America has done a good job of solving internal manufacturing problems, improving quality, and reducing waste and costs. These internal programs have kept American manufacturing in the game. But there is a problem. Manufacturing isn't growing in terms of factories, % of GDP, employees, or sales revenue.

Staying with current marketing and sales strategies is not going to increase sales. The old paradigm of being loyal to your customer, depending on a few large customers, and focusing all of your resources on improving your operational systems to reduce cost and waste, are not working.

If you examine the customer list of most manufacturers you will find the 80/20 rule applies. In other words, 20% of their customers account for 80% of their sales volume. In fact, it is common for only 10% of the customers to account for most of the smaller supplier manufacturer's sales volume.

Needless to say, the profitability of these customers becomes a very serious issue. For the last 20 years, customers up and down the supply chain have been trying to reduce costs to compete in a global economy. The pressure from many of these larger customers has forced price/cost reductions onto their suppliers. But depending on a few customers for your existence is a dangerous game. They may decide to offshore their products, use a foreign supplier, or increase their pressure to lower prices.


The real answer is to diversify and find new customers and markets. Finding new customers and markets means taking an aggressive approach to expanding the number of customers in existing markets and also finding new markets. It usually requires expanding sales out of state and developing some method of generating inquiries. It will require new methods for prospecting and sometimes new sales channels or in some cases (like job shops) hiring the first outside sales person. This will, in most cases, automatically lead to changes in products and services.