The manufacturing industry faces several challenges that are now being accelerated by the pandemic. Uncertainty is global: monetary policy, trade tensions related to changes in alliances and competition from emerging countries are creating new economic risks. Frédéric Demierre explains in the following article, what manufacturing companies can do technologically, methodologically and strategically to stay on top.
New business models based on the circular economy bring new challenges such as the pivot towards service, the subscription economy or sustainability. New technologies are bringing their share of innovation that can no longer preserve the major players in the industry: connected objects (IoT), mobile devices, artificial intelligence, advanced production technologies or even cloud computing are all expected by a new generation of buyers and partners.
Added to this are the expectations of a 100%-connected customer base that wants to have new experiences with brands in a personalized way, while benefiting from self-service offers or even obtaining information on demand – anywhere and at any time.
For a manufacturing company to become more efficient and effective, it has no choice but to focus on innovation and technology. They must develop strategies that build their company’s reputation and make it competitive at a time when the digitization of production has become a necessity.
The companies that will succeed in the fourth industrial revolution are those that will benefit from their customers’ hyper-connectivity. For the manufacturing industry, new opportunities are opening up: the cloud enables manufacturers to coordinate their global programs, gain speed of execution and better collaborate internally. The most innovative companies are going even further by embedding the entire ecosystem of partners with direct access to their manufacturing, production or supply chain.
Industry 4.0 is a major argument for the importance of digital transformation.
1. A 360° CRM view of the customer and new experiences
Sales, marketing and customer service are essential, not only to find new customers, but to keep your existing customers satisfied as well. The customer relationship management tool for manufacturing companies can help ensure that you are effective and useful in managing your complex relationships. This way you can acquire new customers, keep accurate customer information and provide the best service offering.
CRM allows you to increase the productivity, provide quality service, and increase sales while creating new experiences based on the 360° knowledge of your customers.
A good hierarchization of contacts, an intelligent distribution of accounts and an understanding of the sales funnel help to optimize the conversion. Artificial intelligence and predictive models now make it possible to suggest the best next actions to take in order to act on opportunities or risks without delay.
The benefits of a CRM for the manufacturing sector are mainly:
- Automation and prediction keep the focus on work with direct impacts on income. The triggering of alerts, workflow, forecasts, and above all the information you need at the right time allows you to satisfy all of your most critical tasks.
- Data access allows sales teams to have a complete view of your customers and prospects. They can see the evolution of emerging sales and take proactive actions based on those findings, always with a view of demand, inventory, schedules, and more.
- Analytical reports based on data mobilization enable new targeted marketing tactics. Campaigns are analyzed to tailor them for better ROI. The marketing team then knows the promotional mechanism and messages they should use to bring in new prospects.
- The ability to maximize your customer relationship is important, but so is the relationship you have with your supply chain. 360° knowledge of your customers, modern tools and omni-channel communication are now essential to create new experiences and build loyalty.
2. Connect the dots for better forecasts
The market shows that even in well-managed companies, between 20 and 30 % of inventory are dying. In addition, revenue leakage – when contracts are signed but the customer does not take the product on time – adds to the difficulties that manufacturers face.
However, sales teams and operations working in tandem can help reduce inventory traps.
The two main benefits that a CRM platform can bring are sales agreement management and account-based forecasting that will keep the different parts of your operations on the same wavelength.
Account-based forecasting provides manufacturers with a comprehensive view of their current business and future opportunities. This enables sales, finance, and operations teams to develop more accurate forecasts while breaking down internal silos.
3. Bring management closer to sales to reduce risk
In the manufacturing sector, margins are paramount. Margins are so tight that a minor change in the price list can have a huge impact on the revenue.
Most companies face a number of common challenges that limit sales potential and create situations such as those described above. All of these challenges result from a disconnect between the sales team and the enterprise management system.
Sales teams must have modern CRM and CPQ tools connected to the company’s ERP to have the latest information on products, prices and contracts to avoid inaccuracies in offers.
Processes must be controlled by an approval chain and workflows. Documents such as quotations must be automated and standardized to the maximum extent possible, even if their composition is complex. Electronic signatures and online method of payment also help to optimize the sales cycle.
4. Modern customer service to build loyalty and increase B2B sales
Customer service is not the prerogative of B2C. Customer service is rarely considered important in manufacturing industries, but it is just as important, if not more so, for the health of a company, because a loss of customers can translate into a considerable loss of revenue.
Indeed, a manufacturer who loses a distributor may, in turn, lose the hundreds or thousands of customers that the distributor brings in.
Manufacturing companies that do not pay attention to the growth potential that exists on the service side of their business jeopardize their entire business model.
Managing its customer service in real time from a single digital console linked to a 360° view of customers will not only teach how to facilitate problem resolution but also how to increase loyalty and adoption. Additionally, service is a lever for accelerating business. For example, in the watch industry, 70 % of cases solved by an agent lead to additional sales.
5. An efficient and digitally optimized field service
Field service management for manufacturing organizations is a booming business, and it’s not surprising. Thanks to the economics of experience, all customers – regardless of type – expect exceptional service and quick responses.
This applies to the machines in a company’s own production line, as well as to the equipment that runs its customers’ production lines.
To reduce machine downtime, manufacturers are now turning to Industry 4.0 technologies that offer advances such as Intelligent Predictive Maintenance and IoT to detect machine anomalies and send real-time alert notifications. As a result, service teams can intervene in an optimized manner according to the level of service expected. They are equipped with modern, connected applications that enable them to offer the best optimized service while simplifying investigative work and administrative tasks.
6. Acquisition of new customers through a digital journey
Customers and buyers in the manufacturing sector are more connected than ever, requiring new ways of interacting. To remain competitive in the face of changing customer expectations, manufacturers must change the way they sell.
Acquiring more customers and satisfying distributors through personalized and digital paths keeps you ahead of the curve and automates opportunity capture and event tracking.
Omni-channel, direct and automated marketing solutions help market and sell smarter by leveraging data to deliver the right message, to the right prospect, at the right time – and then use that data to create a personalized, coordinated customer journey across all marketing and sales touch points.
Beyond the customer journey, they provide real-time information and increase revenue through automation.
Find out about the tools, methods and concepts that help you with the implementation of Customer Journey Management in your company. Our white paper provides first steps and Best Practices for customer-centric processes.
7. Digital B2B commerce, a business imperative for the industry
Re-imagining commerce is the new business imperative for manufacturers. Customers know what it’s like to shop on B2C platforms. They expect a similar experience for business-to-business purchasing and it is not uncommon for B2B customers to be frustrated with their buying experience.
E-commerce coupled with a 360° view of the customer allows to create a personalized experience necessary for an optimized business-to-business commercial relationship.
It also allows the creation of personalized accounts with credits and purchase volumes as well as a catalog of selected products and a list of negotiated prices. Well-organized navigation, intelligent recommendations and promotions help maximize sales. One-click ordering or requesting a quote, re-order options and flexible payment methods make the act of purchasing easier. Finally, a good follow-up of deliveries allows to optimize the operational management of both parties.
All of these benefits translate into a fast, easy and seamless shopping experience for the customer.
ec4u helps you with your commerce needs, whether you want to implement your shop or optimize your commerce channels.
8. Subscription, for better membership and recurring revenues
The manufacturing sector is looking more and more to deploy new business models and the subscription economy represents a unique opportunity. Subscriptions allow companies to collect multiple and recurring payments from customers who need extended or follow-up access to certain services while building customer loyalty. Subscriptions are typically offered for services such as regular maintenance, warranty extensions, security analysis or monitoring of connected and disconnected machines and equipment.
Also, companies concerned about their investments will prefer to rent their equipment rather than purchase it.
But developing a subscription product or service requires the introduction of new business models. Today’s digital platforms make it possible to manage the complexity of these new models. Thus, the composition of the subscription offer, its marketing, the triggering of recurring events and the recognition of revenues can be fully automated.
9. Attract and retain more with a loyalty program
Offering a loyalty program is a great way to attract and retain more customers. This is especially true for manufacturing companies, whose target audience is made up of suppliers, wholesalers, retailers or distributors.
It is imperative to offer better services and at the same time to build customer loyalty. And, when you get loyal customers, you’ll make them the best ambassadors for your brand.
Offering a loyalty program allows the manufacturer to reward its customers who will feel emotionally connected to the brand and the products. According to one study, nearly 55 % of customers are willing to spend more based on a loyal relationship and 1-2-1 communication. Creating a customer community is another way to add value. A digital loyalty solution coupled with CRM makes it possible to simplify your reward programs and add value to them. Your customers will feel appreciated and your sales will be stimulated.
10. Orchestrate the value chain through system integration
Manufacturers have significantly improved value chain performance over the past 20 years, increasing industry productivity by 47 %. However, traditional methods are now producing diminishing returns. To address digital transformation initiatives and connect data to every point in the digital supply chain and commerce, leading manufacturers have developed integration points or micro-services (APIs/end-points).
Digital connectivity and data orchestration between designers, managers, workers, consumers and manufacturers will unleash enormous value and change the manufacturing landscape forever.
To respond to this evolution, manufacturers must fundamentally change the way they operate. Integration platforms (ETL/ESB) are now being deployed to deliver and execute more projects within tighter timeframes and budgets. Integration will also support the development of new services such as mobile, IoT or analytics.
In conclusion, Industry 4.0 is forcing manufacturers to rethink their digital journey in order to meet today’s key challenges and customer requirements.
Digital platforms that put the customer at the heart of your business and combine sales, service and marketing challenges in an integrated way help manufacturers meet the challenges of today and tomorrow.
For companies that have not yet begun this process, it is time to address these challenges by conducting a comprehensive assessment of their existing business processes, setting goals and identifying the gaps that will hinder the achievement of those goals.
ec4u has developed a strong expertise in the manufacturing industry. We partner with market-leading solutions such as Salesforce, whose solutions help turn trends into reality. By combining business understanding and technical expertise, we are a privileged and key partner in your transformation projects.
Find out more about our services on our info page.
Frédéric Demierre is Director Growth & Strategy at ec4u and specializes in cloud technology strategy and go-to-market. He has expertise in leading-edge strategy, product marketing, alliances, competitive G2 and solution development to drive strategic growth in Germany & Europe. His key markets include market leading cloud-based applications for customer engagement and infrastructure supporting data monetization.