Chinese Manufacturing Moving to the US – More Competition or More Opportunity?

23 Mar

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A reversal of fortunes for the US economy over the Christmas holidays: Chinese manufacturing billionaire Cao Dewang publicly declared that he would be moving operations from China into the US. This would be interesting in and of itself, but the reasoning behind the move is the true attention grab. Dewang is actually moving to the US to cut costs. As much as domestic media plays up the message of US business culture as expensive, why would China move in instead of staying put? Is there opportunity that media has overlooked?

The Facts

Cao Dewang is the chairman of Fuyao Glass, a glass manufacturing company that produces for many of the top auto companies in the world. The company will be moving to an old Ohio factory that originally belonged to General Motors. Dewang stated that rising taxes in China was the primary reason for the move. Although many companies have been moving from the US to China for the cheap labor costs and lax regulatory structure, Dewang actually called out the “value added” tax as so expensive as to negate all of those advantages.

Dewang noted that he would be able to save a substantial amount of money because of the cheap cost of land and energy in the US. He also mentioned other incentives that he received without noting what they were, but Ohio has a history of providing tax incentives to international businesses of a certain scale.

The Takeaway

Domestic media in the US addresses the low cost of labor in China, creating the impression that this is the number one reason that China is “winning the tug of war” between the US and China for top companies. The truth is actually more complex, as Dewang made clear in his interviews with US and Chinese media. Labor costs are only one aspect of business, with the other costs of land, distribution and energy becoming more prevalent with every new business generation.

New policies in the US moving forward created specifically to compete with Chinese tax structure may cause China to lose its edge in the manufacturing market, Dewang perused. If there was already an advantage in land and energy, tax incentives may really be all that the US needs to compete. The much maligned US business tax rates that are often quoted by media and politicians are true as a baseline; however, savvy businesspeople never end up paying this rate because of the loopholes in the US tax law.

New Opportunities for American Businesspeople at Home?

Now that a story big enough has broken through mainstream domestic media to bring out the truth about the cost of doing business, entrepreneurs should take real stock of their opportunities. As Dewang noted, the trend of China imposing huge sanctions on its largest businesses did not start yesterday. Land in the flyover states of America has always been cheap, and the recent business crises in Middle America (Detroit, Flint, etc.) has made this land even cheaper. 

The real opportunity is only engaged when business leaders actually do the numbers, rather than depending on media for its assessment of business costs. Anyone who listens to the propaganda of US tax rates will certainly be scared away from domestic opportunities. However, when the actual costs are added up versus the opportunities provided in each country, the US may be more competitive than anyone wants to let on, at least when compared with China today.

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5 Doable Steps to Maximize CMO B2B Engagement

16 Mar

 

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Your sales team is doing its job, but you have yet to land the whale that will take your profits to the next level. Higher level communications tend to get big projects done with less bureaucracy. Here are 5 steps you can take to maximize communications between your Chief Marketing Office (CMO) and the customers that really matter.

1. Staying Agile

Strategic leaders within a company have the ability to look beyond immediate targets and short-term objectives. You can land the whale by simply staying on your toes in terms of industry trends. Instead of responding to hot RFPs for companies that are high in demand, you can do business with a strategic partner who will provide you profits far down the line. You spend less because you are doing your deals in the off-season, and your partner is validated because you recognized long-term potential instead of following short-term trends.

2. Continuous Relationship Building

Your sales team should have no problem initiating contact with their counterparts across companies if the C-Suite has already made an acquaintance. In contrast with a low-level salesperson, a CMO taking a potential partner executive out for a round of golf creates relationships throughout the entire chain of command. In effect, the CMO becomes the lead salesperson rather than the “man behind the curtain.”

3. Creating a Humanized Entity

You can save tens of thousands of dollars in marketing spend by creating a humanized relationship across companies through your CMO. The decision makers from other companies will not have to view your high quality advertisements in order to understand what your company is about. They got that information firsthand from your CMO during the trade show mixer.

If there are no industry events that give you an excuse to put a human face on your operations, make one. CMO is also head of PR, even if you have outsourced PR to a third-party specialist. Get in their business to make business.

4. Becoming the Organizational Storyteller

As the CMO, you have license to talk to people about your company in a way that no one else does. You can look at the Chief Marketing Officer as the Head Storytelling Officer if you have trouble remembering exactly what you are supposed to be doing out in the field. Your future partners want to understand how your company connects the dots internally and as it moves into its partnerships. As the CMO, you are the link between R&D, marketing, distribution and IT that can explain all of these connections with a human touch.

5. Challenge Your Industry

No one knows better than you what your company can accomplish. If you extend your position as leader of the company into your industry, you can set the challenges that potential vendors and partners respond to. In essence, you are creating a problem that you are the best company to solve.

Speaking engagements at industry events are always a great way to direct the trends of your industry culture in an advantageous direction. However, you can also do this on an individual basis, because you have access to all of the decision-makers in your industry. Do not waste your time with them, but let them know about how your company is moving your industry forward and why they need to get on board today. Once you have set this tone, your salespeople can work out the details later.

No less than Xerox CMO John Kennedy has stated on record that B2B marketing is more about personality than ever. Use the above tips to arm your CMO for the front lines, because the C-suite has to lead from the front in this business generation!

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The Importance of Marketing Performance Management for B2B Companies

13 Mar

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Having a robust marketing performance management (MPM) campaign is no longer a luxury; when it comes to improving the efficiency of your team, MPM is a go-to strategy. The savviest companies are making MPM a completely separate entity within their offices and encouraging collaboration between  this specialist and the more traditional members of the marketing team.

Companies that sell in the B2B realm should take special note of the MPM trend. As a business that looks to scale and high performance standards, MPM is especially important. Here’s why.

Your Budget Is Always Under Attack

There is a reason that marketing is always the first budget to get cut in a crisis: This is the department that usually has the most trouble justifying its expenditures. MPM turns this stereotype on its head, combining the rigor of a performance driven organization with the precision of a business development budget expertise.

With an MPM specialist, you now have accountability for your expenditures versus the results they brought in. Because MPM is responsible for a long-term strategy, you will be able to see when to divert funds and when to let a campaign ride if its returns are not immediate.

Aggregating the Most Important Aspects of Marketing and Operations

Your marketing and operations do not have to clash constantly. In a traditional company, the operations side is always trying to reduce the budget for noncritical expenditures or cash outlays without a direct revenue return. Marketing is always trying to expand this budget, because all revenues that could be attributed to marketing are not necessarily direct, and it is quite easy to frame any expense from marketing as noncritical.

By combining financial expertise, experience with analytics and IT under one discipline, MPM finally brings together the creative aspects of marketing with the justification for the existence of any creative outlay. By placing IT, finance and analytics under the same department umbrella, you also reduce bloat in your company that would come from trying to coordinate these three disciplines.

Building Internal Relationships Crystallizes Business Vision

To move product in the B2B space, your clients need to know exactly who you are. In order to put forth a clear vision in the market, you must synchronize your vision within your company first. MPM is the perfect discipline to accomplish this.

Because all of the most important aspects of marketing and operations are now represented in a single department, that department can now serve as a hub for outreach. Finance and IT department heads now have more confidence that marketing understands their language. Plans can be presented to the C-Suite with a new confidence, giving executives a clear picture to communicate with large clients and profit shaping deals.

Although there is no consistent MPM job description just yet, you should take this as an advantage. Hiring an MPM specialist or simply introducing the concept into your company without Borders means that you can customize the role to your needs. The bottom line is increased long-term-efficiency for your marketing department, drawing streamlined and precise conclusions for immediately actionable solutions from aggregated data.

Your creative vision no longer has to be at odds with your number crunchers and in the B2B space, it can’t be. Take the time to ensure that MPM becomes a vital part of your marketing department with direct access to your CMO.

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5 Ways to Ensure You’re Using Your Creatives Effectively

9 Mar

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hillmanGuest Contributor: Matt Hillman
Creative Director

There’s a misnomer that “creative types” are all sullen, unrealistic artists—or worse, that they don’t understand or care about the business. As a result, it’s all too easy to dismiss their potential contributions.

A lot of the misperception around marketing creatives is actually founded in reality. Many writers and designers are highly intuitive types, utilizing a form of information processing found in only ¼ of the general population. Where most people see things literally and as a collection of facts—that’s a white, ceramic, 12-ounce coffee cup—creatives instead see symbols and metaphor. It’s not simply a coffee cup, but a vessel, container, start to the day, source of energy, handle, hammer, hand-warmer, flower pot, second-stage of a Saturn V rocket, and the list goes on.

This kind of lateral thinking can be powerful, making seemingly random associations and asking “what if.” It’s also potentially confusing to those who don’t harness it to the same degree. As a result, creative types are seen as out of touch with the world around them, often appearing as aloof, clumsy, and distracted. But when you’re looking for a way to break through the clutter, to gain a new perspective, that’s where these intuitive and creative types can shine.

Here are 5 ways to make sure you’re getting the most out of the creatives on your teams:

1. Have Defined Objectives

The easiest way to waste time is to brainstorm or concept without a clear purpose. Some managers will try to “not stifle creativity” and let the conversation roam. Remember that for creatives, one idea quickly leads to another, and without an objective to focus the effort, there’s no telling how far off-target you’ll end up. So if you need a solution to boost click-thru, say it; if you need it to increase sales by 35%, lay that out there. Those become the sun that the ideas will orbit.

2.Provide All the Inputs

Don’t be afraid to give creative types lots of relevant information—that’s the framework for the ideation process. And provide it early. Think of it as baking a cake: you can’t mix everything, put the cake in the oven, and then just add the salt at the end and expect it to be good. All the elements need to come together at the beginning so they can be accounted for in the final result. What may seem like a small omission early could have a major impact later on. So if you have inputs, share them.

3. Give It Time

Creativity isn’t just the ability to immediately spit out ideas. More often than not, it’s a process, and from the outside, it appears to involve a lot of things that don’t look like problem solving. Creative types observe, daydream, read, consider, walk around, change their perspectives, argue both sides—all part of the process that helps them drive to solutions. Be sure to allow them time to explore the question before providing their answer.

4. Trust There’s a Reason

In nearly a quarter century of work in the creative field, I’ve never myself or had another creative offer a solution solely because it’s trendy or “cool.” Creatives are problem solvers and if they offer an idea, it’s because they believe it fills a need. Why that image? Why that headline? Chances are there’s more to it than meets the eye, so ask if you’re not sure of the rationale—just be ready for a metaphorical answer vs. a literal one.

 5. Prepare for Discomfort

As someone wise put it: If you’re afraid of the answers, don’t ask the questions. Creatives view the world differently, so if you’re sincerely wanting more of the status quo, you’re going to be disappointed by what they bring you. There’s a real chance what they propose will make you uncomfortable—that’s a good thing! What’s comfortable is ordinary. Every great innovation had a moment when someone could have said no but was smart enough to ignore the discomfort and give it a try.

Of course, creativity is messy, so there’s no guarantee that using these tips will help your team nail the target every time, but they will certainly stack the deck in your favor, increasing efficiency as well as results. Besides, understanding the best ways to utilize your marketing creative team is its own innovative step in the right direction.

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AdWords Expanded Text Ads: Post-Deadline Update

7 Mar

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CoreyMorrisGuest Contributor: Corey Morris
Director of Digital Strategy

With the deadline now passed for migration to expanded text ads in Google AdWords, we can look back at the big push to get to the new format and what it’s impact has been. (Want background? Check out my previous post on what they are and the transition) The ad format update was a big change for advertisers who managed large campaigns, and even more daunting for marketing agencies (like us) who manage thousands of ad groups across all our clients. This was just one of the big updates Google made as it officially went “mobile-first” in how it approaches the web. Expanded text ads didn’t change the world, but they did have an impact on advertisers through pushing us to adopt a new standard and to get hands on within our campaigns at a granular level.

 The new standard isn’t really that surprising. While it was big news at the time, the deadline for converting ads passed with little fanfare. We are continuing to see performance trends more closely linked to the early 2016 update Google made removing ads from the right rail putting all of the focus on a single column of ad and organic search results content. In cases where we have ads in the first through third ad slots on the page when they appear at the top of the page, we’re seeing increased click through rates and lead generation performance; however, when ads fall to the fourth slot (and sometimes even the second) that appears at the bottom of the page after the organic search results, engagement drops off dramatically.

 A benefit for marketers who are mostly focus on both PPC and SEO is that we saw organic traffic increase. The increases ranged from 30-80% on average, and some of that can be attributed to there being less noise above the fold on the search results page. In the long run, organic traffic is often cheaper (but don’t always assume so).

 Our conclusion is that expanded text ads are a good thing. They offer the opportunity to take up more real estate [and when ads are in the top few slots at the top of the page, can really attract attention]. Couple that with the ad extensions available and it sometimes isn’t fair to the long-entrenched top organic search results below the ads; however, advertisers pay a premium to be on those top slots and that is something that won’t change any time soon. We must work harder and smarter to try to find the right mix of terms that fit our ROI equation for being in those top slots. The big takeaway is that more is better when it comes to exposure on the search results page and the expanded text ads update allows us to have it if we’re willing to invest.

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