Cost of Distribution AttributionSmall (2)

When a Manufacturer shares  sales leads with a Distribution partner expecting results, it can be like dropping a $100 bill on the sidewalk and hoping  someone will track you down to give it back.  Yet thousands of companies do just that without considering the financial implications impacting the bottom line of their organization. 

Consider these cost factors:

Cost Center Description Average Cost
Cost of Lead Generated The cost of generating the sales opportunity (average cost from trade shows/web/email etc.) $200
Lost sales-wrong Distributor Lead sent to a Distributor the End Buyer doesn’t buy from and doesn’t have product in stock $200-$20000
Lost sales-switch to competitor Distributor sells the End Buyer a competitor product because the completion is offering a sales promotion.Your marketing budget is generating sales for your competitors $200-$20000
Lost sales-End User frustration The process is too long-the End Buyer purchases a competitor product from his preferred Distributor Partner $200-$20000
Low perceived value The Distributor Partner doesn’t perceive the lead as a value add because there is no accountability or measurement 1% higher co-op or rebate than necessary
Inability to measure marketing ROI Without drawing a direct line to the marketing event (and cost) generating a lead to sales dollars generated – Marketing is simply guessing where to most effectively invest the spend Marketing waste or lost sales due to reduced budget

It doesn’t take a math genius to see that this process is broken and leaking profit from your company’s bottom line.  So what does it take to fix it?

1)      During the lead capturing process completed by the End Buying customer, build into the response (and landing page) forms a question that asks “who do you prefer to purchase from?” (Which Distributor partner or channel).

2)      If the Distributor they prefer to purchase from doesn’t carry your product, redirect them (either automatically or through your sales force) to the Channel partner that has your product in their stocked warehouse.

3)      Follow-up with the Distributor and the End User with an automated communications process that monitors the outcomes of leads by capturing accurate buy/no buy sales and ‘plan to buy’ pipeline information.

4)      Add the Customer/Distributor relationship data into your Sales and Marketing automation technology to use in reporting sales and executing future co-branded initiatives with those Distributors supporting your brand (such as new product launches).

5)      Keep the sales force (inside or field sales) and Channel Management staff in the loop by providing them with access to individual Distributor lead and sales reports to use when meeting with Distributor partners.

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