For many electrical distributors, multi-channel marketing may only mean adding e-commerce alongside field sales. However, there is more to multi-channel marketing than just field sales and e-commerce. It might or perhaps should include proactive inside sales, vending machines, mobile, email and short message service (SMS) and multimedia messaging services (MMS).
The key driver for all of these potential channels is your customers’ need for more efficiency in how they shop and buy from you. Our company, Real Results Marketing, has conducted numerous surveys of customers over the last seven years that show that an increasing percentage of customers are less interested in spending time with field sales reps.
Our most recent research, conducted with more than 3,500 customers of 10 distributors, shows that 16 percent of respondents never want a field sales rep to visit and another 22 percent only want a field sales rep to visit once per year.
Depending on the nature of the situation, using an e-commerce site or working with a dedicated inside sales rep can be more efficient for your customer than spending 30 to 60 minutes with a sales rep. Your customer can shop and buy online or shop and buy with an inside sales rep in less than 15 minutes.
This preference for efficiency is more pronounced among millennials who consider shopping with a sales representative as the third resort. However, the trend applies across other age demographics as well. The great news is that what’s good for the goose is good for the gander. You, the distributor, get better efficiency with e-commerce and inside sales in the following ways:
- Cost per order with e-commerce is significantly lower, often $20 to $30 per order.
- Cost per customer contact with inside sales is much lower (see the table below) and the gross margin of customers who would be assigned to inside sales is significantly higher.
As mentioned earlier, the trends driving the need for e-commerce and e-marketing are particularly resonant with the so-called ‘millennial’ generation.
Millennials now outnumber baby boomers and GenX in the work force (see Figure 1). In four years they will significantly outnumber baby boomers and along with GenZ will significantly outnumber GenX. That means that the majority of the workforce will have grown up in the digital era.
Figure 1: Labor Force by Age
In What Customers Want: A Distributor’s Guide to Customer Buying and Shopping Preferences, we looked at 10 different ways customers want to shop and 10 different ways customers want to buy from distributors. Millennials have very distinct patterns (see Figure 2) for their most preferred ways to shop and buy. The top three ways they most frequently shop include: 50 percent search, only a third would go to distributor websites and just over a quarter would talk to a sales rep. This is a much more pronounced digital fingerprint than the baby boomers or even GenX. It highlights a generation that is less focused on relationships, particularly with older field salespeople (who might be retiring soon anyway). They buy most frequently by sending a purchase order through email, going to a website to purchase or talking to a customer service representative.
Figure 2: How Most Millennials Prefer to Shop and Buy
- Very frequent shopping methods
- 50 percent by search
- A third at distributor website
- 27 percent with distributor sales rep
- Very frequent buying methods
- 52 percent by email
- 41 percent by web or mobile
- 22 percent by customer sales representative
The shift will happen precipitously over the next two to four years, depending on your industry and your customer base. But, it takes two to four years to build a strong marketing and digital marketing capability, so even if your industry is moving a little slower, the time to act is now. If you want to reach the majority of your customers, knowing their preferences is critical. Using the traditional field sales approaches may be ineffective for a growing number of customers and selling situations. Key moves for distributors to gain a competitive advantage for shopping and buying:
- Create an e-commerce site rich with information that is well organized and easy to find. Your website can then become a destination for shoppers where they will skip search and go directly to your site.
- Make it really easy for them to buy online by desktop or mobile. Only 25 percent of our survey respondents indicated that the customer experience on their primary supplier’s website was excellent. We are still in the early majority phase of e-commerce in distribution. It is still possible to leap-frog your competitors.
- Improve your capability in search marketing. Less than 15 percent of distributors are doing search. Very few are doing it well. Given that search is the primary paradigm for millennials and GenZ, you will be well served by creating a strong capability here.
The direction today and in the future is inevitably pointed toward greater efficiency amid changing preferences among your customers. Here are some recommendations to consider:
- Find out what your customers want in shopping, buying and communication.
- Heed their message and respond accordingly. E-commerce might not be the first move. Your customers will tell you.
Real Results Marketing is a marketing strategy and execution firm focused exclusively on the distribution industry. Founded in 2003, the firm strikes the right blend of strategy, execution and measurement to transform your marketing department into a profit center. For more information, visit www.realresultsmarketing.com. Request a copy of the What Customers Want: A Distributor’s Guide to Customer Buying and Shopping Preferences study