Tl;dr - Industrial manufacturing revenue growth strategies must be built on evolving buyer expectations and market conditions. Too often, though, they're simply extensions of what worked in very different eras. It's up to boards and executives to change that.
Do Capital Equipment Sales Happen TO You?
Every company in the capital equipment space knows the revenue growth challenges they face.
- Boom and bust business results associated with economic cycles
- Concentration risk with the majority of sales coming from existing customers
- Difficulty penetrating accounts with well-established competitive incumbents
In most cases, orders are "received" rather than created.
When times are good, everyone's focused on meeting production requirements. When times are bad, it's too late to fix the underlying issues, and everyone scrambles. Fewer orders in the market lead to discounting and unfavorable terms.
Everyone lives with that reality. Can it be changed?
The answer is....maybe. But not by doing more of the same as Einstein taught us with his definition of insanity.
If it's not more of the same, what's the solution? Effective revenue growth strategies must be built on buyer expectations and effective marketing and sales tactics. These are often rather different than traditional approaches!
Beyond that, let's look at five foundational concepts that should inform your revenue growth strategy.
5 Fundamentals to Guide Revenue Growth Strategies
1. Marketing is Sales, and Sales Still Matters
It's well documented that buyers are often 70% through their buying journey before they want to speak to salespeople. That means that much of the early sales process (and buying journey) must be managed by the marketing team.
So marketing now must manage what were traditionally sales tasks, and do so remotely and asynchronously. That's got important implications for staffing, resources, and budgeting - and will often be unwelcome for sales leaders who yield some of theirs.
That being said, sales still matters. While some software companies have tried to move to a "self service" (product-led growth) motion, in most B2B complex sales like capital equipment, sales remains a critical function.
But that doesn't mean the same sales competencies, tactics, and processes as before. Today, sales reps must have significantly sharpened skills and integrate their efforts with the marketing team so that the buyer has a satisfactory experience. That means we need to recruit, hire, train and coach better.
2. A Revenue Growth Is a System Just Like Production
There's a common dissonance that I observe in manufacturing companies. It exists between how folks think of and manage production and operations (with process engineering, continuous improvement, and careful measurements) and how they think of marketing and sales (sort of a mysterious black box.)
We can apply the same approaches that improve production to revenue growth.
Why not have A3s for certain sales functions?
Why not run a Kaizen to identify meaningful, predictive revenue KPIs?
Why not create "fixtures" for sales - for instance playbooks that outline the important questions to be asked and qualifying information to be obtained?
Overall Revenue Effectiveness™ (ORE) is a framework that helps manufacturers think of their revenue growth system as a series of steps - each of which can be optimized.
3. There Isn't a Single Solution - You Need Inbound, Outbound & Nearbound
Sales used to be largely outbound. Field sales reps would cold call to discover and create opportunities. Sales went to buyers.
With the rise of the internet, and buyers' ability to do their own research, outbound sales began to decrease in effectiveness. Savvy companies saw the corresponding opportunity - to position themselves on the internet in ways that put them in front of prospects. With that, inbound was born. Buyers can to sellers...covertly.
As the volume of information has exploded, it's become increasingly difficult for sellers to gain a clear information advantage, and buyers have become overwhelmed. Keeping up with day-to-day priorities takes more time. When there is time to research new ideas, it's hard to form informed and consolidated opinions because there is so much contradictory and confusing information. That's begun to erode the effectiveness of inbound.
Therefore, while both inbound marketing and sales, and outbound sales remain important, it's nevertheless getting harder to get in front of buyers. Show me a business leader who's not concerned that their sales team is getting fewer meetings and finding fewer projects (particularly with new customers) and I'll show you someone who's disconnected from the reality their team faces.
What's the solution? While there is no silver bullet, the trend toward Nearbound is promising. The premise of nearbound (essentially partner marketing and sales) is that to cut through the noise, you need affiliations and associations with a prospect's current vendors and trusted advisors. Without that connection, it's increasingly difficult to get on the radar predictably. Simply scoring a meeting or discovery call often requires the equivalent of an introduction or referral.
Referrals used to be the gold standard of leads, and reps used to mine them individually. Today, nearbound seeks to systematize referrals at the organizational level.
4. Not Everyone is You
When I want to learn a deep topic, I read about it. When I want to know how to do something, I watch video (at accelerated speed and non-linearly.) When I want a quick update on a simple topic, SMS is fine, but SMS doesn't stay unread in my inbox as a trigger for further action, so an email is better when I have follow-up required. And a quick phone call is best to work through decisions.
That's me. You probably have different preferences.
And so do each of your prospects and customers.
That's why you need content and approaches that satisfy different personalities, work styles, learning styles, and situations.
For instance, to reach prospects, you need content with great SEO, trade shows, trade journal advertising and content, PR, partnerships, podcasts, etc.
To appeal to different learning styles, you need material for audio, visual, and kinesthetic learning styles (regardless of what you prefer.)
And for various roles on a buying team, you need information that speaks to their concerns - in form and function. For instance engineers will value downloadable BIM files, while finance folks may be interested in sample capex requests with narrative and examples.
You have to market and sell for prospects - not yourself.
5. The Buyer is the Decider (or Deferrer!)
Nobody cares about your product. They care about their outcomes - how their professional lives change (or not) due to their decisions. Your product or service is incidental to that; a means to their valued end.
So everything you do and say must be founded on an understanding of buyers that can only be obtained through qualitative and quantitative research.
That means that you must create a digital user experience (website info, navigation, chatbots, SMS ability, knowledge base, customer protal, etc.) that supports them. Your team must viscerally understand their reticence to make decisions, for fear of being wrong, even when the righteous path seems so clear to your team. That's the root cause of increasingly frequent "no decision" outcomes in complex sales.
You must create partnerships that earn you the opportunity to have some initial moments of prospects' time. If your product is a large, complex, long sales cycle solution (enterprise software, capital equipment) you must design entry sales that help you establish less risky commercial relationships and create justifications that demonstrate your knowledge rather than reveal unseriousness.
I can sum it up this way: if your initial meeting with prospects involves an "About us" deck or corporate overview video, you're completely blowing it. You're making yourself irrelevant.
Revenue Growth Strategies Must Meet the Market Where it Will Be
By definition, strategy is forward-looking, big picture. Tactics, in contrast, are short-term actions.
Too many industrial manufacturers these days build their revenue growth strategy just as they do their budgets and sales forecasts - based on a linear progression of what they've done for the last five or ten years.
That's a product of recency and normalcy biases. And that's risky in a turbulent world.
The problem is that rarely will a company have a sudden awareness that their strategy is lacking. Typically there's a gradual deterioration that's explained away as cyclical market circumstances...until it can't be. At that point recovery becomes a Herculean task.
If your board of directors doesn't have independent directors with the revenue growth perspective to assist management in implementing appropriate revenue growth strategies, that's the place to begin without delay.