Acting big

You don't need a huge marketing department to develop professional-quality marketing materials.

by

The best technology decision John Wiborg ever made may have been to ignore the advice of a technology developer. The technocrat told Wiborg, president of Stellar Industrial Supply headquartered in Tacoma, Wash., that print catalogs were a thing of the past. He advised Wiborg to invest in a Web-based catalog.

Knowing that most of his customers still crowd their office shelves with supplier catalogs, Wiborg was unwilling to place his bet on a technology solution whose time has not yet come. Instead, he continued to search for a way to develop his own catalog, plus use the same content on his company’s Web site.

Wiborg found what he was looking for in SupplyConnect PRO developed by AlaMark Technologies of San Antonio, Texas. Using the software from the subsidiary of industrial distributor Alamo Iron Works, Stellar put together a 740-page catalog, printed multiple product fliers for salespeople to use as handouts, and utilized the same data to populate an e-commerce site on the Internet.

Stellar’s total investment for the software, hardware, content and 1,000 copies of a print catalog was less than $100,000. When you consider that one catalog company wanted to charge him $77,000 to publish 3,000 catalogs, Wiborg believes he spent his company’s money wisely.

The system integrates with Stellar’s legacy computer system, allowing the company to maintain one database that can drive multiple marketing vehicles.

When customers page through Stellar’s paper catalog or click through its Web site, they don’t know it, but some of the images and data they’re viewing flows through SupplyConnect PRO, while other data gets pulled from Stellar’s Prophet 21 back-end system.

“We already have a database on our legacy system. We didn’t want to have another one for a catalog and another for the Web,” Wiborg says.

He believes that having the ability to regularly update catalogs, publish fliers, send broadcast faxes and maintain an e-commerce site will become even more important as the company develops a stronger regional presence. Recent acquisitions boosted sales to nearly $30 million a year from five locations throughout the state of Washington.

“For a distributor that was rather small and working to become a stronger regional player, we’ve got to be good at marketing. SupplyConnect PRO is a huge step forward for us. It gives us the capabilities that only very large companies have,” he says.

Becoming e-nabled
Windsor Factory Supply in Windsor, Ontario, Canada, is another regional distributor that lacks the resources of major national chains. But as a supplier to major corporations, including Ford Motor Company and Lear Corporation, it’s expected to keep up with their technology requirements.

Ford and Lear recently informed Windsor that they expect their suppliers to provide online ordering capabilities. Ford elected to use Datastream’s iProcure automated industrial procurement network, while Lear chose Inverness.

Windsor needed to populate a Web site with products and pricing for its two largest customers. Although some of the data is common — each customer may buy power tools, for example — pricing is unique.

“Plus, the way iProcure wants to receive information may be different from the way Inverness wants that information,” says Mario Azzopardi, who heads up Windsor’s marketing department.

Windsor Factory’s AS/400 back-end system is great at crunching numbers but isn’t designed to handle product photos associated with part numbers. Plant floor workers don’t always know the part number for the product they want to buy, but they do recognize a wrench when they see one. So, Windsor needed a way to link part numbers, product descriptions, prices and images to third party-supported online catalogs.

WFS used SupplyConnect PRO to build custom online catalogs for Ford and Lear. Employees from those two companies can log onto their procurement network, drill down to the supply they need, read a detailed product description, check specifications and place an order.

Once Azzopardi completes the monumental task of populating the database (“You can’t just go to a manufacturer and say, ‘Build me this content,’” he says), he plans to use the software for other projects, such as print catalogs and fliers.

By uploading sales history into the system from its legacy system, Azzopardi can analyze valuable sales and marketing data. For instance, he can identify by standard industrial classification (SIC) code or any number of other categories who is buying what products.

“It will allow us to select, based on SIC codes, certain market segments where we can tailor fliers just for that particular market segment,” he says.

The system monitors customer demographic data such as buying history, contact names and addresses and recent contact activity. Windsor can use this information to target candidates to receive future marketing promotions.

Marketing with the big boys
Despite serving vastly different markets, Windsor Factory Supply and Stellar Industrial Supply share at least one thing in common. Each company recognizes the need to become more sophisticated in its marketing approach. Each company is also just beginning to unleash the power of database marketing.

While both companies quickly learned how to publish print catalogs and fliers, in the future they plan to develop more targeted promotions. By capturing marketing information such as the names and contact information of decision-makers within a customer’s facility and blending that data with sales history from their legacy systems, they’re building a valuable database they can leverage in the future.

There are several ways the companies could utilize such data. For example, they could generate a list of customers who purchased power tools in the last 12 months, then fax each of them a flier promoting power tool accessories.

They could produce sales literature promoting special end-of-the- month or year-end sales targeting that same power tool customer segment.

They could drill down even deeper to pull out any customer who ever bought a DeWalt power tool and use that list to send a promotional piece introducing a new DeWalt product or to sell a discontinued tool. They might even offer to provide DeWalt a list of customers, by SIC code, who responded to a new product launch.

Manufacturers often criticize distributors for their lack of marketing expertise. Utilizing new technology enables even smaller distributors to develop catalogs, fliers, brochures, faxes, online and e-mail campaigns, making them more attractive to suppliers, who might then be more generous with co-op dollars to fund marketing promotion efforts.

This article originally appeared in the September/October 2002 issue of Progressive Distributor. Copyright 2002.

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