BUILDING CUSTOMER LOYALTY BY ELIMINATING CHANNEL CONFLICT

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1 BUILDING CUSTOMER LOYALTY BY ELIMINATING CHANNEL CONFLICT for Marketing in Manufacturing A White Paper by

2 Problem Manufacturers are losing customers due to a breakdown in their supply chain. Solution Align your supply chain behind a united best interest and embrace a closed loop strategy to organize, customize, and measure your marketing communication. How to Add Value Downstream When manufacturers push their products to market, they typically leverage a distribution and sales chain consisting of non-exclusive distributors, dealers, agents and retailers to help them market and sell their goods to the end target the consumer. In a perfect world, each of the four parts of the distribution channel (manufacturers, distributors, resellers and end consumers) would work together to help generate the most sales for the original equipment manufacturer (OEM), which in turn would result in more profitable relations with companies on every rung of the distribution ladder. Channel conflict can distort the stream of communication between a manufacturer and their customer base. Unfortunately, this isn t a perfect world and more often than not, the different distributors and resellers compete with one another. Economic conditions have forced many of these parties into an every man for himself mindset, with companies looking for any way possible to maximize their own revenues. Instead of a well-oiled machine that runs smoothly, manufacturers get stuck with one where the cogs run each other. FISION 02

3 It goes without saying that this channel conflict creates issues with the marketing and sale of products, and it ultimately affects the revenue of the OEM, as well as every other party in the channel. Communication between the different points of the distribution channel is shattered because each member of the chain has its own agenda that it is trying to see through. Furthermore, an inherent distrust for other members of the channel prevents any meaningful understanding or collaboration. The lack of cohesion between the different partners in a distribution chain was further highlighted by a Gartner study. Whereas 85 percent of C-level executives understand their brands and are aligned with them, only 35 percent of distributors and resellers are on the same page. This creates further confusion for the end-line consumer, only 10 percent of whom actually received an accurate and on-point brand message. 85 percent of C-level executives understand brand compliance, whereas only 35 percent of distributors and resellers do. FISION 03

4 This is a core problem that many manufacturers face as they establish their sales channels. That said, using specific technologies such as Fision s distributed marketing automation platform (DMAP) can help OEMs align the other parts of their distribution channels with their own branding strategies. Additionally, Fision can be used to improve communication throughout the brand channel, which allows for better channel operations as well. Distributors are brand-agnostic. They provide value to resellers by supplying them with product, but not exclusively the product offered by a single manufacturer From Manufacturers to Distributors OEMs are in charge of developing products that pique the interest of consumers and creating an overall branding strategy. Manufacturers have a problem, though, in that they typically lack the ability to get their products to the hands of the consumer in a quick and reliable fashion. While they have an idea of whom they are developing products for, OEMs aren t always certain who is actually buying their goods. The introduction of distributors to the equation ensures that a manufacturer s products get to resellers, which know who is buying these goods. However, it also introduces another problem: Distributors are brand-agnostic. They provide value to resellers by supplying them with product, but not exclusively the product offered by a single manufacturer. This frequently puts stress on the relationship between OEMs and distributors. The former often doesn t understand how the latter makes money, and as a result, leverages multiple distributors. Distributors come into conflict as they are forced into greater competition, rather than collaboration. When a manufacturer tries to bring on new distribution channels to increase sales, it causes distributors to compete against each other and/or lose sales, Ralph Olivia, executive director of the Institute for the Study of Business Markets at Penn State, explains. It s sloppy channel management and it makes channel partners angry. FISION 04

5 A problem that many manufacturers face is their exclusive focus on their immediate downstream partners their distributors. This has isolated them... From Distributors to Resellers On the other end of distributors are the resellers. These are the companies that get products to the consumers. They have the knowledge that OEMs want the information on who is buying their products and the time frame over which a purchase occurs. Manufacturers use distributors as a means to get to the resellers because they don t have the right contacts to do so themselves. A problem that many manufacturers face is their exclusive focus on their immediate downstream partners their distributors. This has isolated them from resellers, who are figuratively sitting on mountains and mountains of customer records and data. Distributors realize this and leverage it as a way to stay relevant with manufacturers. The customer data and other information doesn t flow back directly to the OEM. As a result of this isolation, communication fractures throughout the supply chain, and this leads to conflict throughout every part of the chain. When the OEM and reseller are trying to relay sales information to one another, the complexity of the supply chain means it can take days or even weeks as it travels from OEM to marketing, to field sales, to their partners or resellers, and finally to the sales representative. From End to End, What is the Communication Delay? According to our new benchmark study on lead management, 53 percent of leads are getting to sales people within three days, answers Kathleen Hayes, vice president of marketing at BlueRoads. However, 19 percent of leads in the channel aren t made available to a sales person until four to 20 days after the initial inquiry and 23 percent aren t available until after 21 days. FISION 05

6 We ve seen cases where the average sales cycle is shorter than the lead distribution process, which indicates that a prospect is ready to make a decision while the lead is still stuck in processing, she added. While a number of leads are responded to in a timely fashion, BlueRoads research suggests nearly half aren t engaged for days. For many consumers and business prospects, that s unacceptable. As Forbes notes, it s crucial that sales representatives engage leads in a timely fashion. If prospects request information on a product and don t hear back for days, they have likely begun looking elsewhere for a business that is actively able to meet their needs. Even among existing customers looking to purchase new products from a brand they have past experience with, these long communication gaps can seriously damage brand loyalty. Adding Value Down the Stream Most distribution chains tend to be open networks that don t work particularly well together. As previously mentioned, individual parts of these chains each have a variety of different goals and agendas they are trying to accomplish in other words, they are looking out primarily for themselves, rather than other members of the distribution chain. So with that in mind, how can you possibly unite the various parties and get them to form a cohesive distribution channel? At first glance, it may seem like one of those tasks that are easier said than done. The Closed-Loop strategy enables OEMs to build an inclusive relationship with distributors and provide resellers or retailers with accurate brand messaging The closed-loop strategy is one possible solution to this ever-present problem. This approach to the distribution chain ties together all these loose ends it s all about creating trust across the distribution chain, helping to align the various interests with partners. The closed-loop strategy enables manufacturers to build an inclusive relationship with distributors by providing them with the technology they need. It also allows distributors to provide resellers or retailers with the brand messaging that they need to accurately promote products. FISION 06

7 3 Questions for Distributors and Resellers sell both to resellers and end-line customers? parties a fair one for every partner? manufacturer enable my company to succeed in the long run? A direct marketing automation platform (DMAP) can be used as a means to implement a closed-loop strategy within your distribution chain. When resellers and distributors assess their relationships with manufacturers, each party makes a number of considerations. As MarketingSherpa notes, a lot of this is based on financial results do the manufacturer s products sell both to resellers and end-line customers? Is the agreement between all three parties a fair one that at least considers the agendas of every partner? Does the relationship with this manufacturer enable my company to succeed in the long run? Answering these questions with an understanding of the goals of your supply chain partners is an essential start to building trust and establishing a closed-loop strategy. Once you ve gotten your supply chain partners on board, a distributed marketing solution can help because it expedites the marketing process significantly. When new product comes in, resellers can quickly and efficiently create brand-compliant collateral pre-approved by the OEM that will help them engage prospects. Additionally, they can rest assured knowing the manufacturer is monitoring the results and making the necessary changes to ensure they are serving only the templates and assets that are generating the best returns on investment. Technology and the Role it Plays in Expediting Time to Market The lack of means to automatically track leads to sales (commonly described as the closed-loop feedback process) lies at the center of these communication and lead-nurturing issues. Even when dealing with sales directly, tracking leads from the initial point of contact through the final sale can be challenging this issue is exacerbated when dealing with complex channels and a multitude of partners that obscure two-way communication. While a DMAP may not be the be-all, end-all solution, it can greatly help manufacturers as they try to rein in channel relationships, improve communication, align partners and maintain brand consistency. Companies use distributed marketing solutions as an inclusive marketing and sales enablement platform that empowers channel partners to be a part of marketing and sales efforts. At the manufacturer level, marketing executives can establish overarching campaigns for promoting their products. By leveraging rules-based usage permissions and customization templates, however, they can also provide resellers with a means of creating marketing collateral that is highly relevant to their audience. FISION 07

8 For example, two separate resellers carrying a line of products from the same manufacturer may think different goods from within that line will appeal to their specific audiences. With a DMAP, they can both create brand-approved marketing collateral that is specifically targeted to their customer base. This is why a DMAP is so useful for localized marketing it enables resellers to create collateral relevant to both the needs of themselves and their immediate customers. Because the templates and assets used in the creation of this collateral have already been approved by the manufacturer, OEMs don t need to worry about offbrand versioning or any misrepresentations of their companies. Moreover, resellers can also create collateral more quickly because everything has been laid out and established for them there is no delay from inception to customer engagement. New marketing campaigns accounted for 15 percent of time spent, while requests for customized collateral accounted for 73 percent According to a collection of case studies done at Fision, new marketing campaigns accounted for 15 percent of time spent, while requests for customized collateral accounted for 73 percent. After integrating Fision, these two tasks flipped only 15 percent of internal marketing s time was spent on requests for customized materials, while the time freed up was spent on campaign strategy. Overall, companies have been able to devote up to 4x more time to marketing campaigns. While this certain level of autonomy enables end-of-the-line resellers to be more flexible, it also does so without giving up any control at the manufacturer level. FISION 08

9 An Intuitive Interface for Easy Adoption Our product is an extremely accessible DMAP, even for channel partners that may not be very experienced in leveraging this technology. Many marketing automation solution providers approach software development from a utility standpoint they want to make a program that achieves the best results. Our platform has that same utility, but it is also derived from a usability perspective. Fision is very approachable and easy to use, ensuring companies can get the most out of their campaigns. After all, what good is a high-powered marketing solution if you can t even figure out how to use it? With that in mind, our platform provides value by ensuring resellers won t have to hassle with integration it s meant to be used by a wide variety of users, ranging from those on the cutting edge of technology to those who may just casually use computers. Creating highly relevant marketing collateral can be done with mere clicks instead of hours of intensive work, which further expedites time to market. It s a matter of making things as easy as possible for resellers. Even lucrative deals and agreements may go sour if dealing with a manufacturer is a pain in the neck. Fision helps OEMs prevent that from ever becoming a potential sticking point. Fision s intuitive platform is easily integrated with a wide variety of users in all manufacturing, distribution and reseller channels. FISION 09

10 Closing the Gap with Fision Embracing distributed marketing automation enables manufacturers to essentially close the loop on their marketing campaigns. Through its various analytics and measurement functions, our platform enables OEMs to determine precisely what is working within their marketing campaigns and which content is driving clicks, visits, leads, sales and engagement. Moreover, a DMAP records data and generates reports in real-time, enabling businesses to make changes to campaigns as they see fit. If a certain graphic or template isn t generating the response marketers want, they can pull it posthaste. If manufacturers are looking for a solution to help them pull their distribution and sales channels together, Fision may be a pivotal part in implementing the strategy that will solve the problem. Fision can help execute the closed-loop strategy by improving customer loyalty through the alignment of supply chain partners, developing two-way communication with partners and customers, expediting the buying cycle by providing information to customers instantly and providing the required visibility over supply chains that companies need to excel. FISION 10

11 FIND OUT HOW FISION CAN WORK FOR YOU Roy Hogsed mobile: office: