Add to cart: Targeting the right customers requires marketing/supply chain synchronization
Frank O Smith, senior contributing editor (fosmith@thewritinggroup.com) -- Manufacturing Business Technology, 4/9/2009 2:55:00 PM
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The recession has left industrial manufacturing companies among the hardest hit. As business from current customers slows down, these manufacturers are turning to unconventional methods that make them easier to be found by prospective clients.
Industrial products maker Process Barron serves companies in the pulp & paper, cement, steel, and power-generation industries. Based in Pelham, Ala., the company has traditionally relied upon face-to-face sales.
“But given the current economy,” says President Ken Nolen, "[Many of our clients] are doing layoffs, making it more difficult for our salespeople to get in to see buyers in the plants. People are relying more often on Web searches to find what they need.”
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| Using refined keyword searches optimized for industrial product manufacturer Process Barron’s Web site, “We went from zero hits to 120 hits in January, and January usually is our slowest sales month,” says President Ken Nolen. |
Process Barron realized its in-house-developed Web site simply wasn’t effective enough in attracting customers, so it enlisted the services of Industrial Strength Marketing (ISM), which specializes in Web marketing optimization.
“Most costs in sales are still heavily skewed toward putting people in cars and making calls, but buyers are hunkering down,” says James Soto, president of ISM. When buyers go online, however, they’re already preconditioned to make a purchase, he stresses. “You want to intercept them when they’re hot.”
ISM focuses on optimizing client Web sites with keywords that will drive them to the top of the list in a Google search. Interestingly, research by U.K.-based Juniper Research found that 87 percent of those conducting searches will first click on items that come up on the left side of the screen, rather than paid sponsor links on the right. “Each of those clicks is free,” Soto stresses.
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Soto thinks the Internet is the best low-cost option there is, “But if it’s mission-critical to be found, you must have the right strategy and technology—and then promote it,” he cautions. In fact, ISM helped Process Barron develop key messaging to optimize the Web site for targeted prospect searches.
“We went from zero hits to 120 hits in January, and January usually is our slowest sales month,” says Process Barron’s Nolen.
Integrating marketing strategies more tightly with supply chain constraints—and carefully analyzing which products best optimize profits given those constraints—is another way to hone operations for the highest returns in a down market.
“Profitability isn’t just about supply chain costs, but marketing expenditures as well,” says Jeff Karrenbauer, president of Insight, a provider of supply chain planning solutions. Its Integrated Enterprise Strategy (IES) system, released in January, is a planning tool that links marketing and supply chain strategies together. IES assigns targeted marketing expenditures to markets, channels, and products with the greatest margin, given available supply chain capacity—thereby supporting increased demand and maximized profits.
“IES avoids the common strategic planning mistake of siloed management, where marketing and supply chain strategies are developed separately,” Karrenbauer says. “When you put them both together, what you get isn’t a marketing strategy or a supply chain strategy, but a corporate strategy that maximizes profits given certain constraints.”
IES works in conjunction with SAILS, Insight’s flagship supply chain network optimization product.
“In today’s market, companies want to know how to get the most for their marketing dollars,” says Karrenbauer—a process that requires focusing on building demand for some products over others.
“The question is, where do I reduce my spend? If you increase demand, it’s not free,” he says. “You have to pay for it in terms of supply chain and capacity constraints. Maybe it’s too expensive, or the margin is too thin. Maybe it’s a great idea, but you don’t have the upstream capacity. IES enables you to break it down by channel, brand, product, or region. It brings it all together under one banner, showing you where you get the most lift for your marketing expenditures.”
