Overcome the challenges impacting B2B manufacturing in 2023
B2B manufacturing businesses have been weathering the unique recession we’re in with added challenges: supply chain disruption, parts shortages, inflated input costs, geopolitical crisis, sustainability requirements, workforce shortages—the list goes on and on. But manufacturers have also recently built resilience into their processes that will help them weather a recession: digital transformation, workforce re-skilling, IIoT capabilities and supply chain restructuring.
A proactive response before, during, and following a recession will also impact success. According to Deloitte, manufacturers that enter a recession with higher capital investment levels and asset efficiency levels realize higher returns during the uptick. Along the same lines, investing in an effective marketing strategy is key to succeeding during the downturn.
Let’s look at the biggest challenges currently affecting B2B manufacturers and how to solve them.
To provide you with expert insights, we spoke with Executive Director of Innovation and Client Development, John Edelmann, who has 25 years of experience in manufacturing marketing strategy.
Top trends impacting manufacturers in 2023
Supply chain disruption
Supply chain uncertainty is expected to continue into 2023. The recent rush on goods, complicated by supply-chain disruption, has resulted in many businesses, including manufacturers, over-ordering raw materials and parts. Many businesses are sitting on an excess in storage that they may have to unload at a loss while others are waiting for backorders to be filled.
Supply chain uncertainty puts enormous pressures on production, understanding the products that need to be produced and the parts required to produce those products.
- AI and ML. Material requirements planning (MRP) and enterprise resource planning (ERP) systems can utilize artificial intelligence (AI), machine learning (ML) and automation to track raw materials, inventory and production. They offer real-time supply chain monitoring, which eliminates manual calculations and guesswork. They also improve productivity, add efficiency and reduce costs. Furthermore, digital tools and data evaluations identify risks to operations, gaps and overages so manufacturers can adjust accordingly.
- 3D printing. Cutting-edge manufacturers are using 3D printers to produce parts that are now hard–or impossible–to come by, thus reducing supply chain issues for printable parts and reducing freight costs.
- Smart factories. Manufacturing facilities that have older (legacy) equipment can add new technologies or retrofit their existing technologies to automate and expedite This workaround enables them to use existing equipment to manufacture completely different products as needed. It helps them to minimize costs and avoid supply chain delays involved in purchasing new equipment.
The Great Resignation and “quiet quitting” have resulted in shortages and inadequacies in skilled workers. According to Manufacturing USA, manufacturers must fill more than 800 thousand openings and develop a skilled workforce that can handle robotics, automation and AI roles.
- Intelligent hiring. Manufacturers now have automated, intelligent processes at their fingertips that allow them to find and analyze candidates that are a good fit for their organizations today and in the future. In this way they can bring new staff up to speed quicker and retain them longer.
- Manufacturers can train their staff in advanced manufacturing with the help of virtual reality (VR), augmented reality (AR), and workforce development systems. Upskilling supports career development and provides fulfilling careers and salaries so manufacturers can keep talent.
- Workplace safety. Employee health and safety (EHS) systems combine cameras with AI and ML to monitor a manufacturer’s workforce in real time to improve work conditions and predict and prevent injury. Workplace safety systems create a culture of safety and appreciation in staff, and they reduce liability, insurance costs and OSHA violations.
Manufacturing marketing challenges and solutions to weather the 2023 recession
“In order to succeed during a downturn, manufacturers need to put together a proactive plan that leverages technology from an operational standpoint and from a marketing standpoint. Manufacturers need to let buyers know that they’re using state-of-the-art technologies in ways that will improve their business and add value,” explains John.
1. Cutting marketing to save costs
Unfortunately, many businesses respond to a recession by cutting their marketing budgets to save costs. While this may result in short-term savings, doing so affects the ability to bring in sales and puts even more pressure on margins. It decreases a brand’s visibility and share of market. And it will make it more difficult to recover when we move out of the recession.
Don’t cut your marketing budget. Simply put, cutting your marketing budget may result in short-term savings, but it will hurt your long-term success. When we enter a downturn, manufacturers that view marketing as a cost center are going to struggle to drive revenue. In this article, we explain how a recession impacts marketing efforts and why marketing is crucial to weather a downturn.
2. Misaligned digital efforts
Some manufacturers were unprepared for a compulsory digital transformation during the pandemic. The scramble to digitize siloed processes factory-wide has created misaligned digital efforts. Some businesses chose cost-leaders over more effective solutions, others implemented digital processes too hastily without a proper plan. In the end, this translates to digital transformation that isn’t supplying the expected results.
Align martech stacks. It’s easy to see how misaligned digital processes–which might impact operations–is crucial to repair. And the sooner the better. The same holds true for misaligned martech stacks. To get the best results, sales and marketing technology must be aligned to each stage of the customer journey.
In an economic downturn, your marketing must be precise to bring in a greater number of high-quality leads. There’s increased pressure to prove marketing attribution. For this to happen, it’s critical to align your sales and marketing efforts at key touchpoints along the customer journey.
When you have alignment, you can track return on ad spend (ROAS) and return on investment (ROI), and optimize and improve your campaigns to get the best returns. This starts by making sure your martech stack is set up correctly.
If your digital transformation isn’t bringing in the outcomes you expected, most likely, your efforts are out of alignment.
3. Off-target marketing
During an economic downturn, customer dynamics shift and the long B2B sales cycle grows even longer and more complex. As everyone hunkers down to weather the recession, marketing must be narrowly targeted to get the best return on marketing dollars. Manufacturers that base targets on pre-recession data (or assumptions) begin to miss their mark.
Base personas on data and research. Many businesses have the unfortunate conviction that they know the mindset of buyers and decision-makers. While internal knowledge may help uncover the challenges, goals and driving factors that lead a decision-maker to a buying decision, they are just a piece of the buyer puzzle. To truly understand your customer, you need to perform research and analyze data for various decision-makers, businesses and verticals. And buyer personas aren’t one-and-done. Customer dynamics tend to shift to value-based solutions.
Use personas to develop on-target messaging. When your customer personas are on-target, you can develop on-target messaging. To communicate value, your messaging must be more strategic than ever before. You need to know how to speak to different decision makers in different verticals, with solutions for the specific geographies and climates.
Support your messaging with research, data, internal experts, partner experts, cross-promotional sharing, external validation, and in-market research. Business-minded decision-makers want to see real-world results that are statistically significant.
Accounts-based marketing (ABM). A highly targeted and highly personalized approach to customer acquisition is effective during a downturn. And it’s a strategy particularly suited to B2B manufacturing. An effective ABM strategy makes it easier to track return on investment (ROI) and optimize campaigns, which means less wasted spend and lower risk.
Choose an agency partner that specializes in B2B manufacturing
Work with an established B2B agency that specializes in B2B marketing for manufacturers. With over 20 years of marketing experience in the manufacturing industry, Elevation can help target your unique audience with the right message, across the right channels. We can help you synchronize your sales and marketing to bring the results you expect, create targeted messaging and develop an ABM strategy. Contact us to learn more about how our marketing services can benefit your manufacturing business.