Manufacturing Marketing Metrics, Mindset, Industrial Sales & Quality

Ed Marsh | Apr 5, 2024

Tl;dr - That we measure and manage production and operations in fundamentally different ways than manufacturing marketing and industrial sales is alarming. Let's pause and look objectively at our contradictory mindsets, and then gradually improve our approach to revenue growth.

% Defects & OEE vs. Vanity Marketing Metrics

How do we measure manufacturing and operational quality?

Every company, function, and situation will have its own specifics (read more here about Goodhart's Law, Amazon's Weekly Business Review, and metric selection), but generally, KPIs focus on defects measured as a percent of total and overall equipment efficiency.

These recognize that there's a significant asymmetry between the costs of low quality vs. high quality. Whatever denominator exists (quality output) is practically irrelevant once the numerator hits a certain percentage. The implications of dealing with a relatively small number become material.

Compare that to how we measure "success" with manufacturing marketing metrics.

We talk about:

  • website visits, but rarely look deeply at bounce rates of >80% and time on page of <1 min (often the equivalent of defective visits)
  • keyword rankings, but rarely look at whether they're relevant to our ideal buyer and the pre-awareness, awareness, consideration, decision journey
  • lead count, but rarely consider the percentage of leads that convert to meetings, qualified opportunities, closed/won deals, and later, reorders
  • reps' dollars contributed to the pipeline, but rarely the close percentage, profit margin, sales cycle and stage in process where they get stuck
  • engagement with social posts, but rarely the number of qualified leads that result
  • number of chatbot conversations, but rarely the number that convert to a live conversation

These are just examples but think about the analog in manufacturing or operations.

manufacturing-marketing-metrics-and-industrial-sales-KPIsWhat if:

  • we shipped 1,500 spare parts orders yesterday! (but ignore the fact that 300 had the wrong part, only 200 were complete, 50 were never invoiced, 75 shipped to the wrong address, and 150 had backorders that were dropped balls) - is that 1,500 shipments (the way we track manufacturing marketing metrics) or actually a defect rate of 52% (775/1500)??!!
  • we commissioned 17 new systems last quarter! (but ignore the fact that application questionnaires missed key facts in 5 instances which mean that we have technicians tied up in dissatisfied plants for months, at significant cost, while break/fix service calls are delayed)
  • our component suppliers delivered >1,000 components last week! (but ignore that 20% were late, causing us significant workflow disruption, 10% were defective, pushing back critical lead times, and 17% were out of spec.)

Do you see what's going on here?

You would never tolerate this sort of production and operations inefficiency. Everything would be put on emergency hold to identify root causes and find solutions. People would be fired.

But somehow we overlook it (even celebrate high defect rates) in industrial marketing and capital equipment sales.

Accountability to Our Values

Is marketing the same as production? No. Of course not.

Each of us is an individual with personality, preferences, and biases. And each of us is influenced by our circumstances, priorities, colleagues, and daily deadlines. We're not the product of machining centers.

And neither are our prospects.

It's impossible to expect the same precision.

But we're not talking about degrees or orders of magnitude here. We're talking about a fundamentally contradictory mindset. The fact that we would hold one function and team to one set of philosophical guidelines and yet subject a different team to an entirely different (contradictory and incompatible) set is a poor reflection on management and leadership.

If you are a company that's committed to quality and efficiency, then that needs to pervade all your activities.

Applying a Quality and Efficiency Mindset to Manufacturing Marketing and Industrial Sales

How can we begin to apply best practices from manufacturing production and operations to our revenue growth functions?

The first step is clearly acknowledging the dissonance. That needs to be followed by a strategic adjustment by owners, investors and senior management. 

This can't just be a deck or conference room poster. This must be a mindset and cultural change, reinforced deliberately in every meeting.

We can follow the same playbook that we used 20-30 years ago to improve production and quality. When we start measuring, we can run iterative PDCA cycles.

As we know from production, measurement and accountability are critical. If leads aren't followed up on, the process breaks down. If CRM isn't used or marketing automation isn't in place and tracking properly, then there's no basis for estimating the gap or measuring progress.

Once measurement and accountability are in place, then improvements can be planned. A couple of simple examples include:

  • activity levels tracked against targets
  • sales manager coaching and creation of "fixtures" to aid their reps' consistent execution
  • consistent (re)qualification of sales opportunities using a scorecard
  • keyword research conducted against qualitative insights into buyer behaviors
  • tracking of CPL (cost/lead), CAC (customer acquisition cost), LTV (lifetime value) are measured for each lead-source and investments adjusted accordingly

Overall Revenue Effectiveness™ Framework

This is a journey.

A long journey for sure.

But a journey that starts with a stark realization, explicit decision, and determination.

If you're tired of unpredictability in forecasts and revenue growth, then maybe it's time.

And when it's time, the good news is that there's a framework to translate a seemingly massive, likely overwhelming, and confusing undertaking into a set of discrete tasks that can be prioritized and resourced.

That's what my ORE framework helps companies do.