I recently had the opportunity to lead a series of round-table discussions with a group of approximately fifty sales and marketing leaders from a diverse set of companies at the annual MAPI Summit in Chicago. During one of the discussions, we heard from a marketing leader who admitted that although 80-90% of his company’s revenue is generated from its existing customer base, his entire marketing budget is focused on acquiring net new customers.
What accounts for the misalignment in marketing focus and investment in existing customers with both US and global manufacturers?
To better understand this dynamic, during my presentation I asked the audience to raise their hands if existing customers generated more than 90%, 80%, and then 75% of their revenue. Everyone in the room had raised their hands. The reason why account-based marketing, especially marketing to existing accounts, hasn’t caught on in manufacturing has to do with marketing culture and ABM’s acceptance by sales as a true partner.
Let’s get back to that “net-new” marketer. I asked what kind of products his company offered. Without getting into technicalities, he described his company’s portfolio, which included parts used in process manufacturing machinery. Those parts aren’t the kind of thing you’d create a landing page for – or are they?
When I inquired what the product lifecycle was for these products, I learned each part has a specific lifetime and would need to be replaced over time, ranging from 12-36 months in some cases. Having heard this, I asked: “Wouldn’t it make sense for marketing to support sales efforts to renew or replace by reminding customers when they reach end-of-life on some of the products and begin a campaign to educate them on new or replacement offerings?”
Later during the round-table discussions, the distributor’s role came up – specifically, distributors who provide both finished and OEM products, such as truck axles or gaskets for large industrial applications. I challenged our audience to consider how they launch new products into existing markets, where they have existing dealers and buyers. Are they leaders who can simultaneously execute product launches across multiple geographies, or laggards who sometimes have to wait weeks, if not months, to launch their product around the globe?
Because many of these companies are global, some described very sophisticated processes for planning and disseminating content to the subsidiaries and distributors; these include companies like Cisco and Siemens. To the dismay of many, the majority of the marketers present said they had misaligned processes. Many were beginning to explore channel marketing platforms to store assets and translate them into different languages for dealers around the world.
Some of these suggestions, like supporting sales in account-based marketing efforts or using channel technology to localize the content and drive better launch results, may seem elementary to sales and marketing leaders, especially those in technology verticals. Yet as I spoke to more CEOs and R&D leaders in the audience, I gained an appreciation for how these individuals are employing Digital Transformation initiatives to break some of the norms in their companies. While many are focused on “Four Wall” internal initiatives, many others were beginning to focus externally on customers and supply chain partners. “How do we bring our dealers up to speed?” or “How do we manage customer experience, both direct and through our channel partners?” are some of the questions they are beginning to ask themselves.
Clearly, there is a recognition that marketing’s role needs to extend beyond the four walls and into areas they aren’t necessarily invited to participate in, such as account-based selling and marketing planning. After all, with the right data, an existing customer is three times more likely to take you up on an offer than a net new prospect. Isn’t it time for sales and marketing leaders in manufacturing to “get with the program” and become more marketing savvy and data-driven to reach their growth goals?