Vending Programs Prove the Best Defense is a Good Offense - Modern Distribution Management

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Vending Programs Prove the Best Defense is a Good Offense

Focusing on new customer acquisition means ignoring the most important customers: the ones you already have.

Many distributors put a heavier focus on new customer acquisition than retention programs. But don't lose sight of the potential increase in sales and profitability if you can capture more of existing customers’ overall spend with focused programs like vending. If you take good care of existing customers, they will also act as advocates of your brand, lifting your sales and marketing teams in their new customer acquisition efforts.

According to consulting company Invesp, it costs five times more to attract a new customer than to keep an existing one. And increasing customer retention rates by just 5 percent can increase profits by anywhere from 25 percent to 95 percent.

Perfecting operations and offering top-notch customer service are the first step. But without a competitive differentiator, distributors are vulnerable to competitors that offer a lower price or more compelling value proposition.

Vending programs are a proven example of an effective customer retention strategy based on differentiation. Distributors proactive about offering vending to customers avoid the situation of walking into a customer to find a competitor’s machine already installed. Once machines are in place, they also help defend against competitors hoping to gain a foothold in the account.

Vending machines can streamline operations at end-user facilities, eliminating the need for manual inventory counts and quotes, and moving the materials needed for production closer to employee work areas. The machines also enable better inventory control and employee accountability without the need for tool crib staff, leading to inventory consumption reductions of 30 percent or more.

The value customers derive from vending programs lowers the risk that they will be enticed by offers of competing distributors, even those offering lower pricing. In our experience, they value it to such an extent that it would take an awful lot to convince them to accept the high switching costs of moving business to a competitor.

Because customers value vending so highly, distributors need not charge them new fees for access to the machines or mark up product prices to make the arrangement profitable. They only need to ask for enough new business to justify the cost of the equipment, which most customers are willing to do. Distributors can leverage this value-added service proactively if they want to not only protect the account, but grow it as well. That’s my definition of where the best defense is often a good offense.

Read about the ROI of vending in the MDM blog, How to Calculate Vending ROI.

Mark Hill has 40 years' experience in industrial distribution and vending. He is the founder of vending machine supply company 1sourcevend. Learn more at

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