Everyone’s Thinking About the Economy
We keep hearing about a possible recession, which makes small to medium size businesses (SMBs) in any industry understandably nervous. We forget that the economy cannot grow forever and that up-and-down economic cycles occur historically.
With the eventuality of an economic downcycle, your business model cannot only be to operate in good times and wait for things to erode during the bad. In an industry like manufacturing built on many family-owned or decades-old shops—survival in a down cycle is clearly a priority. But can your business thrive in a down cycle too?
Published in TopSpot: Diversification and Scenario Planning
In a recent article about driving growth in the current economy, Mark mentions diversification. It may go against initial reactions, but strategic diversification could help your business grow during an economic slowdown. It starts by asking yourself what healthy markets work for your company based on capabilities and investing ability.
He worked with a plastic extruder looking to diversify. 80% of their business was with large window and door manufacturers, and a concentrated revenue stream like this could get hit hard should the housing and construction market continue to decline. To get ahead, they looked at indoor agriculture and greenhouses, a growing area where they could offer trays and other equipment.
He often utilizes an exercise called scenario planning, a unique way to think about the future. Instead of focusing on what you make and where else you can sell it (an inside-out view), he recommends looking at what is happening in the market and where your capabilities fit (outside-in view). First, look at all the factors affecting entrance into a market, including economic, competitive, technological, and social/cultural influences. Plan three years out and develop hypotheses about key success factors for your business to thrive. Scenario planning forces you to identify several futures and to develop the capabilities needed for your business’ success, whichever emerges.
Marketing needs sales to close leads, and sales need the exposure to start conversations—you cannot optimize one without the other.
Sales and Marketing Alignment
Mr. Coronna finds that many manufacturers are often sales-oriented businesses, and some do not have a marketing function. When a business does have both, he often hears that sales and marketing are not aligned.
Having led both sales and marketing functions, he understands what it takes to create alignment, plus integration opportunities to make it one process with multiple participants. He calls his approach the Intelligent Sales PipelineTM, and this process means everything functions together regardless of ownership.
Manufacturing as an industry often conflates sales and marketing with marketing programs focusing on sales collateral and trade shows. While both tactics can be effective, they must contribute to an overall marketing strategy to demonstrate value and attract prospects. Many companies need to see the value of marketing paired with practical benefits.
Lead generation and revenue management is a process that must be optimized in a healthy way. When integrated, marketing plans and sales playbooks work together. Marketing needs sales to close leads, and sales need the exposure to start conversations—you cannot optimize one without the other.
This interview originallly appeared in TopSpot. You can read the full interview here.