Traditional sales and marketing methods have been hit by an enormous paradigm shift. How should 21st century industrial suppliers respond?
The first innocent ripples were visible in 1992. But it took about 10 years for the momentum to build until a tsunami wave of change hit the traditional world of industrial selling. What tsunami? The World Wide Web.
Industrial suppliers who remained complacent were swept up in the huge tsunami only to be dashed on the rocks because they did not embrace the web. If these companies are still in business, their days are surely numbered. Other industrial companies successfully surfed the wave, learning how to leverage the immense power of the internet to become stronger, leaner and more efficient.
The writing was on the wall for suppliers that paid attention. Their phones weren’t ringing as much. More prospects communicated by email. They didn’t want to be solicited. They wanted to stay anonymous online until they had a need to buy products and services.
So what separates the industrial companies that failed from the ones that not only survived, but thrived? I’ve learnt it’s their willingness to change old sales methods in order to fully embrace this digital world. The companies that do this fastest gain a huge advantage over their competitors. These successful companies don’t hibernate. They innovate and grow. Especially now, in these turbulent economic times, a solid online strategy has become the very life-boat that has saved many industrial suppliers. It has bought them new opportunities, customers and revenue streams from around the globe.
Push vs. Pull Marketing
While traditional “push marketing” otherwise known as trying to warm up “cold prospects” by deploying direct mail and running print advertising campaigns should arguably have a smaller share of a company’s marketing dollars, it’s alarming to see the money still being invested in these largely ineffective methods.
According to the research firm Outsell, company websites are now the key influencing factor in the industrial purchase. Think about it. If your prospects are online, shouldn’t your company invest more time and resources in your online strategy than push marketing methods such as:
- Cold calling by SIC codes or from a database
- Direct mailing brochures/catalogs to prospects
- Attending trade shows
- Advertising in trade magazines
- Sending out broadcast emails
A two percent response rate from a direct mail campaign used to be considered a great success. That doesn’t even factor in the cost of printing the piece and mailing it! While there may be a place for some forms of “push marketing”, these methods will never be as cost-effective as online marketing.
Businesses that leverage the power of “pull marketing” with a well-executed internet marketing strategy including a robust website and use of vertical portals, social media etc. have a distinct competitive advantage that trumps cold calling any day. Why? Because the internet pulls customers who already have a need for your products to your website. A warm prospect certainly trumps a cold one — especially in this sluggish economy!
Getting More for Less
According to B to B Magazine’s 2009 Plans and Priority Survey (published in November 2008) which surveyed business to business marketers about their 2009 marketing budgets, found that despite the recession, only one 25% of them plan to cut their marketing budgets. In fact, 31% plan to increase their budgets and spend more online because digital marketing costs less than traditional marketing and delivers trackable results.
Here are some key highlights of that survey:
- 66.5 % plan to increase their online spending
- 66.3% plan on spending more on website development
- 33.2 % will cut print spending
- 30.5% will cut event spending
- 25.6% will cut direct mail spending
In the 21st century, companies stuck in a 20th century traditional selling rut which relies on word of mouth, print advertising, trade shows and cold calling, are losing market-share. Even if they believe their market is regional and their customers are loyal, the internet makes it easy for these “loyal” customers to find new suppliers online — and for their competitors from down the street or across the ocean to make in-roads into their home turf.
Please feel free to comment or ask questions. I can also be reached on Twitter.
Photo credit: Vera-art
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