The COVID-19 pandemic has decimated entire industries, interrupted global supply chains and disrupted industrial purchasing processes. More than 44% of CMOs reported midyear budget cuts as a result of the pandemic, and 11% of that group expect their 2021 budgets to face cuts of more than 15%, according to the Gartner CMO Spend Survey 2020.
If you’re like most marketers at industrial companies, you already faced a cultural challenge in building a strong business case for marketing — 64% of marketers surveyed in IEEE GlobalSpec’s 2019 Trends in Industrial Marketing reported having difficulty, in some way, with how marketing fits into their overall organization.
But the disruptions in the supply chain and trade shows have created a unique window for marketers to shift the manufacturing executive mindset from marketing as an ongoing expense to a critical base of solutions for maintaining and growing the business.
You can make marketing the strength of your business by:
- Future-proofing your budget.
- Learning from past recessions.
- Building a solid foundation of data collection.
Future-Proof Your Marketing Budget
There is a lot of talk these days about “recession-proofing” of “future-proofing” your business. What that means is to protect your business from future disruptions. In this case, let’s focus on how to future-proof your marketing budget. You do not need an exhaustive approach for this. Focus on three priorities:
- Grow your ideal customer base.
- Leverage your manufacturing strengths and expertise.
- Invest in data driven insights.
New markets have emerged as a result of changes in how we live, work and learn. Your strengths may help you compete in those new markets.
The global supply chain disruptions have created opportunities. A manufacturer that has experienced an interruption in parts delivery from sourcing in Asia may put a higher priority on reliability and delivery. Their business may be in play.
Your customer base defines your value proposition. You fulfill a need for them.
As a marketer, how does your company’s value proposition resonate in this changing environment? What do you do really well, and whom can you do it for? How can you leverage your competitive strengths?
Learn From the Past: Invest Now to Emerge a Winner
A Harvard Business School study released after the Great Recession showed that the companies that fared the best during those uncertain times were the ones who were able to master the delicate balance between cutting costs to survive today and investing to grow tomorrow. These companies focus on operational efficiency and investing in marketing, R&D and new assets.
Growth: Firms that cut costs faster and deeper than rivals have the lowest probability — 21% — of pulling ahead of the competition when times get better.
Market share: 80% of companies that wait until post-recession expansion to advertise see zero increase in market share, according to a study of the 1981–82 recession conducted by McGraw Hill.
Profits: Companies that focus on cost-cutting during a recession trail other groups after the recession, with average growth of just 6% in sales and 4% in profits compared with 13% and 12% for companies that balance strategic cost cutting with aggressive investment.
Here are seven marketing tactics to employ now:
- Invest in key accounts.
- Appeal to the nervous buyer.
- Adjust your marketing mix.
- Maintain or increase your marketing budget.
- Improve marketing employee productivity.
- Adapt sales and marketing to match new buying behavior.
- Turn your website into a marketing engine.
Build a Solid Digital Foundation To Offset the Loss of Trade Shows
The industrial purchasing cycle has been evolving for years, and now it is even more in flux with the huge dropoff in trade shows and direct sales. Industrial marketing teams can no longer be relegated to static roles in the buying process, more often fulfilling requests from the sales team rather than working with sales to influence buyer behavior. Companies with a strong online message now have a huge advantage, starting with the discovery of your products and services.
Engineers are spending the majority of their time searching online for solutions. Thomasnet research shows that industrial buyers spend only 17% of their time meeting with potential suppliers and only 6% of their time with any one sales rep.
In other words, it is essential to educate your marketing stakeholders on how digital technology and Industry 4.0 have shattered traditional barriers between marketing and sales. It is critical to invest in marketing to deliver value at every stage of the industrial buying process. A digital marketing mix and tech stack are no longer differentiators; they are table stakes.
The Marketing Opportunity
It’s time to help your sales and finance teams understand that to make the most of your customer interactions, your industrial company needs to ensure digital marketing has a dedicated seat at the budgeting table.
In order to make marketing a strength of your industrial business, you can leverage two key mindsets from your shop floors:
- Make sure you have the technological systems and data infrastructure in place to achieve marketing breakthroughs.
- Nurture the continuous improvement mindset to become more agile and better problem solvers.
Disruptions in the supply chain and trade shows have created a unique window for marketers to shift the manufacturing executive mindset from marketing as an ongoing expense to a critical base of solutions for maintaining and growing the business.
Learn how the winners of past economic uncertainties came out on top. Join James Soto, founder and CEO of INDUSTRIAL, one of North America's top industrial marketing agencies, for a free one-hour webinar to learn how to thrive in uncertain times. The free webinar is on Thursday, Sept. 24, at 2 p.m. CT.