The Death of the Cold Call
Manufacturers must seize upon the changing sourcing landscape to grow and diversify their businesses by embracing the changes the Web has brought to sourcing and supply chain management.
North American manufacturing markets and research and support of supply chains here have changed dramatically, but many small- and medium-sized manufacturers (SMMs) and moldmaking businesses have been slow to react. Consider:
- 25 years ago, manufacturers looking to source manufacturing projects, products and services contacted potential suppliers to get the information they needed.
- Today, your prospects are using the Web to get the information they need and then contact the suppliers that their initial research supports.
- What your Web site says to manufacturers and prospects in the initial phases of this research is critical, as it influences decisions while allowing prospects anonymity they never had before.
This is an important distinction, because many manufacturers continue to operate and communicate under the beliefs that these changes have not affected them or the buying habits of their customers and prospects.
Have you bought a new car recently? If you have, think about how you used the Internet to research that purchase—you likely checked out the make and model, looked at options and features, and then approached the dealer to negotiate and place an order.
Now, consider how the Web has changed the role of the dealership in this process. Fifteen years ago, we as buyers were at the mercy of dealer because all the information we needed was provided (or not) by the car salesman. We couldn’t get any information about the colors, displacement, engine size, interiors, options, taxes, delivery charges and most finance information without talking to them. This wasn’t a very pleasant process, unless you were a car dealer.
Today, you enter a car dealership with more information than our fathers had—all the info that Dad got from the salesman, we get from the Web. We walk in the door not just with many of our questions already answered—we now often know as much about the vehicle as the dealer. And there’s more: we also know more about competitive models than the salesperson does.
The changes that the Internet has brought to car-buying share compelling similarities to what you as a manufacturing supplier (car dealer) are experiencing now, and how influencing and interacting effectively with your buyers and prospects (car-buying consumers) has changed.
Here’s why this matters to you: as a manufacturer of complex, high-tolerance manufactured products, your Web site and presence are influencing stealth prospects that are researching you and your competition as potential nodes in their supply chain. If they find the things that define your company as a strong candidate, they will contact you—armed with more info about you than their fathers had.
This doesn’t mean that handshakes and shop visits and supplier qualification aren’t important—they still are—but the practice of early stage due diligence and building a short list of suppliers has changed dramatically.
And how are you using the Web as a buyer yourself? How has the Internet affected how—and how often—you look for tooling, consumables and materials options?
Elements that once defined the cold call are dying. Some subscribe to the notion that it’s already dead. Prospects are looking for you right now, and they’re using the Web to see if you’re worthy of a call. What are they learning about you from the content and information they find on your site, side-by-side against your competitors and alternatives?
No one walks in the door without knowing something about you—if you’ve taken the time to tell them.
What Role Does Price Play?
Add to this phenomenon the evolution of manufacturing into a global ecosystem, and a perfect storm has formed that places enormous challenges on you and all North American SMMs.
A large part of the North American manufacturing business ecosystem and its protocols that formed within them were based on geo-economic conditions: we existed within or in close proximity to the largest, greatest, most powerful economy and markets in history. Demand for manufacturing and the formation and management of supply chains were primarily among neighbors. Those factors created relationships and the management of those relationships with specific, relatively simplistic qualities and demands.
But today, options for buyers and your prospects have expanded beyond those regional sources and they’re choosing new options right for their businesses. Price is certainly a factor. But studies show that price becomes more important to buyers whose products are short on technical requirements and complexity. In short, simpler, lower-quality products begat greater focus on price as the primary factor in selecting a manufacturing source.
Conversely, buyers of products and assemblies that require greater technologies and tolerances see cost as less of a motivation, as quality, competence and reliability increase in importance to protect their companies from supply chain risks and disruptions. These buyers covet stability and long-term relationships.
The Role of Your Web Site
Google has never answered a question. Google doesn’t create content. Google cannot give you a feedrate, the latest offers from your cutting tool or machine tool rep, or your best options for titanium or 401. It won’t tell you about your best options for MRO or standard industrial products. It can only feed back to you what someone has chosen to share on a subject. Google’s strength—for now—is in locating the most relevant content as quickly as possible and feeding it back to you.
It is crucial for you to consider this as you develop your Web strategy. Search engines will only present to your prospects returns based on the quality and relevance of the content you and your competitors present online.
There is nothing more important to your success today in nurturing new business and attracting interest from new buyers in new markets than what your Web site says about you. Subsequently, your Web site cannot create a strategy for your business. Your Web site is not a strategy in and of itself. Its job is to support the business development strategies you’ve set in place.
This article is the first of a five-part series on business developments affecting North American moldmakers and manufacturers, and how best to capitalize on emerging trends to grow and redefine manufacturing businesses.