© Small Business Marketing Solutions ~ White Paper Number 0002 ~ Dave Duncan ~ 2008
Never stop marketing...
Peaks and Valleys... That has been going on for years in the manufacturing services industry. I can count all the times that I have heard the statement "We have all the work we can handle right now, so we are backing off our sales and marketing effort". Wrong, wrong, wrong. You can never stop marketing. When you are at a peak in manufacturing this is the time to look at a number of things.
- Raise Your Prices
- Cull Out Unprofitable Customers
- Expand Into New Areas
When you are the busiest, this is the time to look carefully at your profit structure and margins. Look especially careful at jobs that have run a long time and repeat often, most times, these are the jobs where the profit margins have eroded and the comfort factor has lulled you into complacency. This is also a good time to re-examine your estimating and costing techniques. If your booking rate is too high, then it is a good bet that your prices are too low.
Remember the 80/20 rule... 80% of your problems are usually from 20% of your customers. And 80% of your profit is from 20% of your customers. This is the time to get rid of the dogs. You can increase your profit margins substantially by getting rid of customers that cost you money and worst of all provide you with a loss of opportunity cost.
Maybe it is time to look at adding a service like painting or assembly. Offering these services to customers is the first and most direct way, but when you have the new capability in place, you can offer it to new customers also.
Numerically you will see 11% of your customers per year go away. They may go out of business, move out of the area or be acquired and a personnel change takes place. Suppose one of the customers in that 11% number is your number one customer. You always need to have prospects in the wings to replace customers that go away for one reason or the other.
Another avenue is to look at investments outside your market. Diversification can aid significantly when it comes to the valleys that follow those peaks.
Contact DaveIf you have any specific questions regarding this particular White Paper or with regards to any other subject then please feel free to contact Dave Duncan at Small Business Marketing Solutions using this contact form. Dave will be happy to hear from you and you can take advantage of his tremendous experience which he has earned the hard way over many long years... Thanks for your interest...... We can assist you with your marketing objectives. Give us a try and reap the rewards of a professionally managed marketing campaign designed exclusively for your business... |
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