Why Are Distributors So Bad at Marketing? - Modern Distribution Management

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Why Are Distributors So Bad at Marketing?

While it may be difficult, its not hopeless.

I get this question a lot. There are distributors that do marketing very well, but on average the industry lags behind others, such as retail, technology, manufacturing and… just about everyone else. Marketing VPs have short tenures in many industries, but it seems like they turn over in distribution even more rapidly.

I think there are three reasons that it’s so difficult to make marketing effective in distribution. First, marketing is a tough discipline, particularly in distribution, because it’s so broad and changes so rapidly. Second, it’s extremely difficult to demonstrate that marketing is producing convincing financial results. Third, many marketers focus on stuff that’s not very important and so they have no results to show anyway.

Distribution Marketing Is Hard

The term “marketing” covers an enormously wide variety of subjects. Lead generation, social media, branding, marketing automation, customer databases, email, direct mail, advertising, events and trade shows, video production, sales presentations and collateral, public relations, customer lifecycle management, blogging, website development, mobile marketing, SEO, content development, product data management and many other topics fit under the umbrella of “marketing” in many distribution companies.

No one can possibly be an expert in all these subjects; it’s hard to justify a team that does all of this. And as marketing has become more technology-based, many of these subjects change rapidly, so today’s expertise is outdated tomorrow.

And it’s harder in our industry because marketing often reports into a senior sales executive. With some notable exceptions, these executives don’t understand modern marketing; they view it simply as a sales support department and not as a group that can help drive revenues independently.

Measurement Is Tough

These challenges are exacerbated by the second reason distributor marketing often fails: it’s hard to demonstrate a return on your efforts, so it’s difficult to get the company to invest in the marketing department.

Part of this is an attribution problem. For example, if a customer makes a first purchase and then keeps growing for years, where do you assign the credit? Did that customer buy for the first time thanks to SEO, a sales call, a recommendation from another customer, a flyer you mailed them, an email they received? Or did they just notice the branch one day and stopped by? And if a sales rep added the account to his package, to what degree does he get the credit for the first year’s sales versus the marketing department’s efforts?

It’s also a cultural problem. CEOs tend to understand sales but not marketing. They know how to manage sales people because the measurement is straightforward: my account manager Mary Smith has 50 accounts; they either grew or declined by x percent, so she gets the credit or the blame. Even if Mary claims that marketing provided great campaigns and promotions that helped her win, I can’t measure that contribution.

All the stuff marketing does is really hard to measure unless most or all of your sales originate online. Marketing sends email and direct mail campaigns, for example, but the customers who received them often buy through other channels. Or they may have acted on the email but bought an item different than what you showed or additional items you don’t credit to the promo. Or they may have responded to your June promotion in July, so you don’t attribute it to the campaign.

Marketers Focus on the Wrong Things

There are a lot of things marketers do that either are not very important or they’re simply annoying to the rest of the employees.

For most distributors, there’s limited value in social media unless you’re using it to drive productive sale leads. If you’re running promotions to a targeted Facebook audience, you may see some decent results, but the number of “likes” you have on your company page is not very important. Even statistics like email open rates and SEO authority don’t mean much to anyone not in the marketing department. Senior executives and investors care about sales results; anything that just tracks activity is of limited interest if you can’t correlate it to dollars.

Marketers need to stop running around playing the “branding police.” No one liked a snitch when you were in school and they don’t like it at work, either. Your branding guidelines are supposed to be informative and helpful, not a rulebook you use to play “gotcha” with violators. And the guidelines are not divinely inspired; they’re someone’s opinion and no one cares about them as much as the marketers do. Get some perspective.

What to Do

The good news is that while it’s difficult, it’s not hopeless. In my opinion, distribution marketers should take responsibility for supporting the sales team, improving customer lifecycle results, owning “unassigned accounts” and building online marketing and transaction capabilities. Measure and report your performance as accurately as you can and focus on making yourself useful. If you are useful for a long period of time, you will eventually become essential.

If you want to read more about what to focus on, download my brief whitepaper, The 10 Commandments of Distributor Marketing.

Thanks for reading and I look forward to your feedback. You can comment below or send me an email at ian@mdm.com.

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