Something strange is happening in the world of B2B marketing. For most manufacturing companies, the way to move product has traditionally been through distribution. Set up good distributors throughout the country or even the world and let their salespeople bring your product to market. For the most part, the system worked beautifully. After all, the distributors had the relationships with the end users. Their salespeople were the people who took the purchasing manager out to lunch (if the company allowed that). In short, they were the face of the manufacturer.
Then, a funny thing happened on the way to market. The web interrupted the path and created a quandary. What if some of our customers want to buy direct? Manufacturers could get giddy just thinking about the margins they would enjoy cutting out the distributor. But wait a minute. Not so fast. Distributors can roll out a long list of all of the benefits they offer: warehousing, marketing, invoicing, collecting, relationship building. The list goes on.
But let’s face it. Today, some of the traditional distributor benefits are simply not there. Many manufacturers drop ship to the customer, thereby eliminating one of the traditional benefits of the distributor—warehousing. Some manufacturers feel that if they are going to ship directly to the customer anyway, do they really need the distributor?
There is a parallel here in the world of politics. It all started with Howard Dean’s campaign for president in 2004. It culminated with Barack Obama’s successful campaign last year. These candidates continued to use their operatives on the Sunday morning news shows and on the 24 hour “news” stations but for the most part, they eliminated the distributor and went direct to the people through their website. Now, add in a heavy dose of Facebook and Twitter and you can be in front of the electorate on an hourly basis.
Maybe I’m reaching to draw a comparison between these two worlds but I don’t think so. One of the reasons that Obama’s campaign grew so quickly is that he took the campaign directly to the people. Is it now possible that some manufacturers could enjoy the success that rocketed Obama to the White House by going direct to their people? We’ll see but some will certainly try. But just because you build it does not mean they will come (sorry Kevin Costner). E-commerce sites need to be heavily marketed to be successful. Since the manufacturer cannot now count on the distributor to take their message to market, that burden now falls on the manufacturer. Therefore, search engine optimization takes on a critical role and all forms of marketing (print, online, direct mail, trade shows, etc.) take on a new sense of urgency. Of course giving the customer a good experience at your site will determine if they return. Nobody said this would be simple.
But at the end of the day, if a number of manufacturers are successful with this tactic, we could see a quantum leap in
e-commerce in our copycat world. It should all play out in the next five years.