Distributors like to give away products emblazoned with their logos, and they like sending customers on vacations and taking them on outings, but the effectiveness of these and other marketing tools is less clear than the returns from providing more training, better technology, guaranteed product availability and value-added services, according to a survey recently completed by David Gordon of Channel Marketing Group (CMG), Raleigh, N.C.
The survey report, “Understanding Distributor Marketing Tool Usage & Effectiveness,” solicited insights from distributors in the construction and industrial trades and its conclusions were based on about 200 responses. Electrical distributors made up approximately 60 percent of respondents to CMG’s survey, so even without breaking them out specifically solid conclusions can be drawn about how marketing tools are used by distributors in the electrical industry.
The study found that 97 percent of distributors conduct training for their customers and rated its effectiveness in raising product awareness the highest, followed by trade shows and open houses, then lunch & learn sessions. While 87 percent of the distributors host counter days, almost one-third say they’re not effective. Mobile “counter day” promotions, on the other hand, provide a better ROI, said Gordon.
A growing number of distributors are using iPads and other tablet computers, with 27 percent providing them as tools for their salespeople and 23 percent developing apps for customers. They rated the effectiveness of these tools as high, particularly for catalogs on iPads. Many distributors also have a presence on Facebook and/or Twitter but are not generating results from it. Of the distributor respondents, 97 percent have a website, but only 54 percent have e-commerce capabilities for either public or existing customer use.
Results on guarantee programs showed that a third of distributors have in-stock guarantees and considered them highly effective. Other process guarantees such as on-time delivery, error-free ordering and accurate invoices were basic customer expectations.
The most effective sales collateral is still a printed catalog, followed by direct mail and print newsletters and distributors rated them significantly more effective than e-newsletters. Gordon concludes this is “possibly due to an abundance of e-newsletters or the scanning nature of online materials.” Brochures were considered less effective but necessary as door-opener tools for new accounts and account penetration opportunities.
Customer-specific activities and group outings were considered effective for enabling personal connections, and the study showed that group travel was as effective as customer-specific retreats. Price promotions were considered not effective.
Distributors rated the effectiveness of joint sales calls with their manufacturers and independent manufacturers’ reps as very high, with over 70 percent giving the activity a 4 or 5 rating on a scale from 1 to 5. Otherwise, CMG found distributors continue to take a reactive approach to selling initiatives, with 35 percent having an in-bound call center and only 38 percent doing outbound telemarketing. “Virtually no one is using an automated outbound calling system,” the report said.
Value-added offerings such as job-site trailers, order-staging, efficiency audits and kitting were used by 75 percent to 90 percent of respondents and rated high on the effectiveness scale.
Distributors said 68 percent of their marketing activities mention at least one supplier, most often to make use of marketing and co-op funds. Slightly under 40 percent of the distributors’ total marketing budgets are funded by their manufacturers.