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The Guide to Marketing Capital Equipment from Modern Marketing Partners shares four aspects of capital equipment purchasing and three marketing nuances. The guide also shares a capital equipment …

The Guide to Marketing Capital Equipment from Modern Marketing Partners shares four aspects of capital equipment purchasing and three marketing nuances. The guide also shares a capital equipment marketing checklist and infographic. To download visit: http://www.modernmarketingpartners.com/Download-Whitepaper-Guide-To-Marketing-Capital-Equipment.cfm

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  • 1. CAPITAL EQUIPMENT ModernMarketingPartners.com MARKETING PRACTICES GUIDE
  • 2. Modern Marketing Partners Capital Equipment Marketing 1 Capital equipment is typically defined as an asset with an acquisition cost of at least $5000, but also includes assets that can cost millions of dollars. Capital equipment encompasses thousands of products and industries, from desktop computers to mainframes, trucks and airplanes, agriculture, medical and military, machine tools to entire plants. The greater the investment, the more likely the purchase requires numerous related services including finance (leases or loans), installation and training, system integration, parts and supplies, maintenance and more. Because of the cost involved, the capital equipment purchasing process is complex for several reasons: the number and type of decision makers, the need to carefully evaluate and compare multiple options using financial analysis, the economic environment and changing tax laws. As a result of these complexities, the capital equipment purchasing process is often protracted, sometimes taking years to complete. Not surprisingly, the marketing of capital equipment requires some different approaches and techniques. Certainly much different marketing approaches than consumer products or low cost business products or services. This guide details four aspects of capital equipment purchasing, along with three considerations of capital equipment marketing, followed by a capital equipment marketing checklist and best practices detail, a capital equipment marketing info-graphic, and some relevant resources. A Closer Look at Capital Equipment Purchasing Lets examine some of the aspects of capital equipment purchasing, beginning with the decision-making process. As stated, capital equipment purchasing typically involves multiple decision-makers and influencers including executive and financial managers, technical experts and consultants, project and procurement managers. Shown here: float glass manufacturing equipment
  • 3. Modern Marketing Partners Capital Equipment Marketing 2 Typically, committees or multiple-functional teams are formed for specific capital equipment projects. The larger the investment, the more decision makers. Second, decision-making is based on the opportunity to generate income or save costs. For capital equipment purchases, extensive and detailed financial analysis is employed. Multiple options are considered and compared via such analysis. Common financial analysis techniques include Return on Investment (ROI), Payback analysis, Net Present Value and total cost of ownership or TCO. Because of the level of investment, alternative financing options are often considered, including lease versus own. Obviously, tax considerations are important. Third, the economic environment has a huge effect on capital equipment purchasing activity, and therefore, marketing. Capital equipment is without question, the most cyclical of all categories. When recessions occur, capital spending is often reduced, postponed or cancelled. Likewise, when the economy is recovering from recession, capital spending is often a leading indicator. Related to economics are country-specific tax laws, or changes to the tax law. While economics cannot be controlled by marketing, the economy must be considered when forecasting and budgeting. Not surprisingly, all these aspects of capital equipment purchasing result in an extended procurement process. Depending on the level of investment, timing of capital equipment purchasing can be months or years. Capital Equipment Marketing Considerations Ok, so that’s a closer look at the purchasing process, now let’s focus on some marketing considerations before getting to best practices. There are at least three (3) factors that can have profound implications for downstream marketing. First, reputation is critical. $
  • 4. Modern Marketing Partners Capital Equipment Marketing 3 Second, the number of customers is limited. Third, many capital equipment brands tend to be so technical, that engineering involvement and information must be part of both buying and selling, including marketing. Regarding reputation, when investing huge sums of money, while the aforementioned decision makers evaluate multiple options, the lowest price is rarely the most important criterion, certainly in comparison to brand reputation. Risk avoidance is paramount. This is further reinforced by the fact that larger capital equipment purchases require so much more than the equipment itself. The implications for marketing are profound. One of great things about capital equipment marketing is that the target market is relatively small, certainly in comparison to consumer markets. There is no mass market. For the most complex and expensive capital equipment there might be only hundreds of potential customers, worldwide. International marketing is often a requirement. No question, the marketing mix for targeting a small number of very important prospects is unique. One last point of marketing more complex or technical capital equipment is the need for engineering for both buying and selling, and yes, marketing. There may be a need for joint development projects, or requirements for extensive testing or evaluation of performance specifications. For these scenarios, effective marketing-engineering processes are critical. How to Market Capital Equipment Now that we have identified several dynamics of both purchasing and marketing, what are the most effective capital equipment marketing strategies and tactics? Following is a capital equipment marketing checklist, followed by best practices detail, and an info-graphic.
  • 5. Modern Marketing Partners Capital Equipment Marketing 4 CAPITAL EQUIPMENT MARKETING CHECKLIST 1. Analysis and Research 2. Planning 3. Brand Image 4. Brand Awareness 5. Website Improvement and SEO 6. Event marketing 7. Thought Leadership Content 8. Blogging 9. Social Media 10. Direct marketing CAPITAL EQUIPMENT MARKETING BEST PRACTICES DETAIL 1. Analysis and Research - Because of the limited number of customers, market and competitor intelligence is more critical in capital equipment than any other category. Start with market segmentation to understand which "verticals" drive sales and profit. Use secondary or published research including the Internet, trade publications, and associations to identify and analyze customers and competitors. For some capital equipment categories, syndicated (or fee-based) research might be available. Search www.marketresearch.com. Another resource, Equipment Data Associates sells a database of equipment lease and loan information (www.edadata.com). If secondary or syndicated research is not available, consider primary research including surveys, customer interviews, or focus groups. 2. Planning – Strategic, tactical, and project planning are each important to managing an effective capital equipment marketing program. Strategic plans are long-term in nature and include research and financial projections. Tactical plans are required for managing media advertising, trade show or event calendars, and related marketing programs. Project plans are required for larger marketing initiatives like a new website. Budgeting is an important part of planning that ensures financial resources are
  • 6. Modern Marketing Partners Capital Equipment Marketing 5 approved and available for ongoing marketing. The time, effort and formality of planning and budgeting will vary with the scale of the program. 3. Brand Image – As mentioned, brand reputation is critical in capital equipment markets. Prospects generally focus on a short list or consideration set of 3-4 vendors, with the perceived leader having a distinct advantage. Brand image is each customer’s perception, and the sum total of all exposures to your brand. When investing large sums, risk aversion is the customer mindset. Therefore, brand image must exude leadership and professionalism. Messaging must resonate with customer needs and be clearly differentiated from competitors. Continuity of brand elements and messaging across all marketing channels and media is important. Without continuity, brand confusion can result. 4. Brand Awareness – Prospects must be aware of your brand to be considered. Sure, Internet search results can overcome lack of awareness to some extent (the subject of the next best practice). But, having a high profile in a vertical market or industry supports brand reputation and making that short list. Advertising and publicity are two marketing initiatives that can build brand awareness. Advertising capital equipment most often uses trade magazines or journals to reach specialized vertical markets. In addition, there are associations, trade shows, and industry websites for such verticals. Publicity can be even more effective than advertising, as customers perceive higher credibility from trusted news sources. Publicity tactics include news announcements, article writing and placements, speeches, and press events. Publicity often focuses on the same publications as advertising, along with added news outlets including wire distribution services like PRweb. Media Shown here: computer data center
  • 7. Modern Marketing Partners Capital Equipment Marketing 6 relations is the ongoing publicity efforts to achieve placements and mentions. 5. Website Improvement and Search Engine Optimization (SEO) – The company or brand website is the foundation of your marketing program. It is likely one of the first impressions of your brand. Is your website brand image stellar? Does the website content address customer needs, problems or requirements? Importantly, is lead generation maximized with offers and registration pages? No question, prospects use search engines to identify capital equipment options. Does the site rank in the top 3 search results for keywords? Search authority is driven by multiple search engine optimization (SEO) techniques. Run search engine optimization diagnostics like SEOmoz to identify issues and problems. For more SEO tips, check out our whitepaper on Search Engine Optimization Best Practices (see resources at end). What are your website traffic statistics? Check Google Analytics. Consider paid search (Pay-Per-Click) if organic search cannot achieve top positions in search engine results pages (SERPs). 6. Event Marketing – Many capital equipment vertical markets have industry trade shows that are important to participate in. Oftentimes, capital equipment is demonstrated and purchased at key industry events. If trade shows are a key tactic, be sure to leverage opportunities for pre-show communication, at-show promotions and meetings, press events or speaking opportunities, and post-show follow-up. Besides trade shows, other types of event marketing include webcasts on a variety of topics, training programs or demonstrations, and user groups. Shown here: mining dump truck
  • 8. Modern Marketing Partners Capital Equipment Marketing 7 7. Thought Leadership Content – Be the subject matter expert (SME) or thought leader for your niche. How? Develop case studies, white papers, surveys and industry studies, eBooks, videos, and more. Use and repurpose the content for your website, blogging, and social media. Use content for your credentials kit when submitting proposals. Search and curate (use with credit) content from other publishers, bloggers, and editors. Educational and technical content is needed for many marketing tactics. Other content types include brochures and catalogs, Powerpoint decks, specification worksheets, installation and training manuals, performance specifications, and more. 8. Blogging – An effective tool for distributing content is a blog. Blogging has many benefits to a marketing program including excellent search engine optimization (SEO). Blogs integrate with your website and social media to build indexed pages, and distribute content through bookmarking and social sharing. Blog software like WordPress has powerful search optimization features, widgets, and plug-ins. Blogrolls are essentially link directories, that encourage reciprocal links and support link-building, a major determinant of search authority. 9. Social Media – Social media is the hottest topic in marketing. Why? Because it can build search authority and generate leads! How? Build-out LinkedIn personal profiles and LinkedIn company pages, a Facebook business page, Twitter profile, YouTube channel, and Google+. Be sure to add social profile icons and links to your website and blog. Add social share tools to both your website and blog (Facebook Like, Twitter Retweet, Google+, Bookmarks). YouTube has a few features for meta-coding that deliver high search authority for keywords.
  • 9. Modern Marketing Partners Capital Equipment Marketing 8 10. Direct Marketing – The purpose of all marketing is lead generation. So manage it with a customer database, contact manager, or marketing automation software. Code, track, and report leads. Integrate the database with website registration pages, and email campaigns. Conduct ongoing research into relevant prospects and contacts. Procure prospect lists from publishers or associations. Use telemarketing qualification to identify decision makers and contact information at each prospect location. With capital equipment’s extended sales cycle, email is an excellent medium to stay in front of prospects over time. Monthly email newsletters can be effective in keeping your brand top-of-mind. Consider micro-targeting emails based on vertical and/or role (example: engineering vs. finance).
  • 10. 9 CAPITAL EQUIPMENT MARKETING - INFOGRAPHIC 2011 U.S. CAPITAL EQUIPMENT EXPENDITURES (MILLIONS) 800000 600000 400000 200000 639,410 743,130 630,373 673,353 821,238 829,455 641,149 811,779 4ASPECTS OF PURCHASING 3MARKETING NUANCES TOP CAPITAL EQUIPMENT MARKETS (2011 EXPENDITURES MILLIONS) * U.S. ANNUAL CAPITAL EQUIPMENT EXPENDITURES (MILLIONS) 676,112 770,900 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 MARKETING SPEND BY CAPITAL EQUIPMENT VERTICAL (% SALES) ** $40,966 (Used) 0 - Multiple Decision Makers - Reputation - Financial Analysis (ROI, TCO) - Economy $ - Small Number of Customers - Engineering Roles - Extended Procurement Process Manufacturing $156,760 Mfg. Equip. $95,059 $93,192 $79,357 $63,568 $51,319 $44,053 $42,213 $40,216 $38,064 CAPITAL EQUIPMENT MARKETING CHECKLIST IT/Computers Utility Equip. Transport/ Warehouse Equip. Mining Equip. Healthcare Equip. Automotive/Rental /Leasing Analysis and Research Planning Event Marketing (trade shows) Brand Image Thought Leadership Content .92% 1.8% .64% 1.2% .74% 4.6% 1.6% 2.24% 1.9% 2.6% 1.7% 4.2% 5.9% 4.3% 5.2% (Total) 2.1% 6.3% Blogging Brand Awareness (Ads, PR) 6.4% 3% 4.2% Social Media (YT, LI, TW, FB) Website Improvement and SEO Direct Marketing (email) $770,900 (Total) $729,934 (New) LEAD GENERATION MEASUREMENT/REPORTING Non-Durable Goods Utilites Transportation/Warehousing Mining Direct Costs Overhead/Salaries/Admin 8.4% ©Copyright 2013. Modern Marketing Partners. All Rights Reserved. *Source: U.S. Census Annual Capital Expenditures Survey, www.Census.gov www.ModernMarketingPartners.com **Source: Schonfeld & Associates Report, MMP Surveys Financial Services Durable Goods IT/Computers Healthcare Automotive/Rental/Leasing 0 500000 100000 150000 2000000 0 2 4 6 8 10
  • 11. Modern Marketing Partners Capital Equipment Marketing 10 Modern Marketing Partners is a full-service, strategic marketing and communications agency with a capital equipment and component marketing practice. Clients include Algus Packaging, Auto Truck Group, Balemaster, Deublin, D&K Laminating, Gammerler, ITW, Knuth Machine Tools, Ko-Pack, Label-Aire, OMRON Electronics, Panasonic, Sonoco Alloyd, Swenson Chemical Processing, Trine Labeling, Tuthill Pump, Tyco Electronics, Wittenstein Motion Control, Woodworking Machinery Industry Association (WMIA) and others. For more information visit www.ModernMarketingPartners.com Effective Marketing Drives Sales Success Marketing capital equipment can be as complex as the equipment itself. With multiple decision-makers, extensive financial analysis, economic and tax considerations, the procurement process can stretch over long time periods. Capital equipment marketers must build a professional brand image, and attain a thought leadership position. Websites must rank high in keyword search results. Prospects must be identified and nurtured over an extended sales cycle. Every sale is critical as the life of the capital equipment, along with add on sales are significant. Employing these marketing best practices can help capital equipment brands achieve success. Additional Resources: Search Engine Optimization: Top Priority for Modern Marketers (MMP) Marketing Planning and Budgeting Best Practices (MMP) Glossary of Modern Marketing Definitions (MMP) © Copyright 2013. Modern Marketing Partners. All Rights Reserved.