As we approach 2017, business owners are beginning to define their strategies for the coming year. Many economists are predicting a soft 2017 when it comes to manufacturing. With the U.S. dollar becoming stronger, oil prices at all-time lows and uncertainty in politics and foreign relations, manufacturing companies are expected to cut back. In this economic climate, manufacturing business owners must ask themselves if they’re prepared.
As the economy weakens and sales begin to decline, the natural tendency for manufacturers is to cut costs and push the burden to their suppliers, or just ride it out. This puts contract manufacturers, distributors and freight and logistics companies in a very tough place. Long-standing relationships are thrown out the window as purchasing agents focus on the lowest cost provider.
For manufacturers, it will become increasingly more important to diversify their portfolio of customers to mitigate the cost-cutting and vendor-switching tendencies of original equipment manufacturers.
“As the buying climate continues to become more difficult, it’s time to start thinking about how you sell and the value you provide to your customers. Will your customers retain your relationship as market demand weakens?” says Chris Peer, owner and CEO of SyncShow.
Smart Business spoke with Peer about how manufacturers can position themselves for success in the years to come.
What are the keys to retaining customer relationships as market demand weakens?
With a decreasing market demand, it will be increasingly difficult to sustain production levels as they have existed between 2014 and 2016 for many manufacturing sectors. How manufacturing companies react to the future sales challenges today is paramount. Manufacturing companies must increase new customer acquisition and diversify their customer portfolios to sustain and grow market-share in a recession.
It’s been said that the best-run companies in lagging sectors can usually do well. Market data suggests that best-run companies have a strong value proposition, strong brand awareness and a strong sales force. Best-run companies do more than sell their products. They create an experience throughout the extended buyer’s process. These pillars of success are the key challenges of small to midsize manufacturing companies, yet many manufacturers have failed to embrace the transition from a traditional sales model to a modern buyer-friendly experience. Data shows that sellers must transcend beyond merely playing the sales game because buyers expect so much more today.
What opportunities exist within the challenges expected for manufacturers?
The coming year is predicted to bring many challenges to manufacturing companies. How you look at these challenges is key to business success. Some manufacturers will put their head in the sand and ride this out, while others are seeing that purchasing agents will be making radical changes in their existing supply chain, opening up opportunities for new relationships that traditionally are hard to come by. Now is the time to engage prospects that have been out of reach for years.
By 2020, it is expected by some that customers will manage 85 percent of their relationship with the enterprise without directly interacting with a human.
What do manufacturers need to do to be successful given these changes?
Manufacturers must invest in the way they sell their products and solutions. Buyers have changed the way they buy and sellers must adapt. Next year will continue to bring new challenges to the way buying decisions are made and how goods are sold to customers. Manufacturing companies that embrace today’s challenges will be prepared for a softening economy, and will be able to reduce losses while being positioned for a stronger recovery than those that put their head in the sand.
Professionalizing sales and marketing is perhaps the most important component to mitigating a declining market. From the buyer’s first visit to your company’s website to contract close, analyze every step of your selling process and make sure the experience your brand presents surpasses that of your competitors.
Insights Lead Generation is brought to you by SyncShow