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ElectricalTrends is a communications vehicle offered to the electrical distribution industry by Allen Ray Associates and Channel Marketing Group. The purpose of ElectricalTrends is to share Allen Ray Associates' and Channel Marketing Group's insights on industry trends, observations on industry activities and issues and offer ideas that may benefit industry participants in their endeavor to improve their businesses in the areas of growth and profitability.

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Sunday, February 26, 2012

Understanding Distributor Marketing Tool Usage & Effectiveness

We frequently get the questions of "what marketing tools work for distributors?" and "how much do distributors budget (or spend) on marketing?" While we have our opinions, we decided to ask distributors.

Earlier this year, Channel Marketing Group surveyed a sampling of distributors in the electrical, plumbing, HVAC, drywall, industrial supplies and PVF industries.  Over 1000 companies in total were surveyed and we received almost 200 responses.

We've compiled their input into a research report entitled "Understanding Distributor Marketing Tool Usage & Effectiveness".
In total we inquired about 75 marketing activities.  We also asked:
  • what percentage of marketing activities include suppliers?
  • what percentage of a distributor's marketing budget (with and without personnel) is funded by suppliers?
  • how much distributors invest in their marketing?
The report is available for free at  http://slidesha.re/wyqPZw or can be purchased for $29 here (on Electricaltrends in the Research section.)
Key findings included:
  • Distributor marketing plans are stale with the same programs. Need imagination and change with the current thinking.
  • Creating awareness with logo’d products is effective but not the total strategy.
  • Brand Awareness requires better planning with more effective programs.
  • Trip and premium programs are very effective. It should be part of any marketing plan to grow business.
  • Joint sales calls remain the most effective program when correctly planned.
  • Customers want training. How good the training is needs to be at a high level
  • The pace of technology continues to accelerate and is impacting marketing – ranging from websites to e-newsletters to smartphone apps to tablet technology. New usages are found daily to increase sales and customer productivity. Distributors are challenged on capitalizing due to pace of change, initialization costs, skilled personnel, security concerns and questionable ROI.
  • Distributors, who guarantee product availability can differentiate themselves.
  • Customers are looking for VALUE ADDED SERVICES as an overall component of their purchasing relationship.
  • 62.5% of distributors do not have a value added service brochure. How than do they differentiate themselves or compete with the ones that offer services? Do the presence of brochures infer potentially a more aware sales organization?
  • 50% of distributors do not solicit what their customers think of them. This begs the question of “how do they expect to know, and meet, customer requirements?
And ...
  • Distributors allocate .217% of sales to marketing, exclusive of manufacturer solicited funding and 68% of marketing activities reference a supplier (many times for funding support.)
Distributors - what works for you? Manufacturers - what do you find worthwhile to invest in? and whom do you think distributors should consider "best in class"? 

1 comment:

  1. Interesting that the PRODUCT sold by the distributor is never mentioned as a possible differentiator in a marketing effort. Seems that distributors never consider finding unique innovative products to introduce to their customers as a way of building awareness. Perhaps they are missing real opportunities?


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