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Specialty metal stampingIndustrial marketing success storyA client specializing in metal stamping approached Koch Group to help them land the "last six accounts in the area" that could purchase their products. Our consultants identified over 1,000 potential regional target accounts and assisted the client to develop a market action plan that focused on direct contact and qualifying programs. Not only have sales increased 25%, but also at the same time, the company has replaced over $0.5 million in lost low margin business with an equal amount of higher margin sales. SITUATIONLocation: Midwest The client company is a family-owned business with the second generation in operating control and partial ownership. The first generation has majority financial ownership and management oversight responsibility. The company had been operating in a reactive mode for past 5 years. New business was primarily developed from referral or quote responses. Virtually no profits had been generated during these years. No market research activities had been performed to identify potential markets, customers, and applications. The company accepted jobs it could not run economically to keep the shop busy. In late 2000, a major competitor was purchased by an investment group that decided to no longer serve small and mid-sized customers.
ACTIONKoch Group conducted field and desk market research to identify, evaluate, and then qualify market opportunities. We developed a sales action plan to target specific identified market opportunities based on our conducted market research and analysis. We targeted identified opportunities for the client's proactive, direct sales efforts. The company president had implemented about half the plan components. In response to the major competitor's decision to no longer service small and mid-sized accounts, we decided to actively pursue the business they abandoned. We prepared a letter stating the current market facts and presenting our client as the solution to their supply problem. We mailed the letter to 28 accounts that would likely be negatively impacted by the competitor's decision. The president then followed up by phone and, when appropriate, arranged in-person sales calls.
RESULTSThe company was able to replace over $600,000 of low margin business with higher margin work as a result of the opportunities generated. Within 6 months, sales to newly targeted accounts had reached $500,000, a 25% sales increase. The client added twelve (12) new key customers that were all identified and targeted as a result of the market research and planning. Management indicated sales increased another $500,000 - an incremental 20% increase - by continuing to implement scheduled action plan activities over the short run. During the past six years, the client has grown from $2 million to over $8 million (400%) using the concepts provided to him and implemented by him. Ownership now has the confidence and ability to "pick" their next customers and continues to improve both sales and profitability. Next: Trailer Manufacturing >> If you would like more information about our industrial marketing services for manufacturers, please use our contact form or email us at info@kochgroup.com.
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