Why is marketing for manufacturers so undervalued — and what can industrial marketers do about it?
According to the 2018 CMO survey, a survey that assimilated information from almost 3,000 marketing executives in various industries throughout the U.S., marketing spending across all industries averages 11 percent of total company budgets. This average accounts for 6.9 percent of annual revenue. The level of investment in marketing has been on an upward trend over the last six years.
While marketing investments, as well as the types of marketing implemented, vary by industry, it is telling that manufacturing companies allocate only 6.4% of their annual corporate budgets to marketing (vs. the 11% across all industries). That comes in at just 2.7% of annual revenue. This begs the question: Why is there such a difference in the monetary value placed on marketing for manufacturers vs. other industries?
As an industry that has not historically relied on marketing as a revenue builder, this question has an obvious answer: history. Manufacturing companies simply don’t have a tradition of investing in marketing as a growth driver.
If you have experienced the benefit of implementing strategic marketing for manufacturers, it can be frustrating to run up against the prevailing attitudes that result from this history. Knowing how to approach conversations with stakeholders who hold these ossified positions becomes important for two main reasons.
In the first place, you, as an industrial marketer, need to know how to talk to them in order to get a marketing budget approved. Second, considering the lack of faith in marketing for manufacturers that everyone else in the sector seems to have, a strategic approach to marketing represents an incredible, under-exploited opportunity for manufacturing businesses to differentiate themselves from competitors and drive growth.
To help marketing leaders in the manufacturing space seize these opportunities, here are some concepts that can assist them in advocating for the idea that manufacturers need to take marketing seriously and commit dollars to a strategic marketing investment. At a high level, it all comes down to knowing how to speak about the value of marketing for manufacturers to the three levels of management: the executive level, the business unit level, and the product/service level.
The Executive Level
Manufacturing executives are tasked with keeping their eyes on the horizon and looking at the long game when it comes to company growth. This involves developing five- and ten-year growth plans, as well as staying up to date on trends and evaluating high-level analytics related to company offerings. Manufacturing executive interests are big picture, visionary, and concerned with staying ahead of the industry curve to maintain growth and progress for their company.
This mandate can be a lot to shoulder and marketing can help ease the burden in several ways. For instance, when coming up with an effective strategic plan, there are some big-picture questions that must be answered, which marketing can address. Questions such as: Is this the business we should be in? Are there additional ways to diversify? Who are we as a company?
When advocating for marketing dollars with your company executives, be prepared to share ways that the marketing process can not only assist in answering these questions, but also help them communicate their vision for the company — both internally and externally.
The Business Unit Level
At the business unit level in the manufacturing sector, the questions tend to become a little more focused. Leadership at this level works to determine how to remain competitive in their marketplace. They work hard to assess customer needs, as well as stay up to date on competitors. All of this is done in order to craft the best plan for positioning products and the company.
So, how do you, as a marketer, help your business-unit-level colleagues understand how marketing can make their jobs easier? Demonstrating the importance of strategic messaging in manifesting product and company positioning is one way to advocate for the importance of marketing. By doing this, you can also ensure that a marketing perspective becomes a valued part of the positioning process overall.
The Product/Service Level
A manufacturer’s product or service level is its first line of defense. This part of the organization manages sales and the sales process on a basic, ground level. They take the big-picture plans and form them into tangible reality. Tactical strategy is the name of the game.
A marketing presence during the planning, design, and implementation of these sales-oriented initiatives is one of the most obvious ways that marketing can benefit the pipeline. The biggest challenge is getting colleagues to slow down, educating them on the ways that marketing for manufacturers can help them improve results by focusing on things such as the prioritization of communication channels, the types of communications, and the timing of communications so that leads can be generated and nurtured properly vs. always taking a brute-force sales approach.
The most effective communication a marketer can engage in at the product/sales level is around the details. Marketing research can help with product pricing, roadmapping, and designing an outreach strategy. Additionally, offering suggestions regarding tactics for customer engagement can be helpful to establish the value of a perspective that takes marketing for manufacturers seriously. Discussing the various ways to measure the outcomes of these activities will also be key.
Championing the Value of Marketing for Manufacturers
The good news for all champions of marketing for manufacturers is that, even though gaining validation at different organizational levels may be difficult, there is only room to grow. So keep up the good fight!
If you’re interested in making a detailed financial case for your marketing budget, I encourage you to check out the Industrial Marketing Budget Guide.
And if you need any assistance with talking to any of these audiences or making the general case for the value of marketing at your company, please reach out to me on LinkedIn.