Running a manufacturing business? Don’t hide your light under a bushel!

Posted on 28 Feb 2014 by The Manufacturer

Noel Moriarty, who has worked within the manufacturing industry through consulting roles in IBM and PwC, blogs on how manufacturers can make the most of advancing computer technology.

Noel Moriarty

The commercial internet has been going for the best part of 20 years now, invading almost every aspect of life. It continues to evolve with the development of the technology, with new ideas emerging all the time bringing about new capabilities. Many businesses, though, seem to put their website into the same marketing box as printing 5,000 brochures for next year’s exhibition – a miscellaneous cost item. Talk about hiding your light under a bushel!

Some get used, many stay in the cupboard and will only get refreshed when the existing ones have run out! Which is a bit out of kilter with keeping pace with the development of technology, n’est-ce pas? The technology keeps moving, so it hardly seems surprising that websites become out of date very quickly if you treat them like online brochures, it’s a logical consequence.  The most significant of trends in the last couple of years has revolved around using mobiles in some form or other, and in using social media, but many haven’t really grasped either that well so far.

Learning from the retail sector

We’re not all retailers, but there are some lessons we can learn from the retail world, and the way in which it interacts with consumers. Some of the big players do significantly well, depending on your view shoring up failing sales levels with online trade. Often, media reports of the ‘demise of the High Street’ usually have a final comment, in the tiniest font imaginable (or readable!), that when you take into account online sales, then revenues actually grew!

You probably shouldn’t see it as an ‘offline vs online’ split. The nature of things is that the consumer has become technologically very savvy, and expectations have been raised in terms of what the technology can do, when you can for example watch TV anywhere, at a time and on a device of your choosing, or you can connect with distant relatives and chat with them for free, on something you carry around in your pocket.

There are three significant points from this:

  • Online is growing. It’s not a case of ‘offline is dying’, as such, but certainly online is growing, and in doing so it is not simply cannibalising the market, it is actually generating overall growth. The pace of the shift to online is even surprising many of the leading retailers
  • Customers expect to work online as the norm. They expect to be treated the same, whatever channel they use to reach you.
  • Expectations have been raised for everyone. Smaller retailers, or those whose pockets aren’t deep enough, suffer by comparison in terms of how their websites work(if Amazon can do it why can’t you).  Similarly for manufacturers.  If they can use the internet to buy personal items and consumer goods in a way that is technologically advanced, then why shouldn’t they expect the same things at work?

Which is putting businesses on their toes to provide what the customer wants – not just that they can buy your product online, but raising competition in terms of how they deal with you. Sales, Marketing and Customer Services are all impacted.

The challenge of selling

It’s pretty clear that we have all become used to buying things online, and yet for many manufacturers, selling online remains something of a challenge.  If you still have that five year old website that proudly proclaims, in true brochure fashion, your extensive product range and your proud heritage of serving the pink widget industry over 6 generations, but the buyer either can’t find your website or can’t see it properly when they do, then perhaps it’s time to catch up. Similarly, if you are unsure about the return on investment from engaging in social media.

It’s reasonable widely estimated that opening up an online channel will add 10% – 15% to your sales revenues, through a combination of extended reach, increased ability to compete and better merchandising of your product. At a time when Manufacturing is starting to emerge from recession, there is an attractive appeal to a sales channel that is relatively lower cost than hiring a new sales force.

Taking time to manage

That said, it’s not just a case of building a new website and then expecting the sales to flow in, any more than you can hire the salesmen and they are instantly productive and always hit sales targets (don’t they?). Sales forces still require an investment of your management time, they need training, they need managing, they have overheads like salaries and cars, they need to go to exhibitions and visit customers. The equivalent is true of websites, they need to be managed, they need marketing campaigns to drive footfall, they need staff to respond to customers and they need to be embedded into your business in terms of stock management, order processing, shipping and delivery, returns.

It’s now the case that over 70% of buyers in B2B relationships use Google at the outset of their buying process, and on average, buyers complete 60% of the buying process before they even approach potential suppliers to talk about products, pricing and availability. It’s time to take a wider look at how to use the internet for Marketing and think beyond the ‘traditional’ brochure website.

The technology can be made to do many things to help your business become more efficient, and also to grow. Looked at one way, there is probably never a better opportunity to take advantage of the capability. From the other perspective, given the pace of technological change, it could be a last chance for many not just to catch up, but to stay in the competition at all.