Marketing to individual businesses and organizations provides revenue streams for many young businesses, but relying exclusively on that business model may undercut growth.
As business owners begin to establish their markets, they often look for outlets to sell for them. Chris Lambrecht, the business-to-business marketing and strategy consultant at Intelligent Marketing Solutions Inc. in Atlanta, Ga., finds good reasons for developing relationships with distributors. He specializes in working with companies of $20-plus million.
“It’s a matter of cost-sales,” Lambrecht remarks. “With a new product or service, how can you obtain a customer for a cost that’s acceptable for an ROI?” You might not know how to get to customers directly, but want to grow quickly. Distributors can make that possible with customers they know and with their newsletters.
Valarie Moody, owner of Fodeo in Burr Ridge, Ill., watched her peel-and-stick photo frames, made of reusable adhesives like Post-Its, become popular as a retail item and then decided to find companies with established distributor networks. “Selling wholesale is a huge opportunity and the best way to make big sales,” she comments.
Lambrecht advises businesses with new products to identify a niche market, such as a city, to help shape a marketing strategy while not bankrupting the business. “If the niche market doesn’t work,” he observes, “you’re probably not going to be successful. Often you have to join an association, if one exists.”
He recommends industry trade shows for contact-building but stipulates that they can’t be highly general. He also suggests conferences, industry-specific directories and trade journals. “Locating competitors, potential co-marketing partners and even prospects is not difficult,” he comments. “Getting enough information to qualify them is more difficult. Determining how to build a relationship with them is even more difficult.”
The process of researching distributors has been fairly straightforward for Moody. “It just kind of happened,” she reports. After three hours into her first trade show, she’d sold more than 1,000 of a $15 product. Her second trade show proved to be the wrong market, but a distributor’s sales representative came to her booth. She made a $45,000 sale from that one contact.
However, learning her entire market was another matter, because her end-users are the RV generation and college and university students. Moody sat in a booth at a third trade show and watched several distributors as they interacted with other attendees. She found one with the infrastructure, a network in her target market, so she could avoid “developing a sales force and learning the intricacies in the market,” she reports. She’s in negotiation and keeping her eyes open for two distributors in yet another market.
“The difficult part is getting someone’s attention,” says Lambrecht, “because we’re all bombarded with messages. Everyone is everywhere. It’s so inexpensive to send an email. Advertising is much less effective than it was. We use what we call One-on-One Marketing, where we get a non-promotional item in front of a person just to get his attention and educate him.”
He mentions a new, unknown, extremely light auto battery designed to improve mileage and lower freight costs. “I may need to send a distributor a direct mailing of something that looks like a pound of candy but weighs only eight ounces,” he explains, “to make the point that ‘lighter’ can be better.”
If distributors in your market wouldn’t resonate with promotional items or truly value in-person contacts, remember how Moody worked several trade shows. Or do both.
Dr. Mildred L. Culp welcomes your questions at email@example.com. © 2013 Passage Media.