Question

Topic: Research/Metrics

Where Are Manufacturers Investing Marketing $?

Posted by Anonymous on 250 Points
We are in the early stages of unbundling our service offering and I'm looking for insight into where our target market, which if manufacturers, are spending their marketing dollars and what sort of investment they're making on them.

We currently offer a high priced brand development process as our core deliverable for upwards of $150,000. We're learning that a sizable portion of our target market is more inclined to spending more in the range of $10,000-$20,000 on an initial, less strategic engagement. So we are looking at unbundling our complete offering and can probably come up with 12-15 different diagnostics/audits/workshops that would appeal to our market.

Before we do that we want to gain some insight into what they are spending their marketing dollars on and approximately how big of an investment they're making in those areas. Examples might be website development, digital marketing, messaging, positioning, employer branding for recruitment and retention, etc...

What resources can you provide or what direction can you point me in to find the information I'm looking for?
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RESPONSES

  • Posted by mgoodman on Accepted
    It is unlikely we can come up with reliable estimates for you. That's because (1) projects tend to expand/creep, (2) metrics are fuzzy (when they even exist), and (3) most clients don't break their marketing needs down to component parts.

    You might need to conduct some qualitative research among your target audience to get a feel for how they behave, but quantitative information is not likely to be reliable/actionable.

    Compounding the problem is the fact that not all clients behave the same way. Some are very savvy, while others are not. Some are strategic, while others are not. Some are Sales-driven, while others are not. Some are willing to invest in process improvement, while others are not. Etc.
  • Posted by Peter (henna gaijin) on Accepted
    Might be worth taking this from a different direction. Rather than trying to break apart your offering into lower price-point options which you feel would be more acceptable to a client, how about instead focusing on getting data for the parts and whole of your offering on what benefits it provides?

    Even if you break the example $150k down into separate $10k pieces, it is still a leap of faith for the client to pay you the $10k. They are doing that so they can get a benefit which should exceed what they pay. Yes, it is easier for them to pay the $10kthan $150 to test, but if instead you could figure out how to show what benefit they would get from spending money with you (added sales, decreased costs, or the like), it wold make the sales process easier at any price point.

    Granted, this is not easy to do. Likely involves looking at other clients and seeing what you can figure out about how your work impacted their growth and then using them as references/testimonials, rather than being able to say to a new client that if they spend $100k, you will increase sales by $1million. But any steps towards this would make your closing process so much easier to do.
  • Posted by Gary Bloomer on Member
    Hi Denis,

    How much are manufacturers spending on marketing?

    Dunno.

    But possibly 1%, that is, according to this article:

    https://smallbiztrends.com/2018/04/much-small-businesses-spend-on-advertisi...

    In this article the spend is about $400 a month, but that may not be true for manufacotruers:

    https://www.entrepreneur.com/article/289364

    Then there's this article that gives an overview of the numbers of small small businesses (those making less that $250,000 a year), of which there are lots.

    https://www.businessknowhow.com/money/earn.htm

    Those people need help too.

    In terms of what manufacturers are spending, the only way to find out is to ask them: either by phone, or by direct mail, or by going out and banging on doors.

    This link might help:

    http://www.nam.org/Data-and-Reports/State-Manufacturing-Data/

    What services might you offer these smaller value clients?

    How many more clients might be willing to pay less than $5,000 ... even down to $1,000 or even $500 a year for good advice?

  • Posted by mgoodman on Accepted
    Have you considered seeking outside professional help with this change in strategic direction? You are not the first company to face this dilemma, and you can get valuable input from outside expertise. The cost (professional fees) will almost certainly be a lot less than the benefit.
  • Posted by Gary Bloomer on Member
    Hmmm ...

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