How to fine-tune your marketing program

 

BY RICH SCHMITT
Management specialist

Working with a wholesaler several years ago to improve their performance, we determined that they were, in fact, a pretty good business. They had a good team, good lines and convenient locations -- yet they were turning in average to below-average performance compared to their peers in the industry. After some digging, we determined that a big part of their performance problem was their image, both internally and externally.  Trade customers in their area viewed them as an old-time, sleepy, slow-moving undistinguished wholesale company.  Frankly, customers felt no compelling reason to go to their branches and no significant reason not to.

Over the years, the team had settled into this image and, when we got there, they could best be described as a group with untapped potential. That’s like having a blind date with someone described as having an average personality. Most of us don’t aspire to be average and bland.  Most of us do not seek out businesses and people who we think are average and lackluster. So this wholesaler was not the “Primary Supplier” to very many contractors and maintenance people in their market. (I won’t repeat all the elements of becoming the “Primary Supplier” to customers in this column but the gist of the “Primary Supplier” concept is: 

• Customers call their “Primary Supplier” first when they need something 
• Customers stop at their “Primary Supplier’s” locations first --ideally going out of their way to buy from their “Primary Supplier”
• Customers often give their “Primary Supplier” the last-look when possible.

Getting first-call, first-stop and last-look gives the wholesaler a big advantage over the competition. One of the critical elements in becoming the “Primary Supplier” is that customers have to like you and like doing business with you. For the rest of the story on earning the “Primary Suppler” role with customers, e-mail me at Rich@go-spi.com.

While, in reality, our client’s operation was good enough to earn the Primary Supplier relationship with customers, the contractors in the market didn’t perceive it to be so. When it comes to selecting a primary supplier, the customer’s perception always trumps reality. It might not be fair, but that is how the world works.

So the prescription for our client was to spend time doing some common-sense, simple marketing activities to materially reshape their image in the marketplace. We told them that if they didn’t shape the market’s perception, somebody else certainly would -- probably casting the company in a much less favorable light.

At first they were opposed to the recommendation since many companies in our industry have developed a dim view of marketing. So when we suggest that wholesalers need to focus on marketing activities, there is often some level of resistance. Some argue with the suggestion because they associate marketing with deception or snake-oil. Others, being of a humble heritage, think that marketing is like bragging and don’t want to brag. Some think it has to be expensive. Others think it is an activity for big-budget, fancy companies.

Frankly, in my mind, there must be a marketing function within every wholesaler.  (As with other functions in wholesale companies, in smaller companies, marketing might be a part of an individual’s job and in larger companies, marketing might be a department. The important point is to have someone who is held accountable for the marketing activities within your company. )

I want to be clear, though, about what I mean by marketing. The function normally includes communication, pricing, promotion, advertising, business development, competitive intelligence and development of responses to competitive situations.

Frankly, I don’t like much of the marketing that is done in our industry because it fails my simple marketing effectiveness test: It does not persuade the customer to buy from the wholesaler and that is the only reason to involve yourself in marketing.

I want to focus on some of the components of basic marketing in the remainder of this column. Before coming back to this industry, I worked for a Fortune 100 company where advertising agencies would relentlessly work to convince the company to spend millions of dollars on ad campaigns. One of my “favorite” marketing misadventures featured a herd of wild horses galloping down a canyon at dusk with a simple “profound” title followed by the company name appearing on the screen. You would be surprised how much it costs to get a herd of wild horses to run down a canyon when the light is just right. Since the ad agency was paid a percentage of the ad costs, cost was no object to them. Further, the wild horses just didn’t seem to understand that they were not supposed to stop in the middle of the shot and relieve themselves or to begin a procreation type activity. (Certainly, we didn’t want customers who viewed the ad to think that we were going to do either of those things to them.) Sadly, after all the effort and expense, the campaign didn’t materially change the way customers and prospective customers bought from us. It turns out that most of us don’t change our buying habits based upon wild horses. 

In his book, Differentiate or Die, Jack Trout points out that a big beer company’s ad featuring lizards and frogs was very popular and won some awards from the advertising industry for its creativity and artistic content. He reveals that the ads, however, failed in their fundamental purpose, which was to sell more beer. He explains that, not surprisingly, beer drinkers need to be convinced that the beer tastes really good or that drinking a brand of beer will make them appealing to others and therefore include them in a group of cool people. Funny frogs are just not a part of the beer selection process for most of us. I recommend the book for getting your thought-processes oriented toward marketing activities that will help to differentiate your company and to sell more products.

So I’m not talking about big money type marketing. I’m talking about smart, common sense type marketing. In the following sections, I’ll share my thoughts from observing what seems to work and what does not.

Assign the marketing responsibility

Someone in your company must have responsibility for marketing. Just like most skills, getting good at marketing takes time and commitment. It is not a once-a-year activity when you plan your golf tournament and hat giveaway. It is an ongoing process.

A clear purpose

Every marketing activity should have a clear purpose, specific target, a stated timeframe and a projected return on investment (ROI).

• Purpose -- What are you trying to get the customer to do?  This seems fundamental, but most marketing activities do not have a clear stated purpose. Many marketing projects start with what is going to be done (hat giveaway, barbeque, counter day, etc.) but have no stated purpose. Marketing is not magic. There is, almost always, a simple cause and effect type relationship. If we offer this, the customer will do this. If we communicate this, the customer will do this. As I said, I always focus on the customer buying from the wholesaler in evaluating purpose. Marketing activities with any other stated purpose end up low on my priority list.
• Target -- Who is the activity aimed at? I become more suspicious of an activity as its target gets broader. Few activities aimed at “all plumbers” seem to be really successful. Your hot dog days at the counter probably don’t impress the owner if he isn’t in a truck while ways to reduce his operating costs might be very important to him. In fact, if you send out a flier or e-mail announcing your hot dog day, the owner may become aggravated since he may not like his guys driving out of the way to eat your free hot dogs.

Conversely, your cost-saving services don’t impress the tech in the truck when he is not an owner but hot dogs at your counter may hit the spot after a hard morning. What makes the process even more complicated is that both the owner and the tech are probably decision makers in the buying process. Seldom does “one size fits all” type marketing work as effectively as rifle-shots aimed directly at the interests and concerns of each group that you are trying to sell. The base question that you must answer is: What is in it for the targeted customer?

• Timeframe -- When will the change occur? I don’t place much stock in the notion that certain activities are indirect or take months or years to produce fruit. The only exception I can think of would be community service-type activities that are done consistently over many years. In my mind, these are more focused on “giving back” to the community; it’s a bonus when customers’ behavior is changed positively.
• What is the projected ROI --  Every activity is an investment of money, energy and time that should produce an acceptable return. Without this common-sense approach you are probably wasting your time, energy and money.

Performance measurement

Measure the performance of all marketing activities. Every marketing activity should have a predefined measure to determine its effectiveness. Your intent is to rationally do more of what seems to work and less of what does not seem to work. While this seems like such a simple concept, few wholesalers do an adequate job of tracking their marketing effectiveness. When you do a promotion or program, you should be able to evaluate how well it worked and whether it achieved the roi that was projected before it was approved. 

KISS

Keep it simple stupid! At the Fortune-100 company, whenever we got the graphics department involved it seemed like we were starting a battle between form and function. Our graphic “artists” wanted every piece to be a museum-quality work of art with seemingly little concern for the roi. I think it is important that marketing pieces look good but their message and purpose must always come first. I try to find graphic artists who “get it” when I explain the purpose, the message and the target. The great ones then can use their artistic talents to create effective pieces that do produce results for you. My simple rules for marketing materials:

• Every element of every marketing document is included for a purpose
• Every part of the document sends a clear message 
• “Fluff” and “Gingerbread” is avoided as it often distracts the reader or confuses the message
• Any pictures, ideally, tell the story with minimal accompanying text or further explanation.

Communicate directly

Trade customers tend to be very straightforward in their communication style. Typically these are guys who are more likely to watch a nascar race than to read poetry in their spare time. So attempting to make your case in subtle or indirect ways will likely miss their mark. We have said for years that the formula for selling to tradespeople is:

• Use small words  -- Big words seldom impress them and often turn them off
• Use large type -- Assume their glasses are not up to date. Make it easy to read your materials. If your communications are difficult to read contractors won’t read them.
• Use pictures -- They are worth 1,000 words and often can tell your story in a more interesting way.
• Put something in their hands whenever possible -- Many tradespeople will be bored by a brochure describing your new widget but light up when you put that same widget into their hands.
• Use bulleted selling points not paragraphs -- Many contractors are not the best readers so make it easy for them to digest the message. One contractor confided to me that paragraphs of narrative make him mad. He asked, “Why can’t they [the wholesaler] make it easy for me and just provide the information I need to select this product.  Why do they make me read through all this crap?”
• Keep the look and appearance of your marketing materials consistent and unique -- Your materials should be easy to recognize not an ever-changing set of styles and colors. Your graphic artist may try to convince you otherwise but take a lesson from the grocery and department store fliers in your area. The content changes often but the look and style may not change over decades.
• Repeat your message many times -- Most of us have to hear a message several times before it sinks in.
• Repeat your message many times -- They have done studies and found that it may take seven or eight repititions for the message to penetrate our thick skulls.
• Repeat your message many times -- You repeat the same message but, ideally, in different and interesting ways.

Consider your message from the customer’s perspective

When you say that a new product will reduce installation time, some customers will not view that as a good thing since many of them still charge by the hour. If your product cuts an hour out of the job, they bill for one less hour and make less money. If they are flat-rating their jobs, this new product will make them more money.

Don’t assume the customer will connect the dots

If you are touting your fast counter, don’t assume that customers will understand your intended message which is, “Our fast counter means you/your team spend less time at our counter and, therefore, can spend more time doing billable work.”

Quantify your value whenever possible

So your fast counter allows them to do more billable work. That’s a good thing but not nearly as compelling as when you help them with the math. “So if you save one-half hour per day that’s 2.5 additional billable hours per week and at $40 per billable hour that’s $100 per week of additional money in your pocket.” Note that I didn’t use the words “additional profit” since most contractors relate more directly to the words “money” and “dollars” than the word “profit.”

This thought process applies to promoting any of the services that you provide to your customers. The wholesaler has the burden of proof to demonstrate to the customer what they do, why it matters and how much money is involved. Again, while a contractor may not care about your fast counter, he probably does care about $100 per week in his pocket. 

Ideally you make the value as personal as possible

On another front, typically plumbers do a poor job of recommending premium or upscale products to their customers. Even when the wholesaler provides the plumber with a selling sheet showing three grades (good, better and best) of kitchen faucets, the plumbers may not use it since it doesn’t show him what is in it for him. When you take the additional time to create a “What’s in it for the plumber” sheet explaining that the real money to the plumber is $30 for faucet #1, $60 for faucet #2 and $120 for faucet #3, you may get more interest.

Urgency and a call to action

Most of us react to deadlines, so your materials should tell the customer what he needs to do then give him a deadline for doing it.

Intrigue your customers

Finally, the wholesaler has the burden of making all marketing activities exciting, varied and interesting to the customer.

Next month, I will discuss some additional facets of basic marketing for wholesalers. For reprints on the topic of marketing, e-mail me at rich@go-spi.com.

Rich Schmitt is president of Schmitt Consulting Group Inc., a management consulting firm focused on improving the profitability of distribution and manufacturing clients. Rich is also the co-owner of Schmitt ProfitTools Inc. (SPI), a business producing print, CD-ROM, web and palm-based catalogs as well as pricing management and analysis software for wholesalers.