Marketers in the distribution industry face a common challenge: proving the value of their efforts by tying them to revenue and growth. While this challenge is not totally unique to distribution, marketers in this industry often have more difficulty justifying their activities because data analysis is not at the same level as it is in, say, retail.
Distributors have smaller customer sets, smaller markets, and as a result, have a less diverse set of metrics to choose from. While retail marketing consists of a great number of activities that can be turned into metrics, distribution marketing is more or less narrowed down to focused marketing campaigns, geographies and sales processes.
Unfortunately for distribution marketers, this is no justification to monitor less metrics. In fact, it means these marketers must drive themselves harder to generate metrics that can be monitored. They need a BI-friendly CRM solution to help them come up with more ways to capture and monitor their activities.
Here are some common metrics that apply to most distributors:
Marketing Dollars Spent per Sale
Customers receiving marketing messages are listed in the distributor’s customer relationship management (CRM) system. Allocating the cost of each campaign to each recipient is the denominator. The numerator is how many sales during the period of study each targeted customer made. This metric is vital to every company. Tracking over time shows when marketing messages are no longer resonating.
New Customers per Campaign Message
Records of new customers are easy to find in enterprise resource planning (ERP) systems. Over a determined period of time, the number of campaigns targeting those new customers is tallied. Tracking of this ratio over time shows changes in how many messages and contact events are needed to capture new customers.
Segment New Customers by Niche or Message Type
Knowing how the market is responding to different communications media is important. Generating new customer sales sometimes depends on getting the marketing message to the right person in the right format. Tracking new customers by which was the predominant and also the last method of marketing communications provides great insight into campaign effectiveness.
Methods or messages that are becoming less effective can be retired or redirected. New messages can be tested, with results being judged empirically.
Sales per Vendor
It sometimes seems backwards, but knowing who the supplier is for products customers are purchasing is useful in crafting messages. As the sales volume for different manufacturers changes over time, the marketing department needs to know. Different campaigns change based on product trends in the served distribution industry niche. In addition, being able to show vendors trends can entice them to give money to joint marketing efforts.
Between their ERP, CRM and other data-generating solutions, distributors have a lot of data to pull from. Useful and actionable metrics do not require an advanced degree in analytics. With a bit of effort and the right reporting tools, you’ll find that fairly simple calculations can provide quite an impact when measured over time.
Read the full article on Toolbox.com for a more detailed look at this topic.
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