The migration of traditional brands and manufacturers to a direct sales model is an irreversible trend, which varies based on many factors such as industry type, retail environment, and the competitive landscape. That said, over the last five years, we have seen a tremendous shift in product and service distribution models, which has dramatically changed the required skill set of today's competent digital marketing executive.
Let's skip how and why the decision was made to sell direct-to-consumer and assume that it was based on sound market research and a clear company vision. The marching orders are in place, and you need to drive sales through a direct response model without upsetting the delicate ecosystem of the traditional dealer network, or taking a lion's share of resources from the brand strategy.
First, let me point out that there is no formula that applies to all situations. I've had clients implement an aggressive direct marketing strategy that heavily skews lead generation in their favor without reduced dealer support. Conversely, others have only dipped a toe in the water, only to create a viral mutiny that leaves the company with a sales disaster. I have found the following key principles to be the best guidelines for keeping the balance with your retailers, while enjoying a double margin and continuing to build your brand online.
Dealer sensitivities
Open a relationship with the sales department. If your traditional distribution is like most, 80 percent of your product is sold through 20 percent of your reseller base. Interview your best dealers. Be open about your intentions, but be ready to offer sound feedback regarding your company's decision to sell direct. Listen to their concerns and offer to keep a level playing field. This not only reduces the impact of their reactions, it offers insight to your marketing plan.
- Impulse buy -- If your products, or certain product categories, tend to be "impulse online buys," you have an opportunity to capitalize on a more aggressive direct marketing strategy. Dealers are protective of the big sale and know that customers are spending more time price-shopping on high-ticket items.
- Sell on service -- Consumers trust brands. With a proper ecommerce platform and operational support in place, you can rely on this concept to attract direct sales and repeat purchases. Consumers have confidence in a brand's website through security, privacy, available inventory, and service after the sale. After all, your brand is on the line.
- Avoid discounts -- Dealers compete on pricing, selection, and service. Carefully select your price point, and stick to it. By removing the most sensitive component, we level the playing field and build dealer trust.
- Let the customer decide -- A simple change in the prominence of the "buy now" button, in relation to "find a dealer," can make all the difference in the world to that retail buyer. Keep it fair and balanced.
- Offer dealer conversion tools -- Among others, product-to-product links are a great tactic that can increase conversion for your top dealers who get leads through the website. This is a great way to reward the dealer for commitment to the brand.
