Growing in slow to uncertain market conditions calls for a balanced approach
Throughout my career, I had the privilege to interact with many leaders in the Industrial/Manufacturing sector. Our discussions on business conditions netted one common theme: We need more growth. The underlying question was: "How do we break away?"
This caused more conversations and questions:
- Obviously, if a company wants to grow above its market performance, it means taking share – Against who? How?
- It has been proven that it is very difficult to "beat the incumbent at its own game" – How differentiated is our approach?
- Traditional messaging (our product has...) or promotions (x% more for a limited time...) may work for a while – There is research that suggests this is not a sustainable strategy. How are we going to beat the odds?
- Digital/Social marketing may also work, but the ROI may also be difficult to measure – Can technology augment relationships at an affordable cost?
- Technological breakthroughs or business model disruption is risky but someone else may beat us to the market if we don’t anticipate and plan for it – Are these potential disruptions integrated in our plans?
Before you consider your Marketing/Sales investments for next year, let’s look at what I call the Balanced Strategic Marketing approach. It has 4 basic steps:
1. Clear Mission/Vision/Ambition:
Why should a customer, an employee, an investor or any stakeholder want to interact with us? Is our mission/vision/ambition clear and exciting? Is it achievable?
2. Clear Market Map to define Where to Play & How to Win:
Identify "where to play". These are the intersections of end-market, geographies, customers, applications... that are most attractive to us based on internal capabilities and competitive insight. From there, identify "how to win". Analyze where we tend to win the most or lose the most and why. What is our unique selling proposition? Is it quantified, proven, battle tested...? This is the cornerstone to prioritize the marketing/sales campaigns.
3. Aligned Products to Markets, Customers and Applications:
With "where to play and how to win" defined, what do we need in our portfolio? Do we have gaps? Can we prune some products/services to make room for others? Our attention is usually placed on what is often called “Horizon 1”: Target existing customers with existing solutions. This is “me too” territory. Done right, it will work in the short term but may not be sufficient to attain a sustainable growth trajectory. How do we create new value? This is often called “Horizon 2”: Find new customers with existing solutions or new solutions to existing customers. This is "differentiated" territory now. Done right, it will create a strong path for growth. Lastly: How do we disrupt the status quo and create a new market? This is often called “Horizon 3”: New customers & new solutions. This is obviously the riskier approach with the highest potential rewards. The rub is to spend quality time with customers and listen actively to discover the real “job to be done". Set aside a team of your best talent to go after this without the traditional oversight. Trial and error will occur before a clear path is found.
4. Aligned Marketing, PR and Sales focus:
I would invest in bringing sales & marketing together to build and agree to 2) & 3) above at the lowest possible level. It pays dividend down the road. CRM systems or simple spreadsheets can easily accommodate this level of planning. This process worked well when we asked "sales" to come up with their plan by product and "marketing" to come up with their plans by region/channel. Where the team reached the deepest alignment during planning, the goals were largely attained. Marketing campaigns must then be prioritized within the allowed budget to maximize coverage of the areas we decided to go after (and leave room for the unexpected along the way).
Lastly, we need to plan for training and coaching of our teams and channel partners to drive the intended results. Expecting change without investing in our most precious assets is, from my experience, one of the top reasons why plans fail.
A few years ago, my team and I used these techniques to generate 3X growth in our target market in less than 5 years.
The point is: To grow in slow to uncertain market, “more of the same…” cannot be the only answer. We must set aside some resources to explore adjacencies and develop differentiated/disruptive solutions to grab the share of mind and wallet we deserve.
My rule of thumb suggests to invest 70-80% of your budget in “Horizon 1”, 15-20% in “Horizon 2” and 5-10% in “Horizon 3”.
You should obviously test these numbers within your own ecosystem to get to the right balance.