It's Easy to Sell When the Economy is Strong
Introduction to SignalsFromTheOP
Guide to episode
- It's easy to sell when the economic tide lifts your boat
- Despite the strong economy many companies are experiencing changes in sales: lengthening sales cycles, stagnant quotes, and more "no decision" losses to the status quo
- Strong orders create their own challenges, and management may hesitate to focus on sales and marketing at the expense of production
- But now is the time to commit some abundant resources to addressing those - once a slow down comes it will be much harder
Hi, I’m Ed Marsh. Welcome to this episode of Signals from the OP. These periodic video blogs let me expand a bit on things I see happening which I encourage executives at industrial manufacturing firms to keep an eye on.
Like a military OP, out ahead of the lines and away from the light and noise – able to pick up faint indications of what be getting ready to happen, I work to provide that same kind of early warning of strategic business threats and opportunities.
Today we’re going to channel Warren Buffett – the oracle of Omaha. Of course lots of people love his folksy wisdom, but I think one of his best quotes is “You only find out who is swimming naked when the tide goes out”
Now I live near the coast and we have some pretty decent tides here, but this isn’t about some prurient local interest story from the news this summer. Rather it’s about the cyclicality of the industrial business.
When machines almost sell themselves
I work with B2B companies, most industrial and many manufacturers. Many of them are actually capital equipment manufacturers and I have some great success stories in the material handling business – fork trucks, conveyors, that kind of stuff. So this headline recently jumped out at me.
The Conveyor Equipment Manufacturers Association reported that its June 2018 booked orders increased 93.7% when compared to June 2017 orders.
That’s almost double the volume year over year!
And I see lots of manufacturers facing an interesting and contradictory set of conditions.
On the one hand they’re busy. Lead times are long, order books are full. They’re having a hard time hiring enough factory workers. In fact I see companies getting orders just because they can deliver something. It’s that easy to write orders right now.
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Even as selling gets more unpredictable
But…and it’s a big but….it’s harder to sell. I also hear from the same companies that:
- sell cycles are longer
- more quotes get written with a smaller percentage being converted
- buying teams are more complex and the status quo wins more deals
So in other words business is great….because the rising tide lifts all boats. Sure there are real challenges related to delivering orders, but those are the classic “good problem to have.”
However, when that rising tide starts to go out, the sales challenges become more significant – and that’s why I’m using Warren Buffet’s quote this week – When this tide goes out, companies that aren’t working to fix the underlying marketing and sales issues are going to be embarrassed – actually they’re going to be hurting.
Is a recession imminent? No
Now, am I predicting a recession? First that’s not my gig. Second, I’m not. The small business optimism for July was astounding. Just missed being the highest ever.
But we know it will turn some time – and we can probably all agree that there are ten pending issues at least which could trigger it. We won’t know except in retrospect what did – but it will happen. (If you're inclined to develop contingency plans, this post for board directors and senior execs from the NACD (National Association of Corporate Directors) blog has some tips.)
And as sure as day follows night, when that happens there’ll be teeth gnashing and the first thing folks will do is cut marketing. That’s what the finance folks always recommend – and as companies start to bump up against their loan covenants, the bank may demand it. And while I think that was always a bit silly, in a world where most selling was done directly by field sales people who generated their own leads, the impact of cutting marketing was manageable.
Buyers have one experience with your business....and you answer them with silos
It's a different world now – marketing today owns PR, demand gen, most of lead gen, and a substantial part of the sales process - right through the virtual buying journeys that they have to manage via a website. They’ve also got to create critical sales enablement content that helps sales illustrate outcomes and avoid the features trap.
So cutting marketing today would be akin to simply saying “we’re going to put in an extra fax machine to handle the volume of incoming orders and cut all our sales people.” You’re going to hear crickets.
So you’re worried about finding trucks to carry your products, workers to make them and expensive raw materials to buy – I get it. It’s an inconvenient time to be thinking about driving more leads and sales.
But if you don’t take advantage of the good time now – refining sales process, identifying and cultivating target accounts, building optimized content, aligning sales and marketing, establishing a customer focused revenue growth function, etc – you’re going to be digging your way out of a deep hole.
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Actually that’s kind of mixing analogies – so going back to where I started you’ll find that the riptide strips your bathing suit off, and you’ll be stuck naked as the tide goes out.
I’m going to be talking in an upcoming Signals about what industrial companies can learn about marketing and sales from software companies. So if you’re tightening the draw string on your bathing suit, wondering what else you could do to prepare, keep your eye out for that. I think there’s some interesting lessons to be learned.
In the meantime, I’m Ed Marsh. Thank you for joining me for this episode of Signals from the OP. If you enjoyed my slightly irreverent approach, please share this and subscribe – either to my youtube channel EdMarshSpeaks.TV or at the related blog SignalsFromTheOP.com.