When we ask successful distribution company executives about the sweet spots in their market, they readily provide a confident answer. The problem with the answer is that it is usually incorrect or at best partially correct.
Up-selling and cross-selling are the two primary means of growing an account. Among these, cross-selling is paramount. Here’s why: many distributors have regular customers who buy the same set of 10 to 20 SKUs over and over, yet, they have thousands of other products that could be sold to those same customers.
One of the biggest challenges for any sales and marketing organization is when to reach out to a customer with an offer or promotion. The objective is to reach out according to a natural buying cycle. If it is done too frequently, it loses its impact or even turns the customer off.
Good product data is crucial for any successful distributor catalog or e-commerce website. This includes accurate and complete specifications of products as well as clean photos, related items, and substitute products.
Catalogs and e-commerce are critical individual components in distributors’ marketing arsenals. Distributors that have taken advantage of clear synergies between the two are reaping huge benefits, including cost savings in product information management and marketing.
Distributor measurements of effectiveness primarily include return on marketing investment, customer retention and lifetime value, and secondarily include share of wallet and internal rate of return. Furthermore, nearly 80 percent of distributors have gather customer feedback on catalog effectiveness.
There was heavier participation from industrial, electrical/electronics, building, safety, hardware, and HVACR. Other participating sectors include chemicals and plastics, building materials, pulp and paper, janitorial, hardware, oil and gas, grocery, and pharmaceutical.
The research performed included interviews with nearly 10 distributor senior executives and an online survey taken by 170 participants across a variety of distribution sectors. There was heavier participation from industrial, electrical/electronics, building, safety, hardware, and chemicals and plastics.
There is a very wide variety of marketing practices within the distribution sector. In general, the MDM Market Leaders more broadly embrace marketing as evidenced by resources they apply. Not surprisingly, they obtain better marketing results than other distributors.
Historically, distributors were limited to in-store marketing vehicles such as print flyers, catalogs, some telemarketing and tradeshows. Marketing vehicles that have become prevalent in the past five years include email, search engine marketing, increased telemarketing and social media.