Giving Back – Feels Good, Helps Community, Drives Sales

Over the past 6-8 weeks electrical distributor marketers have focused on an EIE approach.  Empathy, information and education.  During this quickly changing market it was imperative to let customers know that distributors were open for business, that business models had changed, to show empathy as well as recognize the effort of staff and, as time permitted, to offer online educational initiatives that were typically supplier driven.

Companies with effective digital marketing initiatives have been prolific in getting their message into the marketplace.

Since mid-March many distributors have been in crises mode but, with some of the “closed” construction states reopening and states representing about 36% of the population opening in some phase, there appears to be light at the end of the tunnel.

No one can predict the level of economic recovery be it a V, U, L, W or another letter in the alphabet, however, most would agree that we’ll technically be in a recession (two consecutive quarters with a declining GDP … and Q1 was -4.8%!).

Additionally, it is a fair statement that the two segments of the industry that have taken the biggest hit employment-wise and revenue wise are restaurants (hospitality industry) and retail.

While our mid-April Electrical Distributor Market Sentiment report highlighted that 30% of distributor project Q2 decreases of more than 30%, this infers that 70% will be down less than 30%, with some reporting growth!  Not all areas are impacted equally.

And companies with strong balance sheets are being successful, serving customers, some adding inventory and adding customers. In other words, they are taking share.

Given that we’ll be in a recession, it infers that we should turn back the pages of time and reopen the book titled “Recession Marketing”.

A core element of recession marketing is performance-based marketing.

And what better way to market than to support local businesses and “give back”.  After all, distribution is a local business.

Giving Back

We know recession marketing works. Statistics have shown that companies that invest in marketing, and sales resources, during a recession come out of the recession faster and at a higher rate. Essentially, they take market share. They are pragmatically aggressive, innovative, prudent risk-takers and are strong financial players. They are confident that they will succeed and build this psychology into the fabric of their company. Leadership is motivators. This is a mindset.

Historically, these types of leaders are also philanthropists.  They want to give back to their communities.

Combining the two, there is an opportunity that can benefit your community, your customers and help drive growth.

The concept

Develop a promotion or a customer retention initiative or an incentive strategy that rewards customers with gift certificates that are redeemable through 100’s of local restaurants, hence recycling funds within your local community and giving customers additional incentive to patronize local businesses.

And there is a difference in how you structure a promotion, a customer retention initiative or an incentive strategy (and Channel Marketing Group has years of experience in this space, having started in the performance incentive industry.)

Further, customers can distribute the earned gift cards to their employees, or if desired, furloughed individuals, to “spread the wealth”.  And in tough times, helping others is what matters to many.

We have conceived, and can share:

• Different program / earning structures by program objective and duration
  • Promotions are different than frequent buyer programs and incentive programs.
  • Duration is also a key variable
• Communication strategies to drive engagement throughout the campaign
• Approaches to integrate your sales organization
• The ability to administer the program and provide clients the reporting tools to measure success and inform customers
• Implementation funding – Costs for be projected and mitigated.
  • Funding can come through either reallocated co-op / MDF funds that were earned based upon 2019 or committed for 2020 given that many planned marketing initiatives will not occur or occur differently (counter days, T&E, outings, training events, tradeshows, etc.) to finance program implementation expenses.
• Rewards can be funded as a nominal percent of sales as well as through incremental performance, depending upon the model and there is no need to pay significant mark-up on the rewards.

As the economy re-opens, the reward offering can be expanded, or the program relaunched, to support retailers (and yes, exclude Amazon!)

We have launched charity-driven initiatives, that have driven incremental sales for clients, where funds are raised to support local charities.  Customers need to purchase their electrical materials. Why shouldn’t they purchase from someone who is reinvesting back into their community?

Manufacturers

Manufacturers can support their distributors in these endeavors in a number of ways to help drive sales and gain visibility (and more than just adding cash!)

Additionally, some companies have charitable foundations that can support the program (rare, but has happened.)

Or, consider the joint initiative that Ilsco and Intermatic are currently running. (CMG has relationships with many manufacturers and may be able to facilitate something similar.)

And yes, reps could use the same approach for a rep promotional marketing initiative

Time to Pivot

It is time to pivot and position to take share in this “new normal” (yes, we’ll get tired of the phrase). Strong companies can outperform and build good will among their customers. Continuing to service as well as competitively price are keys to success.  Offering a differentiator to add to your preference can be the extra ingredient to further accelerate sales and help you generate the incremental sales and gross profit that drive the bottom line.

Giving back feels good, benefits your community, benefits your local economy, helps your customers and can help increase sales.

Interested in learning more? Need ideas and help implementing? We can help and will not work with competing distributors in a marketplace.