As competitors were slashing costs during the economic downturn, a large building materials distributor saw it as an opportunity to invest and gain market share. Small to mid-sized accounts were focused on to increase sales in a group of customers traditionally not supported by their field sales organization.
Investing in growth during a time when the market is contracting is a difficult proposition, but if done properly, can be very successful. The client had considered expanding in traditional areas such as increasing sales resources and distribution points or increasing marketing expenditures, but MMC challenged these traditional methods to provide data driven methods of growing their business. A detailed analysis of sales data in their direct distribution business revealed that larger customers were growing, while smaller customers were decreasing in size. Over 90% of these smaller contacts were declining in year-over-year sales by an average of -20%. Like many distributors, they had a disproportionate amount of their business coming from a select group of large accounts.
MMC used an alternate sales strategy to focus on the small and mid-sized contractors in the client’s customer base. To do this, Channel 80/20 was deployed within the client’s direct distribution business. It intelligently integrated direct marketing with inside sales and focused on underrepresented accounts, markets, and products. The key to its success was the proprietary end-user contractor database built over 20+ years in the building products industry.
On the client’s behalf, MMC built a dedicated team of inside sales agents, a database of contractors, and a marketing communication toolkit. Multi-touch and multichannel marketing campaigns were executed via inside sales, direct mail, Email, and fulfillment methods. Whenever possible, interactions were personalized and delivered on demand.
AT A GLANCE COMPANY TYPE
National Building Products Equipment Distributor TARGET AUDIENCE Small and mid-sized contractors RESULTS -20% Starting annual attrition 24% First year growth 17% Average year-over-year growth in the last seven years of the partnership $200M Incremental sales for program to date 3:1 Return on investment in margin dollars.
INCREASING REVENUE FOR UNDERSERVED ACCOUNTS
MMC handled the full range of customer communications, capturing additional account data during each interaction, nurturing opportunities, closing sales, and analyzing lost leads. Each customer interaction was stored in a proprietary database, which allowed for complete 360-degree campaign planning, execution, and analysis. This analysis enabled ongoing refinement of campaigns and enhancement of the overall program.
MMC not only stemmed the attrition, but delivered double-digit growth with an average of +17% year over year. This significantly outpaced not only the market, but even what the client’s own field sales organization was able to deliver. Overall, over $200,000,000 in incremental sales was delivered, with a return on investment of greater than 3:1 in margin dollars.