As we get settled into this new year, we thought we’d share observations from conversations we’ve had with manufacturers and distributors recently.  These ten issues are what is keeping them up at night. We believe they are worthy of discussion in 2015 as they are more pressing than ever as competition continues to heat up with current incumbents and the growing competition from start ups. In fact, in order to combat these ever pressing issues and competition, we recently shared our insights on trends for 2015 facing manufacturers and distributors on the Cisco-Eagle Blog.

Rather than Count Sheep, Manufacturers and Distributors Should Face these Issues

Bottom line, it’s great to say you want to have a commerce-enabled site, but before jumping to the technology stage, what is your strategy? Do some research, develop a business plan with some projections & an ROI analysis (multi-year), research solutions, resource appropriately and give it some time … Then market it differently than the rest of your business. The Cerasis “e-commerce” blog category has great articles on developing your strategy. From reverse logistics to pricing, and finally, some solutions. 

It comes down to understanding your value proposition, staking out marketplace positioning, selling your USP internally and externally. Start with gaining insights from your clients, your salespeople, reps, and manufacturers. Conduct secondary research and gain competitive insights … But make sure not to drink your juice! Here is a handy guide from Cerasis Marketing Manager, Adam Robinson, on how to create the Ultimate Social Media and Content Marketing strategy.

The determinant is “what is your vision and time frame” for your company?”

Changes in industry dynamics will drive a “battle” for share of mind (and wallet) of the customer. In the words of one industry executive, “customers are now free agents.” Manufacturers and distributors need to optimize systems and change philosophies to ensure that they are reaching this audience with more than salespeople and media. The audience is discriminating and is seeking “value”, if you know who they are.

Conduct a customer analysis. Review RFM (recency, frequency and monetary value) and understand you need a 2-3 tier marketing strategy as a distributor or manufacturer. Profitable growth comes through taking share beyond your biggest customers (they others may be doing more with your competition) as well as new accounts.

Some think of branding as only their“logo and tagline,” but the essence of the brand is more important. Understanding what others think of you needs to be combined with what you want to be to create your image. And do you want brand awareness or brand preference. We’ve conducted brand preference studies of manufacturers. Branding for distributors relates more to differentiation and value proposition (services-driven) whereas manufacturers are more product category(ies) oriented.

Lot’s of questions here as many manufacturers and distributors are questioning what is beyond promotions, events / seminars and brand messaging. Marketing is about demand generation. It’s not “marketing communications”.  Is your marketing a sales and profit driver?

New products are a margin driver for manufacturers, a differentiator and a reason for a sales call. For distributors, they represent opportunities. The key for both parties is how to get the information to the broadest audience (to the distribution channel as well as to end-users) as quickly as possible … and your sales organization may not be the fastest option!

Margin management, at the gross and net level, is critical to ensuring longevity. Price management, inventory management, process optimization, and utilizing appropriate metrics to drive performance (and compensation) are critical. If you are not an advocate of continuous process improvement and your management team isn’t questioning the existing state of being. Then you are behind the curve.

The most profitable companies in any industry have the strongest customer advocates, high loyalty ratings, and satisfied employees. They are also typically market leaders, have high brand visibility and a strong value proposition … and they attract the best people. What could you be doing better … and are you promoting it?

The issues listed here are a great number, causing several questions from manufacturers and distributors.  All have answers but require asking hard questions and reconsidering legacy approaches. The process starts with exploring where you are, understanding where you want to be and then envisioning the path to get there.”

This posting is adapted from a recent article in Channel Marketing Group‘s newsletter.

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