We work with a number of industries in the German speaking market. None has changed more strongly and more times than manufacturing. In fact, our 2021, 2022, and 2023 analysis had Manufacturing as our client’s most productive industry segment and good chance it will be their 2024 winner as well.
What is going on?
Traditionally, manufacturing was based on long term continuous improvement and EU manufacturing had weak investment budgets compared to their meteoric Asian competitors. This meant slow, conservative buying cycles from proven suppliers. Like other industries, Covid upended long term budgeting and allowed immediate “war time” buying processes. This continued as EU manufacturing went through supply chain disruptions, input cost inflation, energy instability with Ukraine war impacts, and now Palestine/Israel affecting shipping. The constant here is that there is no stability for EU manufacturing.
Meanwhile, other industries like banking or retail have returned to ‘normal’ after the single (covid) shock to their industry. EU manufacturing has still not returned to “normal”. There are also forces moving in positive directions as well. The shift from China made EU manufacturing cool again creating an environment where investment could flow a bit more freely. The board meetings of these once boring manufacturing companies are now full of opportunities and threats that were not even on their risk mitigation plans or upside forecast a few years earlier.
Here are our tips how to sell to EU manufacturing now
With everything constantly changing in EU manufacturing, this means nearly all long term spending plans are still “on hold”, budgets have low rigidity, and most purchases that will be made in the next 12 months are likely to be from suppliers they have never worked with before.
- Forget long term ROI! There is no attention span for these long term optimizations. High chance these become the zombie deals that never reach conclusion.
- Find a way to make your product fast deployment. 30% of the value in 60days is soooo much more attractive than 80% of a problem in 12 months even if the ROI would suggest otherwise.
- Solve problems that are getting board attention. Right now, executive management teams have a complete loss of visibility on costs, revenue, schedules, material availability, factory capacity, staffing, and shipping….. That same technology that might otherwise help with optimizing staffing should now be repurposed to help adapt to staffing shortages and high volatility planning. BI solutions that might help optimize costs now can be repositioned to help management know if the overall incoming material costs should impact price increases to their end customers.
- However, still expect long sales cycles and complex buying processes compared to other industries.
In short, don’t sell house insulation to someone who is experiencing a flood. Find a way that your insulation can keep people warm on the top floor when you can’t run the electricity due to water safety.