, time frames of giving your return on investment. But we both know that if you do that right, you will absolutely get a return on investment.
Carl J: I think the key to it is the fact that what people tend to forget, is that there's an acquisition cost to a new customer. There's no such thing as a free customer.
And if you've been used to just like running off the word of mouth thing, where people are just passing your details off and they'll give you a ring and so and so said that you can do this for me. That's great, it's had its place and I’m saying that it's had its place because I think marketing and online and digital marketing is so prevalent now.
That at the end of the day, you've got to be able to say to ourselves, we've got to know that we have to make an investment to buy a new customer. If you get what I mean, and the right marketing, superior and consistent marketing I was talking about that.
Because purely, inconsistent marketing is one of the biggest failures in business, then you are going to reap those rewards.
David R: I mean the number of times, I was talking to somebody, a business owner the other day, and coming out of this pandemic, the challenge he's got is his business has been around 20 years.
And he knew everybody in the companies that he was working for, and we're talking a significant company, two million turnover. But with the pandemic that made people redundant, they've moved them into different positions. And now, all the contacts that he knew in these companies, literally either don't make that decision anymore or they disappeared overnight.
So now, he's left in the position of reestablishing his company at the time in life, he's 60 years old. When really, he wants to be slowing down a bit. And that's a sign of what's going to happen more and more and more.
Well, how are you going to position your company in this day and age? Is invest in the channels that are going to attract new customers to you?
Carl J: I think we understand that vulnerability as well because I think that's one of the other things as well when you're in business. Really what you need to do is assess those different vulnerabilities, and marketing could be one of those.
Or as you say, keep people in your business and things that are on nature. So it is worth looking at of what you're doing and saying okay then, so this is the way things are, almost back to the first one again, the strategic viewpoint of this is the way things are now.
But where's the best of vulnerabilities in those because this pandemic, I would have thought it's been incredible. It's been so disruptive and all the rest of it. But ultimately, it's going to bring about a big change. And so maybe at some level, it's now a better time than ever to reevaluate things.
David R: Absolutely. And what I want our business to understand is, if you go about 30 years, a lot of the machinery they would have been using, would have needed more manpower and was more expensive because of that.
But now, the machines are reducing the amount of people they need over that time to do that work. And it's the same with marketing. We can automate the marketing to make their lives easier as well.
So they need to be a good idea to talk to you, to find out how that's doing. If they're interested in doing so, I would encourage people to from this engineering site.
Carl J: Particularly today, because the thing is it starts to fit into the engineering and manufacturing sector because we can monitor everything because we can measure everything because we can analyze things because we've got graphs and trend charts and stuff like that, that we can do now from a digital marketing point of view.
At the end of the day, that's almost like you can use that in the same way as you manage your production scheduling, and on all of the activities happening on your shop floor. And you can have almost like a very similar dashboard, in that same context. And it's so powerful there.
David R: If only we could get more people to understand that that's how marketing, how you run your machinery, and how effectively, it's exactly how you get return on investment. You're marketing by looking at the numbers, looking at the efficiencies, and acting accordingly to it. How can it be a mistake to invest in new machinery? Anyone would have thought that's a great thing, new machinery. So, what's the challenge with that?
Carl J: Well, this is another classic where I’ll be calling to a company, and they'll say oh, we've just bought this new machine and a fantastic piece of machinery. It can bank 50 million widgets out a second and stuff like that.
But of course, they haven't got enough work for it, yes. And I wanted to point this out, because it was really funny actually, somebody who read my book was saying to me that he saw that in his own business actually that he go out and he spent 25,000 pounds on a new guillotine, and he says and we hardly use the thing.
And yet if we sat down and said let's spend twenty-five thousand pounds on it on an exhibition or on some marketing, and they go we're not actually spending that kind of money, and yet you'll buy twenty-five thousand-pound guillotine and hardly ever use it, and yet feel completely justified in making that kind of investment.
So, I think the point I wanted to raise here is that ultimately, you go through a process when you buy a machine. So you'll decide what kind of machine you want, you'll then go and you'll check it out, and you'll visit some premises or whatever and see it working.
Then you'll work out how it's going to work within your operations, and you'll figure out where you're going to put it into your factory. Then you'll get some civil designed up, and then you'll get the contractors in to put the civil in, then you'll put the machine in and all these kinds of stuff.
So, you'll do all of this what you call planning work, right? And yet you don't even spend one minute thinking about the marketing aspect of this new machine.
So, I think the thing is for me, is to just get home that you need to be thinking through the marketing aspect and spending just as much time doing that as you are actually on purchasing the machine from a planning perspective, from a budgeting perspective, and stuff like that.
And one of the key things I think I talk about in the booklet, where I went into one company that spent 450,000 pounds on this new machine. And they were really struggling in terms of work for this machine.
So I said to the MD, I said “well, I’ll tell you what, let me have a look at your marketing plan first, so I can understand what you were hoping to achieve, and then I could see where you're going wrong.”
And of course, it's like marketing plan, now there isn't a marketing plan, it's just to get the work in. So of course, straight away, as I’ve just alluded to with that example, he hadn't spent any more time or any thoughts or anything on how he was going to fill that capacity.
So, I think what I’m trying to get across to people is, let's say for example like we're talking about the marketing budget. What you need to do you need to think about what's the capacity of this machine? How many widgets can it do an hour? What's the price point?
What revenues am I hoping to generate from that? Use that as a benchmark and say okay, I’ll probably need to invest five to ten percent of that capacity in terms of revenue generation into the marketing of that new service, or that new machine that we've purchased. So, I just wanted to get that point across really.
David R: And just to add a little bit from my perspective, is that quite often, because they've got a lot of work coming in, they at some point or another in time, they think okay great, this work is always going to be there.
But of course, sometimes it works out great, but other times it doesn't. It ends up exactly as you've just described. So it absolutely belongs in one of the key mistakes of the seven that we're talking about today without a doubt. Now our last mistake, Carl.
Carl J: Is it waiting for a call? So essentially, what I mean by that is that ultimately, don't just sit there and wait for your customers to call you. Or even prospective customers, it's all in the follow-up. So I think what's important to me, is that when I’m looking across the business.
So basically, all I’m trying to say is do follow up with your customers, in terms of just keeping in touch with them, getting back to them. If they haven't bought anything for a while, in fact, there's a client I’m working with at the moment.
And we've gone through all of their trade buyers, so they've got like these trade buyers. And fully enough, they've got all these different trade discounts. And they've never gone through the exercise of going back through those distributors, finding out how much did they spend with us in the last 12 months, and are they on the appropriate trade level.
So essentially, what I’ve said to them is well, what you're going to do is go back to each one of those and have a conversation with them. And some of them, they haven't spoke to me in four years.
And you know what was classic, the one they rang them up, they said “hi, you haven't bought from us for a few years, and they said oh, we thought you'd shut down.”
They said no, “I haven't shut down, we're still here.” And they placed a ten thousand pound order on them there and then. So if they hadn't made that proactive phone call that's what I’m talking about here. Not reacting to clients and customers coming to you.
Or you've got no work coming in. Just the fact that you took that proactive stance to reach out, speak to them. And as you say in that case, find out that they had a misrepresentation of what they thought the situation was.
Then suddenly, I said “oh, yes actually, we do need to do some business with you.” Or is there something we can do together, and all that stuff? So I think the key to it is just to make sure that you don't just sit there and say they'll call us when they want something, no. You keep in touch with them, take the proactive stance. I think that's what's important.
David R: I think that also when you are proactive, and there'd be many leaders, business owners, and marketing people possibly listening to this and why will we do that, but do you do it consistently?
Are you building relationships with all your customer banks? Or is it just transactional? Rather than a relationship. Or they've had those hundred widgets, great, there you go. And you don't hear from them again, you don't contact them until the next time they want 100 widgets.
And all you do and then is people complain about like why do I always have to get my price down, well, because you're not bringing value to your offering. So yes, please listen to what Carl's saying here and what I’m saying because it does make sense. It's in the guide.
Carl J: It's just thought-provoking, it's just putting a position to you. And then making sure that you follow through on those. Because actually that one as well, I think it's that one that I’ll talk about doing strategic reviews with your customers. So every 12 months, you should get together with your top customers, and just have a strategic review meeting, almost like a staff appraisal meeting.
Every 12 months you get your staff member, so how is it going? You don't talk about transactional jobs, you don't talk about operational jobs. You just talk about the relationship, so then you shift yourself from being just, then being just a customer and you're a supplier, to a strategic partnership. I think that is where you can really add the value.
David R: So, our final mistake. Failing to identify, fortune is hidden in your client base. Which is what we were talking about absolutely just now. In terms of yes, you can keep in touch with them, yes.
But do you recognize that all the quotes you've ever done, all the customers you've ever had, even if you've lost them? Anyone at all that's in your excel sheets.
If there is somebody still using excel sheet, or in where it should be in this CRM system, everyone in there is potential gold dust, any inquiry.
Carl J: Well fundamentally you see, I see that as like a real intangible asset of the business.
So essentially, I see these three value streams in a business. One is your current customers. Secondly, is your past and inactive customers? And third, is your non-converted leads. And the way I package that up is, I talk about it as privileged information.
So, you have privileged information about those companies. And what I mean by that, let's say for example non-converted leads, what I mean by that is companies where you've done a proposal, you've gleaned some information, you've put a, not somebody you rang up and you said how much is it for widgets and it's out, it's 10 pound a widget, they go thank you, that's not a non-converted lead in this context.
But it's somewhere where you've gathered some data about them. Because ultimately, what you want to do, you want to be able to then say to yourself what can I do with the current customers?
What can I do with the past customers? And what can I do with the non-converted leads? And essentially, that's three different types of marketing approach or marketing strategy too.
So first of all, what more can you do with your current customers? And this is almost back to don't wait for them to give you a ring, they'll call us when they want something, that's back to doing something proactively then.
But then also, it's looking at those inactive customers and those past customers and saying okay, we know all this information about them, what can we do about that? And as I said with that clients I’m working with at the moment, we've gone through all those past distributors I’ve been working with for the last five to six years, and they haven't contacted them in, some of them in as I say that one in four years.
What activities can we put around those to rekindle those? And then essentially, looking at those non-converted leads and being able to say okay, what more can we do with those. And sometimes, one of the things I’ve said with one of the clients is they used to do these tenders.
So they'd put the tender together, and then they'd be invited into your presentation. They'd do a presentation, and they wouldn't win the tender? Now what they used to do with those files is throw them away?
But I think what was really important is the fact that don't throw those files away, keep that information because you can always then go back and have a conversation with them.
And particularly, the big assumption is, that because you lost the tender, does that necessarily mean to say that they're getting the service that they were expecting from that? Or that they are actually getting the outcome that I was expecting.
So don't think because you didn't win that tender, that the better company won if you get what I'm trying to say. Keep in touch with those, so that, let's say even if the tenders up in three years’ time to be renewed, at least they'll then know who you are because you kept in touch, you asked them if everything was going okay, and things of that kind of nature.
So, it's been able to then say okay, then let's utilize all that privileged information that we've got, to capitalize on that in some context and not just leave it in the draw, leave it in a filing cabinet, leave it on a computer and an excel spreadsheet and those kinds of things.
David R: I think that what we just to summarize what we're trying to get across, is for anyone that's in the manufacturing and engineering space, company.
Please look at marketing again, look at it as a massive tool that can take your business forward. If you are marketing, take this guide and look where you can improve.
Carl J: Digital is so fundamental now to marketing. It's almost indescribable to what it was five years ago, ten years ago.
David R: And let's be honest, in manufacturing and engineering, a lot of it is well, I know this is, and this person knows me, and they give me work et cetera and it's worked for eons. And in the foreseeable future, it will keep on working.
But if you had another string to you about, if you could add digital, that was attracting people that you don't know. When somebody falls out with their supplier, and they search, yes? And you come up. If they read in your content. If they see videos of your work.
Carl J: It's what I love because I started out in engineering, I was a mechanical and production engineer.
That's when I started doing my apprenticeship, and then I moved into proposals, and then sales and all those things. And one of the crucial things for me is that engineering companies have just got fantastic expertise, they've got world-class products, they've got world-class processes.
We wave that union jack, and the world recognizes it as quality and reassurance, and the best in the world mostly. And you've got all these activities you're doing in your manufacturing company, and get those out, allow people behind the curtain to see what are your processes?
What are your systems? What are your software? What are your expertise? What's the expertise of you guys and girls? This kind of thing.
And let the world know about that because then I think all of a sudden you see, if you want to move away from being just a commodity, then if you let people understand and have a better appreciation of your business, and that's your responsibility, not their responsibility to appreciate your business more.
But your responsibility to make sure that you enable them to appreciate more. Then the impact that can have on them opening their wallets, them coming and placing orders with you. Then really kind of understanding more about what they're getting from you, it's just priceless.
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