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Generating sales in lean times.

Inevitably, when our foundry clients begin feeling the effects of a recession, they request marketing studies to generate sales. We usually begin working with them by discussing their marketing organization. How productive is it? How much does it cost to bring in a new job or a new customer? How do they make money?

"Wait," they say. "All we want to do is secure some additional business. Sales are down and the plant is underutilized. We have capacity we want to fill with profitable work. And we don't have much money to spend, so we're not interested in getting into markets that require new equipment purchases."

Where to Begin?

Confronted with this we discuss with the company's management a few important points. First, finding and securing new customers is a sales function, not a marketing function. All the company can realistically expect from an objective marketing study is some insight into who those new customers might be, and what the company is going to have to do to get their business.

We encourage foundries to trust their instincts and knowledge of their markets. Many foundries have the notion that, despite the best efforts of their sales force, they are tapping only a small share of the work that is available and that there are some big potential customers out there, untapped.

Our experience suggests that while the company may be correct about more business being available, they are often wrong about where to find it. Usually, the foundry knows who their major customers should be, but fail to pursue the business because of past refusals, personality conflicts or mistaken ideas of what the prospective buyers need.

The third problem many foundries have--and this is by no means the first time this has been said--is that they think their business is to make castings. Realistically the idea is to make money.

What does this last point imply? Does it not imply that the goal is securing profitable work, not just any work? And, if this is true, does that not suggest that we begin by looking at where and how the foundry makes money?

Market-wise Companies

What do the market-wise companies look like? How do they approach their markets and customers?

First, market-wise companies know their strong points. Primarily, this is where profit originates. The company's strengths might be obvious, usually they are not. Rarely are they in the production area. Foundry technology is, in most respects, mature. Generally speaking, foundries tend to make castings in the same way they have for years with some minor changes.

An objective look at how business is conducted might be key here, especially if the reviewer understands and offers constructive comments on a variety of aspects of the operation other than the production floor. The foundry will run more profitably and effectively if they can identify and solicit new business and handle inquiries, quotes, scheduling and customer service. The foundry that produces and delivers castings faster than the competition (because of scheduling and other nonproduction systems in place) will get into a new market or customer relationship that might prove to be profitable--and might not involve any changes to the physical plant.

Second, the successful companies know how to capitalize on their strengths. One essential part of this process is making sure the sales people know what these key strengths and capabilities are, and how best to present them to current and prospective customers.

Many companies seem to forget that sales representatives should develop their own leads. The most essential information the company supplies them with is "product knowledge." Most good sales people known their territories--and who is in the market.

It is clearly in the company's best interest to find out what their sales representatives know and to gather information from them regularly. The companies that do this well are almost inevitably better positioned in the marketplace than those that do not. Yet, it is nothing short of amazing how many companies neglect--even completely ignore--this vital resource.

Third, the successful companies tend to be those that already have systems in place and concentrate on working with the system. Their salespeople are on the lookout for opportunities for today as well as for the future. They know that the company's marketing and general management will listen to them. Marketing is continually try to develop customers, in terms of product characteristics and other customer requirements. All involved have a good idea of what the "ideal customer" looks like.

A Time-tested Process

In response to the requests presented at the beginning of this article, it should be clear that the best answer is not obtaining a list of names and numbers for cold calling, but instead a process which has been put in place overtime. One which depends on the company having internalized the following assumptions and understandings:

* Our business is to be profitable.

* Ideal customers should fit this profile.

* What the customer wants may not be exactly what we have to offer.

* All employees that deal with customers have insight into what will make us a sought-after supplier.

* We transform useful insights into policies that make sense for the future.
COPYRIGHT 1991 American Foundry Society, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Author:Gallagher, Michael J.
Publication:Modern Casting
Date:Nov 1, 1991
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