For many small to mid-sized HVAC distributors, marketing has been an after-thought. Something to support sales.
It’s understandable given the business started with salespeople and, for a business to succeed, orders need to be quoted, captured, and processed. That’s the role of sales.
But, for companies to grow, it takes having a strategy and creating awareness so that more customers want to do business with you … and existing customers want to do more.
When thinking about the channel, consider this ..
- Manufacturers focus on what they make
- Independent reps focus on the group of lines they represent (hence their focus is broader than a manufacturers.)
- Distributors focus on the customer and what they want to buy.
Why the difference? Consider the number of lines a distributor represents. He must serve the customer and bring a complete offering to the table.
Understanding customer needs and crafting it into services and solutions that can be purchased is, in essence, the role of marketing.
And yes, a part of marketing is being a fast food shop (QSR) and responding to sales’ needs for sales tools/promotions.
Katrina Olson is a marketing consultant and writer. For the past few years she was the fractional marketing manager for a distributor. Thinking the role would be more “strategic”, she then had to balance the need to sometimes “serve” fast marketing and other times “prepare” fine strategy.
When Distribution Executives Don’t Understand Marketing: The Marketing Drive-Through Fallacy
It’s time to more accurately define marketing for electrical, HVAC, plumbing and other distribution industries. For too long, marketing people have been pigeonholed as producers of pieces. A CEO, president, VP, sales manager, or counter manager calls or emails the marketing department, or worse yet, walks by their office and asks for a thing – a flyer, brochure, email, or social media post.
Often, there’s little planning, goal-setting, or strategy. It’s what they’ve always done, a brainstorm, or a quick reaction to a real or perceived issue. I call it the marketing “drive-through” fallacy. The requester thinks they can drive through marketing and order a quick solution to address their marketing or communications problem. But marketing isn’t as simple as satisfying your hunger for a tactic that may or may not work.
Isn’t it marketing’s job to create flyers, host counter days, and post on social media?
Yes, that is one small part of marketing’s job; along with perhaps producing presentations, buying swag, planning events, and posting on social media. But marketing is (or should be) so much more. It’s determining how the company should be perceived in the marketplace. It’s identifying opportunities based on the CEO’s and/or President’s direction for the company. It’s seeing opportunities for growth and revenue based on daily business operations and customer service interactions.
What, then, is marketing?
You’ve probably heard about the Four Ps of Marketing: Product, Price, Place (distribution), and Promotion. First introduced in 1960 by E. Jerome McCarthy in his book, “Basic Marketing: A Managerial Approach,” the Four Ps, also called the marketing mix, have become a cornerstone for modern marketing theory and practice.
You start with a product or service for which there is a need or that solves a problem for a specific audience that’s large enough to justify producing, offering, marketing and selling that product or service.
You offer that product or service at a price that customers will pay but still allows you to make a profit after paying production, warehousing/distribution, sales, marketing, and operational expenses. The price must be competitive, reflect perceived value, and reinforce the company’s business strategy.
Next, you determine how you’ll deliver your product or service to your target audience—where you’ll place (distribute or sell) them— online, in stores, through a sales force or counters or other established outlets? Recently, we’ve re-evaluated “place” due to COVID, competition from online retailers, and customers’ desire for more convenient options (e.g., job site carts, vendor-managed inventory, pick-up lockers).
The fourth P, promotion, encompasses the tactics used to position, inform, educate, and sell the product or service, such as advertising, sales promotions, PR, publicity, social and traditional media, digital media, signs, catalogs, flyers, posters, and more. It’s the result of research, strategy, goals-setting, and planning, supported by appropriate budget, personnel, time and resources.
Others have added Ps like People, Physical Evidence (proof of quality), and Process (to ensure the customer journey is satisfying). The point is, marketing staff should be knowledgeable about and involved in all four of the Ps, and then some.
Recall that marketing is an executive-level function. That means a chief marketing officer (CMO), vice president, or director should be involved in, or at least aware of, decisions at the highest level of the organization. Otherwise, major opportunities and obligations for sales, growth, profit, and communication (internal and external) will be overlooked.
When executives don’t understand marketing, what’s the consequences?
In a 2020 Deloitte and The CMO club survey of 401 marketing leaders who averaged nine years of experience, 59% said they report directly to the CEO, and 27% report to the COO or president. CMOs report they most often lead C-suite conversations about customer experience (63%) and digital transformation (60%). That’s great, marketers should have a direct line to executive leadership. But what happens when executives don’t understand marketing?
When owners, presidents, VPs and others in executive leadership positions don’t fully understand the roles and responsibilities of marketing, the results can be disastrous.
- Ineffective people are hired or appointed to marketing. Just because someone is good with words or knows graphic design doesn’t make them a marketer. This reflects a simplistic and limited view of marketing.
- Sufficient resources aren’t allocated. Marketing practices continue to evolve and expand, and that requires training, additional platforms and services, and people-power.
- People without the requisite knowledge and background are hired for leadership roles. The term “marketing” is often used very loosely. Someone may claim to be a marketer if their job was making sales calls or placing ads.
- Decisions are based on what’s new or trendy. It’s tempting to rely solely on technologies like marketing automation, Google ads, or social media marketing; but your customers have to be there with you. Some of them are likely not fully digital.
- There is no vision, plan or strategy. You just keep doing what you’ve always done and getting the same results. Or spending time and money on haphazard marketing efforts that yield nothing.
- Marketing is not given direction that moves the company forward. If the executive in charge of marketing has a sales mentality, marketing’s focus will be singularly on sales support with little thought to products or distribution (place) outlets.
- Marketing direction is biased or limited. If the executive in charge comes from an operations or accounting background, they may be more concerned with processes and record-keeping than innovation and growth.
All of these consequences result in inefficient or wasteful spending, wasted human resources, and high opportunity costs because you’re spinning your wheels using tactics that don’t impact the bottom line. How do you avoid these pitfalls?
How do you hire and retain true marketing professionals?
As with hiring any professional, you have options. You can take the time to learn more about marketing so you can find someone with the right qualifications. Or, you can retain a consultant, headhunter or recruiting firm. You can also hire someone with a business, communications, or marketing degree and/or relevant experience in marketing.
Often in distribution industries, people are given or assume marketing jobs without the proper training or education. Of course, you want to hire people you know and trust like family members, friends, or children of friends. And that’s fine if they have the required skills or are willing to learn. But would you hire your friend to do your corporate taxes without the proper training? Or your nephew to defend you in court if he didn’t have a law degree? Would you ask your daughter to wire your house if she didn’t have electrical training and a working knowledge of NEC code?
Granted, you’re not going to get audited, go to jail, or burn your house down by hiring an unqualified marketer; but you will waste tens or hundreds of thousands of dollars on ineffective marketing, not to mention unused co-op (also called market development funds or business development funds), rebates, or marketing group funds.
What should you do if your marketing department is struggling?
Before you fire your marketing department, take heart. Marketing is a professional discipline, but it’s not rocket science. Sure, it’s great if your team has someone with a marketing degree and/or experience, but there are plenty of courses, training programs, workshops, books, videos, online degrees, consultants and more ways to get your team up to speed.
Talk to your team about your expectations and discuss their current capabilities. Do they have the right skill sets, the right type and number of staff, the right tools, and the right training to do their job effectively? If not, develop a plan to get them there and your company will reap the rewards.
Katrina Olson is a marketing consultant, trainer, writer, and marketing/communications/PR problem-solver serving the distribution and manufacturing industries. Reach her at katrina@katrinaolson.com.
Takeaway
- What do you want your marketing department to be … a QSR that is implementation focused or one that contributes ideas to drive growth and achieve corporate objectives?
- Is your marketing department customer-oriented or sales-oriented?
- Is your marketing a cost-center or a revenue and profit-driver?
Every distributor carries essentially the same products (yes, different lines). Most have similar services and all say they deliver good / excellent customer service and are focus on relationships. All have “competitive” pricing. So, what’s the difference? It’s strategy and marketing … how you think and communicate.
Katrina brings up many good points.
