I recently spoke with a vendor who wants to offer his company’s direct marketing competencies directly to storefront businesses. His plan is to sell consulting services as well as prospect lists through a live sales force.
It’s an interesting proposition, and I wish him well. Many small firms would benefit from direct mail. But there are endemic hurdles that may prevent expansion from retailer to distance marketer.
The biggest question a salesman is going to face is "Why should I devote time and money to this unknown channel, which really isn’t my core competency?"
For instance, there’s a boutique in my neighborhood that specializes in bath and personal spa items. During the last two years the owner has wanted to create a catalog aimed at female business executives looking for unusual corporate gifts.
The reason the catalog hasn’t gotten off the ground may be that she doesn’t have a direct marketing expert leading her through the process. More likely, though, is that neither she nor her four-person staff have the time to set up a mail order business.
Furthermore, an economic downturn may not be the best time to try to convince a retailer to take a flier on a new channel. Costs can mount fairly quickly for direct mail, especially when outside consultants are involved. And if she decides to devote staff to the project, that’s time not spent with the store’s customers.
Finally, if her campaign doesn’t work the first time, she isn’t likely to follow up. Which means that the vendor’s ancillary sales aren’t going to be there.
It’s not that there isn’t a market for some direct response trappings on the small retail level. My dry cleaner has a great system that allows them to identify me by my telephone number, cutting down the time it takes to fill out the receipts and allowing them to track my business. This CRM software has locked me into them. (That, and the fact that the cleaner is adept at getting a wide variety of gravy stains out of my shirts.)
Godspeed if this supplier is able to make a go of this. But it’s not going to be easy to come up with a compensation package that recognizes that most retailers won’t jump at this opportunity, and yet still allows a live sales force to make a living. I’ll be interested in seeing how he can do this and offer services at a price that will still be attractive to small companies.
To respond to the opinions in this column, please contact rlevey@primediabusiness.com
