This may be one of the most challenging years the industry has faced. While many distributors are focused on productivity improvements and methods to reduce days sales outstanding (DSO), others are implementing new approaches for driving revenue. That's where your invoices come in. They can be a powerful marketing vehicles if you think of them as revenue-generation vehicles instead of just pieces of paper.
The frequency of billing in the distribution market sets it apart from other industries because customers review their bills on an almost daily basis. Because of this, they become a touchpoint between you and your customers. In fact, according to an InfoTrends 2007 survey, 95 percent of bill recipients open their bills and review them for more than three minutes. Imagine if your marketing communication could achieve that kind of a response. The bill becomes more than a piece of paper that communicates how much your customer owes you; it becomes an opportunity to drive demand by delivering a targeted message to a captured audience. Business-to-consumer companies have been taking advantage of this marketing opportunity for years.
Some distributors are starting to use their bill to drive sales. They are placing prominent messages on the bill to promote new products, offer special deals and announce events. Even more impactful, these distributors are customizing their messages based on criteria such as branch, size of customer and location.
One of the most common marketing quotes is from John Wanamaker, the pioneer of the department store concept. Wanamaker said, “I know half my advertising money is wasted, trouble is, I don't know which half.” What would Wanamaker have said if you told him he could place personalized messages onto a document that would be reviewed daily by a large majority of his target audience at no additional cost? You are already incurring the cost of sending your bill. By adding a marketing message you are simply maximizing the value of your “real estate.”
Rockingham Electrical Supply, Newington, N.H., has been taking advantage of their bills as a marketing vehicle for the past few years. According to Jim Pender, the company's executive vice president and chief operating officer, “By taking a strategic approach to the messages we place on our bills, we have been able to achieve double-digit sales increases on key products.” Rockingham customizes the bill messages based on the location of their customer. They rotate the messages on a frequent basis, and have also used the messages on their bills to triple the use of e-billing by their customers, resulting in significant cost savings.
Another distributor aggressively using bill messaging is Northeastern Supply, Golden Ring, Md., which targets customers in the electrical, HVAC and hardware markets. Northeastern rotates its message every month and uses designated space on their invoice to promote selected items such as lighting and boilers. They have experienced sales growth and increased participation at their marketing events through customized bill messaging.
With the challenges of today's economy, it's more important than ever to innovate in all facets of your business to drive sales. For many distributors, the bill is an underutilized asset with tremendous potential. Make sure that your bill is getting the “billing” it deserves.
Mitch Rose is the V.P. of marketing, Billtrust, Jamesburg, N.J., a specialist in billing services for distributors.