And we still do make things.  The best goods in the world.  Relax for three days and be proud of your ingenuity and your work ethic.  Happy Labor Day, everyone.

ISM August 2010 Manufacturing Report on Business: Continued Growth

In the August 2010 Manufacturing ISM Report On Business®, Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee states, “Manufacturing activity continued at a very positive rate in August as the PMI rose slightly when compared to July. In terms of month-over-month improvement, the Production and Employment Indexes experienced the greatest gains, while new orders continued to grow but at a slightly slower rate. August represents the 13th consecutive month of growth in U.S. manufacturing.”

In addition to expansion in the manufacturing sector for the thirteenth consecutive month, the PMI also indicates growth in the overall economy for the sixteenth consecutive month. August PMI registered at 56.3%, an increase of 0.8% compared to July. Ore stated, “The past relationship between the PMI and the overall economy indicates that the average PMI for January through August (57.8 percent) corresponds to a 5.3 percent increase in real gross domestic product (GDP). In addition, if the PMI for August (56.3 percent) is annualized, it corresponds to a 4.8 percent increase in real GDP annually.”

The eleven manufacturing industries that reported growth in August include: Primary Metals; Apparel, Leather & Allied Products; Transportation Equipment; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Computer & Electronic Products; Paper Products; Chemical Products; Food, Beverage & Tobacco Products; and Printing & Related Support Activities. There were five industries, however, that reported contraction in August and include: Furniture & Related Products; Petroleum & Coal Products; Nonmetallic Mineral Products; Plastics & Rubber Products; and Machinery.

There was an increase in production in August by 2.9% from July, with a PMI registering at 59.9% compared with July’s 57%. Eleven industries reported growth in production during this past month, including Apparel, Leather & Allied Products; Primary Metals; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Paper Products; Transportation Equipment; Fabricated Metal Products; Machinery; Food, Beverage & Tobacco Products; Computer & Electronic Products; and Chemical Products. The four industries that reported a decrease in production during August include Petroleum & Coal Products; Nonmetallic Mineral Products; Furniture & Related Products; and Printing & Related Support Activities.

Chemical products shared good news, reporting that “international sales are especially strong. Domestic business is solid.” Primary Metals gave an equally good report stating, “Orders and business still strong.” Although having reported an increase in production for August, Computer & Electronic Parts note that “large customers [are] reducing pull rates for production.”

Overall things continue to head in the right direction, just not at the rate many manufacturers would have hoped for moving into fourth quarter. The biggest challenge right now remains the acquisition of new orders. Acquiring and nurturing leads will most likely be a primary focus for industries as they set the stage for a faster rate of growth heading into 2011.

For more information about nurturing leads, read the Industrial Web Talk Newsletter article Using Email Marketing to Nurture Leads. If you missed these posts, you may also find some helpful food for thought to get you thinking differently about business development for the new year: How to Make sales When the Usual Isn’t Working: B&N’s Story and Be First or Be Different: How to Stimulate Your Targeted Buyers’ Spending. Call us at Industrial Web Solutions if you think you’d like to work with a marketing consultant 800-399-9859.

Same Target Market, New Approach

I feel compelled to continue on the topic of finding new ways to generate revenue when your usual stream is dry. In my last post I talked about the need to Be First or Be Different: How to Stimulate Your Targeted Buyers’ Spending. Innovation is always a good thing. It doesn’t necessarily mean introducing a new product or service but it may. And it may even mean developing a niche within your bigger target market.

Take Barnes and Noble, for example. According to a report by Lauren Indvik, “Nook Helps Drive 21% Increase in Revenue for Barnes & Noble,” the company’s in-store sales – its usual revenue stream – are continuing to decline, at “a loss of 62.5 million for its first fiscal quarter ending July 31^st.” Ouch! However, about 9 months ago the company introduced its portable electronic e-reader device the Nook, of which I am a big fan, and their online sales have “jumped 42% to $145 million year-over-year, exceeding the company’s own expectations.” The company also reports that this revenue stream shows signs of continuing growth, with e-book sales accelerating “week-over-week.” B&N’s Chairman Leonard Riggio says Nook owners “have increased their spending with the bookseller by 17%” and that about “a quarter of these device owners had never before purchased anything from the company’s website.”

Still representative of the products they typically sell, B&N’s Nook presents its target audience of readers with a new way to enjoy their pastime that is convenient, easy-to-use, and cost effective (book prices for new releases range from $9.99 and above; older books are either free or cost from .99 cents to $5.99). So what’s the lesson here? When your usual revenue stream isn’t producing for you, it is necessary to conduct some research to understand what you could introduce, whether it is a product, a service, or a combination of both, that will effectively stimulate your target audience groups to spend. For B&N it is the Nook, which successfully attracts their usual target audience and stimulates them to spend again and again by giving them a good reason to do so.

Somewhat relevant addendum…..

I am a big fan of the Nook. I read a lot. But I am very busy and do not have the time to drive to B&N and hang out like I used to do. Because the unit is portable and makes it easy to acquire books, I tend to do so with more frequency. For example, within 10 days, I downloaded from B&N and read all three of Stieg Larsson’s novels (which I highly recommend because he is an intelligent and brilliant story teller – look up “Girl With the Dragon Tattoo”).  

If you need some help coming up with good ways to develop new revenue streams, our business development and marketing team is ready to work with you.

But the point is, really, that if you’re ‘first,’ you set the expectation of the marketplace. Apple, in general, has been able to tap into the tech-greedy appetites of consumers by being first to introduce a number of personal computing and communications devices. Now all the other electronics and computing developers are trying to catch up, as it were, and take some of that market away from Apple. And Apple, in turn, is homing in on other markets too, such as Amazon.com’s Kindle.  A recent Associated Press article, Amazon says latest Kindle is its fastest selling, explains how Amazon.com not only upgraded its product but also lowered its price to stave off competition from Apple’s iPad e-reader.

It’s an aggressively competitive marketplace right now, with everyone vying for a share of what the lion has! In order to turn a profit and keep investors interested, companies are working hard to anticipate what will be popular among consumers.

For B2B companies the market is even tougher and competition even stiffer. Machine manufacturers, for example, are struggling to make ends meet as demand has all but disappeared because companies are not investing capital in upgrading machinery. What’s to be done? How can one be innovative if nothing is moving at all? We all know that B2B has different challenges from B2C. Consumers may be fickle or tightwads at times but they can be motivated and persuaded by tactics promoting one’s desire based on personal wants that are miraculously converted into perceived needs. The business marketplace doesn’t work like that. Companies have to justify each expense on criteria that encompass a great deal more than “I want it.”

Conducting market research to uncover the immediate and anticipated needs of your targeted buyer companies may shed some light on what needs to be done to stimulate their spending. Armed with the information you learned from your research, try one of these innovation approaches: 1) identify something they used in the past and were successful with and present a solution with a new twist on an accepted method/product or 2) develop something so completely different that you are establishing a completely new expectation for a totally different approach.

Consider working with a marketing and business development professional if you need fresh ideas or your ideas just aren’t working. There are ways for you to stimulate spending among your targeted buyer groups by being first or being different. Even though today’s marketplace is challenging, if your targeted buyers are still in business, you can be sure they are still spending.

The idea is to tell a story that is relevant and relatable to the reader. He must be able to identify not only with the elements of the story but directly with the protagonist. This makes the story very personal to the reader. Heidi tells the story of the JetBlue steward who had had enough of his job and let himself off of the plane by exiting on one of the inflatable slides. Garnering more than 200,000 fans on Facebook who could identify with how the steward felt, the man has acquired the kind of following most companies only dream about.

The point is that you must provide content that:

1)      Is of current interest or relevance to your readers

2)      Taps into their passions

3)      Tells a story with a protagonist they can relate to

4)      Is easy to share

5)      And demonstrates your understanding of how they feel and what they need

For those of you who have composed case studies, you will remember how you related a story about a way in which you helped a client solve a particular problem. You wrote it so that your targeted readers could identify with the problem the company in your story was having. You filled it with emotional content through the use of customer quotes, taking your readers on both an emotional and educational journey. You helped them to feel a certain way about your company. Well, social media can be used in much the same way, only now your readers can interact with one another.