The Overall Revenue Effectiveness Methodology
Manufacturers use an extensive toolkit to improve production efficiency and quality. Process engineering, continuous improvement, Six Sigma, root cause analysis, OEE (overall equipment effectiveness), and KPIs are widely used tactics that help improve net profit margins and customer satisfaction.
In contrast, their toolkit to optimize revenue is typically less refined. The rigor and precision commonly found in the "back end" of the business - production and operations - is missing in the "front end" - the marketing and sales. It's time to change that. Let's adopt the mindset of precision and process that's made manufacturing excellent for the revenue growth side of the business.
The Overall Revenue Effectiveness™ Methodology is like OEE for boosting sales and profit margins.
Engineering a Linear System
We can see the same effect in the four key pillars and many steps of the ORE™ total revenue framework for manufacturers.
The product of the effectiveness of each stage of setting strategy, implementing manufacturing marketing, executing industrial sales, and integrating technology ultimately determines the revenue generated.
A couple common marketing and sales efficiency metrics highlight the problem. Most industrial B2B websites only convert visitors to leads at a rate of 2%. Most sales teams only close qualified opportunities at a rate of 25-35%. Think of the net impact on revenue if we only bumped those two conversion rates to 5% and 40% respectively. It's a massive change in the net output at the end of the process.
The ORE framework incorporates over 200 discreet steps in the revenue process. Each can be prioritized, reengineered, improved and then measured to track improvement and maintain performance.
Systematic Approach to Boost Revenue Generated
The ORE framework has four primary pillars. These include:
- Strategy and Board Operations
- Manufacturing Marketing
- Industrial Sales
- Marketing and Sales Technology
Each pillar is comprised of a number of categories and tasks just like a manufacturing process, and each represents an opportunity to improve efficiency. Each improvement translates through in cost efficiencies and performance improvement, ultimately boosting revenue and gross profit margin.
Let's look at each in a bit of detail. If you want to dig deeper, download my free self-paced diagnostic tool to help you quantify your current baseline and key opportunities for improvement.
Strategy & Board Planning and Oversight
The ORE Framework identifies 31 areas of performance at the corporate level. These include the board of directors composition and oversight (are there independent directors with specific contemporary revenue growth experience), a culture of accountability and a strong buyer focused mindset.
From a systems optimization perspective, if corporate strategy is unclear, flawed, or inadequately conveyed, or culture contrasts with stated goals, then the marketing and sales activities will be inefficient with lots of waste.
The Full Range of Manufacturing Marketing Activities
I look at 73 areas of marketing performance across categories of general marketing (resource allocation, culture, activity across all major industrial marketing disciplines), content marketing, the website and digital footprint, SEO, competitive intelligence, sales enablement and lead generation / lead management.
Understanding revenue growth as a system to be engineered and optimized helps us visualize the dependence on strategy and senior leadership to inform marketing, and sales execution to leverage the outcomes.
Predictable, Repeatable Industrial Sales Focused on Helping Buyers
Experience tells me that only 10-20% of tradeshow leads are fully followed up. Let's assume that strategy and marketing are aligned and that you're at the right shows, showing and discussing the right things - but if there isn't a culture of sales accountability, training and coaching, and a strong effective process and methodology, then none of the inputs matter.
Sales is a source of considerable waste and inefficiency in the revenue production process. The ORE Framework suggests 48 areas of focus across six categories.
Too often legacy mindsets and techniques prevail, just as they used to in manufacturing. The resistance to change is often greatest here - as is the need.
Marketing and Sales Technology That Boosts Effectiveness and Improves Buyer Experiences
If buyers, prospects and customers are at the core of your focus, and you seek to measure, optimize and manage each aspect of your engineered revenue system, then you must have the right technology to improve user experience, marketing effectiveness, management oversight, and sales effectiveness.
Using the CRM module of an ERP (or even worse an Excel spreadsheet) and a typical Wordpress website doesn't do that. An integrated marketing automation and sales technology tech stack, built on a single database, without IT barriers and with lots of sales coaching and training is key to success.
To optimize the technology that underpins consistent revenue results, I guide companies through 47 areas of focus across six categories.
Stop Compromising Quality in Revenue Growth with This Simple Formula
Implementing rigorous measurement and management in production and operations took time, energy and a management and leadership commitment to change management. Some long-time employees, and even some owners in some cases, couldn't make the transition. It was traumatic and wrenching for some companies.
Yet they all understood they had no choice.
As a result the back end of most companies now runs with precision and a mindset of continuous improvement, metrics, root cause analysis and excellence.
We can bring the same to the revenue growth activities. It's not easy, but it's simple.
ORE provides a familiar language and framework that draws on companies' experience and provides a framework and process for improvement in revenue growth.
The press release announcing the introduction of the ORE methodology is below.
Press Release Announcing Consilium's New ORE Methodology is Tailored to Complex Manufacturing Sales Environments
BOSTON, MA - 9 August, 2021
Capital equipment companies and other industrial manufacturers face dual revenue growth challenges. First, they have to adapt to buyers' expectations shaped by digital-first B2C experiences. Second, they have to overcome the inertia of long-standing traditional approaches to manufacturing marketing and industrial sales.
Many manufacturers recognize the digital imperative but struggle to implement and overcome institutional inertia. This is similar to the journey many went through as they worked to improve quality and increase profitability. In fact, OEE (overall equipment effectiveness) which is an approach which many use to optimize production line efficiency, is also the ideological foundation upon which Consilium has built its ORE concept.
OEE recognizes that the net effectiveness of a production line is the product of the effectiveness of each step. Therefore small inefficiencies in several steps magnify each other. And the aggregate output will be disastrously impacted when steps aren't well coordinated.
That's a perfect analogy for the complex sales and revenue growth environment faced by capital equipment manufacturers in today's markets. Too often tweaks or implementation of tactics here and there fail to drive revenue results and don't even improve forecasting, pipeline, or even lead generation. While each is often important, executed in isolation they don't contribute to overall results.
"The ORE framework is a gamechanger for machinery manufacturers," says Ed Marsh, founder of Consilium. "It distills the challenges they face in maximizing revenue growth into a context that they naturally understand. Too often 'digital' and 'marketing' are considered hocus pocus by metal benders. But they instinctively understand the OEE concept in their world. So this pulls all the pieces together in a sensible framework."
Unlike a simple formula of trade shows and trade journal print ads to generate qualified leads for active projects to hand to sales, today's environment involves extensive buyer research, digital groundwork with technical SEO and traditional content marketing practices, website personalization and conversion optimization, sales process design, sales enablement content, a robust data stack, sales force testing and training, and integrated technology to simultaneously improve the buyer experience and the sales team's efficiency.
Consilium's ORE methodology is built around a framework that integrates the marketing, sales and success functions; aligns marketing and sales departments and metrics; and the threads of data, technology and buyer expectations.
Marsh continues, "This ORE approach will be core to the revenue growth framework that we'll help company teams create at this year's Manufacturing Growth Summit in Nashville in December. I'm so excited the reactions I'm getting from manufacturers who suddenly find clarity in the complex process of digital marketing and virtual sales."
Learn more about overall revenue effectiveness here.
About Ed Marsh: Ed has 25 years of experience in industrial marketing, sales & management. He's a HubSpot tiered partner and has helped a number of B2B companies achieve revenue growth success by coaching and developing their internal teams using this model. He's a graduate of Johns Hopkins, a former Ranger qualified Airborne Infantry Officer, NACD Board Director Fellow and member of the Association for Corporate Growth. He's also an experienced international businessman and former Export Advisor to American Express's Grow Global program.