One of your manufacturers is planning a new product introduction and is depending on you to move the product through the pipeline. The manufacturer will supply all sorts of help: counter cards, inventory consideration, special spiffs and direct mailers. All you have to do is sit back and watch the product launch take off like a rocket.
Right? Wrong.
You've survived other new product introductions, so you know it's supposed to work that way — in theory. But it never does.
One reason new product introductions often don't meet manufacturer and distributor expectations is because distributors aren't taught how to make the new product “their” product or how it can boost their return on investment (ROI).
As much as manufacturers put into research and development and as diligent as manufacturers are in uncovering product characteristics that meet customers' needs, the distributor makes or breaks a new product introduction. Why? The distributor controls the customer.
More than the manufacturer or rep, electrical distributors control customer interaction and the ultimate sale. Consequently, more than anyone else, the distributor must develop a strategy to introduce new products that transcends what the manufacturer will do. Without this strategy, the manufacturer's work around the introduction can never be as effective as it could be.
Eight steps for electrical distributors can assure success when it comes to a strategy for launching new products.
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Meet with the manufacturer's representative and invite him or her to conduct a training session at your facility. Select two or three individuals (depending on the return you expect from that product) to be trained. Key questions include: Why was this product developed? Does the manufacturer have any regional expectations in terms of sales for your distributorship? What kinds of applications fit this product?
The important aspect of this fact-finding mission is to train the salespeople on everything they need to know about this new product. Complete the training by asking the representative about the tools available to bring this product to market and get those tools in your store.
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Look for immediate cross-sell opportunities. Every product should have a point of differentiation. If the training went well, you know what the differentiation is.
Think about other products you can “cross-sell” for an immediate, effective sales blitz. You have heard the saying, “No man is an island.” In marketing, “No product is an island.” The key to effective sales is effective bundling.
For example, if the new product is a fitting, think about the kind of cable it goes with and how you might bundle it in a promotion. If it's a silicone-filled wire connector, think about giving away samples to your customers to “try out” on their next project. You can't give away a load center, but you might be able to offer a combination purchase with a “filled” load center during a special promotion.
You want to bring attention to the product in ways that go beyond the product itself. This does not detract from the product. Instead, it enhances it in your customers' eyes. Settle on the best bundle, and then move to the third step.
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Announce the product to your customers. Depending on the product and the sales tools provided, decide how you will promote and advertise the new product to your customer base. Should you do a mailer? Take a tabletop at the next trade union association meeting in your area? Visit job sites with the product?
The minimum is an announcement sent to your customer file in the form of a direct mailer. Often, manufacturers already have these prepared for your use; you simply must ask for them. A better solution is to ask the manufacturer for the digital file, and then structure the “offer” to your specific region's needs and your bundle (featuring the manufacturer's new product).
Some manufacturers offer Web-based brochures you can create online.
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Mail the same announcement again. As absurd as this sounds, direct-mail theory and practice tells us that mailing the same list with the same piece will produce extra results. Do you notice when the same thing was mailed to you twice? Of course you do!
Part of the secret of doubling up on a mailing is that it calls attention to itself because of the act of repetition. You can even purchase stickers that say, “In case you missed us the first time…” and then attach them to the second mailing piece.
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Track every customer who purchases the new product. Keep a separate file of customers who buy the new product, and follow up with them a month or two after the purchase.
During your follow-up, ask what they liked or didn't like about the product. Did the bundle add or detract from the product? Then prepare a findings report for the manufacturer.
If the news in the report is good, tell the manufacturer or rep you'd like to develop an extended marketing plan to expand product sales in your territory, and you need some help. When the manufacturer asks what kind of help, suggest meeting with the manufacturer's marketing department manager to outline the basics for an extended marketing plan. Before that meeting, complete the remaining steps.
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Review the customers who purchased the product and find the common denominator. Perhaps the thread is that the products were all used at schools. Perhaps renovation work was the common denominator, or maybe the tie is the golf courses where the product was installed. Maybe your customers found the opportunity through facility managers of commercial buildings for this product. Whatever the common thread, find it and use it. It's the key to your extended marketing proposal.
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Take the common thread and start weaving your plan. Let's assume that the new product was used at schools. Get a list of educational facilities in your territory (available from many list sources by zip code sorts), and then pick your territory's zip codes, as well as four or five zip codes from your main competitor's territory.
Call your customers who purchased the product and tell them this product looks like it belongs in the education facility market, that you want to develop a campaign to get more schools in your area with them, and that you will go to the manufacturer for additional help in doing this. Get a buy in, either privately, or collectively, from your customers. Then, write your proposal.
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Write your proposal for the manufacturer outlining objectives for the marketing plan, your expected results and the expected participation from the manufacturer. In the proposal, explain how you uncovered a key area of application for the product, and you want to attack that market. In return, you want an expanded territory.
Explain how you will enlist your customers in this sales effort. After all, they are the installers who meet with the end users directly. You will need the manufacturer to help develop some marketing tools to penetrate the educational facilities. Given this proposition, manufacturers would be guilty of dereliction of duty if they didn't jump at this opportunity.
Although many distributors don't think in terms of these eight steps, they should. In today's tight economy, distributors must make sales happen.
But, what if the news wasn't good? What if there was no common thread, and the new product's sales were poor despite all your efforts?
Go through the same steps outlined above, but instead of figuring out how to penetrate the market, get your customers to help you figure out what's wrong with the product, its application, or your market.
In both cases, your goal in a product introduction isn't just sales, it's information to play back to the vendor. That information will endear you to that manufacturer. Who knows, you may help the manufacturer develop another new product and gain an exclusive in your market and the market of your competitors.
The next time a product introduction comes along, don't just sit back and wait for something to happen. Make it happen. Take a proactive role in getting that product to market. You'll be rewarded with additional revenue and sales opportunities through your interaction with manufacturer, end user and customer.
The author is president of Accountability Information Management Inc., Palatine, Ill. He can be reached at (847) 358-8558.
DISTRIBUTORS WIELD GREAT PRODUCT INFLUENCE
More than the manufacturer or rep, electrical distributors control customer interaction and sales. Findings from Electrical Wholesaling's 2002 Reader Profile survey illustrate the tremendous influence electrical distributors' salespeople in the field, on the telephone and at the counter have on which brands customers ultimately purchase.
When a customer asks for a brand that a distributor doesn't carry, salespeople can usually successfully substitute another vendor's products. In fact, 44 percent of the respondents said they were successful in doing this 74 percent to 99 percent of the time.
Respondents to the Electrical Wholesaling survey said more than half of the time (54 percent) customers simply provide a product description when ordering a product. One third of the time (29 percent), they specify a single brand while ordering; 16 percent of the time they specify two brands or more.
More than the manufacturer or the rep, distributors can command the destiny of a new product. Without the electrical distributor on board, an electrical manufacturer's new-product launch can never be as effective as it should or could be.
