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 subtle 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 anonymity. 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 engage in the modern buyers world of the Internet.
I spent a week with them but only needed a few hours to really see what was going on. Their problem is similar to many (or even most) manufacturing companies. They don’t understand how to go to market in the 21st century. Their marketing machine is working like crazy as if they were stuck in the 90’s when trade shows were the main event, so to speak. They don’t understand how to break through the noise and get the attention of their target audience. They are a me-too product and perceived as a commodity by their customers and prospective customers and have no idea that this is the perception.
I was able to isolate the problem to two major problems; centralized control and archaic marketing. The strange thing is that the industry Acme serves, pharmaceuticals, is growing rather well compared to other manufacturing sectors.
Their old style marketing 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 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 hosting nothing more than digital brochures and an e-store that sucks up more revenue than it brings in.
- Messaging is about product features without any real knowledge of the positioning, value proposition or perceptions of 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.
My recommendation is to modernize their marketing function. I promised them that if they follow this advice about restructuring the marketing function and bringing in a lead 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 and 21st century marketing savvy CMO and put him on the leadership team as a senior adviser. He brought in marketers who were able to fully operate modern marketing technology. 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 had a commitment from top leadership to consider Marketing as a revenue generator, a revenue engine for the business.
- They had 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 were metrics obsessed to ensure it is known what works great, what works OK, what does not work and what has failed in order to optimize and iterate for optimum spend and absolute growth.
- They had 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 to have a conversation with visitors by delivering relevant dynamic content tailored to the visitor.
- Conversations were 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 friends assigned to the sales function.
- They produced high value, useful, helpful marketing material, events and activities engaging early in the purchasing process.
- Everyone (marketing and sales functions) understands the technology and are able to fully leverage technology for efficient and scalable teams and activities.
This could be your company, but the question is, “is it a description of you now or a description of you in the future?”