Don't Ignore Local Team in DRTV Sales
Enter the Internet.
Direct marketers immediately realized and accepted the Internet as the ultimate form of direct marketing. A consumer may view a product in a retail store, then go home and search for it on the Web in hopes of achieving a sizable discount by eliminating the middleman. Though this is still money earned for the company, business owners sometimes think it alienates their dealer base, which creates a problem for many companies.
You hear both sides of the argument almost daily. Businesses are saying either, "We need a direct model," or "By going direct we would put ourselves out of business by alienating our dealers." The truth lies somewhere in between for many companies.
I recently overheard a conversation in which someone was trying to convince a tractor company that by selling its secondhand units directly, the manufacturer wouldn't be eroding its core base of resellers or authorized agents. The Internet, combined with a good direct marketing campaign, has made going directly to consumers easier than ever before.
Most direct marketing-based businesses have developed several options for capitalizing on the Internet. Companies like Avon, Mary Kay and others have developed Web businesses that sell products directly but also compensate the local dealer base for sales made in the dealers' region. Others have decided to sell directly and deal with the consequences later.
There has never been as much focus on this issue, perhaps because direct response television companies face these decisions daily. For example, since I know the brands of the Big Three automakers, as a consumer I should be able to negotiate a deal directly with the manufacturer. However, the problem occurs on the flip side, where, as a dealer who has supported the company for years through good and bad times, I have built my business around the brand I offer exclusively in my market. If the consumer can go direct, at what point is the manufacturer alienating its dealers?
Because of cable proliferation, Internet resources and years of "purchasing decision data," DRTV companies are more effective than ever at reaching their audience. As you define and hone your skills to directly target your prospective consumers via DRTV, it is clear that you can entice viewers to make purchasing decisions on products and services you would have never before considered.
In many cases a company no longer needs that sales team on the ground. Imagine selling insurance via DRTV 30 years ago, or how about directly selling furniture, tools and housewares.
Many larger companies will take part in the direct-to-consumer aspect of DRTV. As you enhance the look and feel of commercials and presentation, companies are less worried about the image associated with direct marketing.
"Using direct marketing to generate new business for our firm has been very successful," said Paul Doolittle, an attorney with Ness, Motley, Loadholt, Richardson and Poole. "We have offices or affiliations in many states across the country. We see DRTV and direct marketing as a way to support our local partners. While we could open offices in each of these territories, it wouldn't be prudent. We maximize economies of scale by utilizing the infrastructure and support teams of our local partners."
The ability to go direct successfully requires many elements of a successful brick-and-mortar business. These include good product, great marketing, an experienced sales team, customer service and the logistical aspects of delivery and returning product while keeping the consumer satisfied. All too often, e-commerce companies enter the field without having these bases covered.
With the threat of losing your local dealers/distributors and, therefore, your base of business, a company should never consider the direct sale approach without having these weapons in its arsenal.
Jim Warren is CEO of The Warren Group, Austin, TX.