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Advertising Budget – Spring 2006

What types of marketing/advertising are the best value for a material handling dealership? We all tend to think like an end consumer; however, the market is very different. With so many options these days—Yellow Pages, cable television, radio, print ads, mailers, Internet, inserts, promotional items—and so many constraints on our budgets, how can we evaluate each medium for maximum value?
                                                                     
– Janis Bush, Vice President and General Manager
                                                                                  PennWest Industrial Trucks LLC (North Versailles, PA)

Dave Griffith: Think about a customer survey or focus group where you capture how they find you. Also, we find the Internet and direct mail the most cost-effective. Then we focus on marketing collateral for our reps to help them with presentations and calls. You can also use unique 800 numbers and track material responses.

John Cosgrove: There are so many options available that you can really confuse yourself, as well as employees and customers. Select a clear direction on how you want to present your company to the marketplace and go for it! The first step is to evaluate which media suit your business and your market. I rely heavily on my MHEDA-NET group to help me understand all the different marketing options that are available. Group members have proven to be an invaluable resource, speaking freely about their successes and failures with trade shows, Yellow Pages, direct mail, Thomas Regional and the Internet. After listening to the other nine members of my group, I put together a plan that I thought would help us get the most for our advertising dollars.

Once you’ve developed a plan, stick with it and monitor it. You must track every lead that’s received and evaluate the return on your investment. Determine what works best for you and then dedicate the resources to make it happen. Most plans will fail without a system of monitoring and commitment. A half-hearted attempt often just leads to failure and the loss of large amounts of money. With limited amounts of money available for marketing, it is often hard to make the right decision for your dealership. I recommend that you get into a MHEDA-NET group if you are not already in one. If you are, ask that marketing be included on the agenda at your next meeting. The other professionals in your group will help you make a more informed decision about which advertising medium to use.

Richard Donnelly: In years past, we sent out, at least quarterly, a general direct mail to all our customers and had large ads in the Yellow Pages. Today we’ve cut back on the size of the Yellow Pages ad and are targeting our direct mail. We have invested considerable time and money in our CRM program. This program has the name, address, contact and machine population of all our major and potential customers. We use this program to plan our sales coverage and our marketing programs. We develop our direct mail and send it to specific customers based on product, machine application, industry and product support requirements. We will follow up some direct mail with telemarketing, giving us a chance to answer any questions and to see how effective the direct mail was. We are currently updating our Web site, and e-mail will replace some of our future direct mail.

Chuck Frank: Marketing is part of our annual planning process. Our managers are responsible for outlining their goals, action steps and budgets for the year. After the goals have been approved, the managers meet with our Marketing Coordinator to strategize and discuss how to effectively get our message to our Tier Accounts. The managers work together to evaluate the effectiveness of marketing campaigns from the previous years and solicit feedback from our corporate client survey on likes and dislikes. We provide marketing materials of value and substance to client focus groups, along with vertical markets. We have had limited success in advertising in local trade publications or Yellow Pages. In the Engineered Systems business, you must have sound relationships to win the deal. Most of our clients are not risk takers; therefore, they are not going to risk spending millions of dollars with unknown companies. We spend marketing dollars on success stories, installed sites, our knowledge within the industry and providing information not always directed with what we do. As hard as we work to earn new business, we would be remiss in not staying focused on providing specific information to assist our clients with continuous net gain. Get specific, stay focused and try to do great things for a select few versus okay things for a large number.

Rex Mecham: For the past 20 years we have channeled our advertising emphasis toward the long term. For example, several years ago a corrugated fiber manufacturer purchased a forklift from us. Some time afterward, I became aware that they were having transmission problems, overheating problems and too many maintenance costs. I took the salesman to see the customer. I told the customer that such problems were unacceptable to Arnold Machinery Company, and I replaced his forklift with a brand new one, specifically designed for his environment, free of charge. Several months later, I attended a fleet management seminar and the aforementioned customer was in attendance. While addressing the whole group, the customer said, “If you want to reduce your overall costs and do the right thing, buy your lift trucks from Arnold Machinery Company.” You can’t buy advertising like that. His word of mouth testimonial to his peers was priceless. If you use advertising dollars to overwhelm your customers, the return is much greater than sending a message into the air.

Duncan Murphy: Our industry does not lend itself to accurate measurement of advertising and marketing effectiveness. A campaign rarely induces our customers to buy impulsively. Our direction is to create awareness of our company and our key products. You can informally gather data when answering your phone by asking the caller, “How did you hear of us?” Specifically, we spend about five percent of our operating budget on many of the options you list. We create a plan for the year with some flexibility built in to spend the money.

Dave Reder: We focus on creating a consistent brand message through a variety of media with a strong emphasis on direct mail marketing collateral, and in the future, targeted one-to-one e-mail. We decided to utilize personalized direct mail campaigns that allow us to pinpoint into our customer or prospect’s needs and address our advertising to that message. By using direct mail, we can track our successes, such as which offer and message hits strongest. These data help drive each subsequent round of direct communication we have with that customer.

Stan Sewell: Frankly, general advertising in our industry is not very effective in creating customer awareness of your dealership. We do some specific advertising in a few trade magazines when we are targeting a specific customer segment. We go with the minimum Yellow Pages ad and no radio or cable TV. Don’t forget that professional-looking, well-maintained service vans serve as “rolling billboards” advertising your dealership. Targeted customer and prospect mailers with follow-up telephone calls are where we think we can build better customer awareness.

Ken Shaw: Most material handling distributors struggle in this area. A strong, customer-focused approach has the greatest value. Product or topic-specific mailers or e-mail blasts seem to have the best response and are more economical than mass media. Our industry has a smaller target audience that is easier to reach with strategic strikes rather than a shotgun blast. Once you develop a program, make sure that you are consistent with your message and your brand.

Jerry Weidmann: We researched the buying patterns of our customer base, identified the SIC/NAICS codes of our customers, and segmented customers by the type of product/service they buy. This allows us to contact customers and prospects for the products and services they need and increases sales per number of contacts. We also identify our customers by potential sales volume and have goals for touching customers based on the potential they represent. We will do more contacts through different media with large accounts compared to small accounts. In this way, we are able to increase the value of our marketing by focusing on opportunity.

Some of the market strategies we use that provide a higher price/value relationship include:

  • Increasing online Yellow Pages listings versus advertising in the books;
  • E-mail marketing programs that allow customers to select the products and services about which they wish to stay informed;
  • Internet marketing through our Web site;
  • The use of co-op opportunities with our manufacturers;
  • Using direct mail enabling technologies from our manufacturers. We are able to use graphic designs developed by our manufacturers, customized by us and fulfilled by a direct mail fulfillment house selected by our manufacturer.
  • Tele-sales directed business contacts from our sales staff. Our sales staff submits business cards of target companies, they are added to our database and we telemarket the contacts and set up qualified appointments for our sales staff.

We recommend market research to narrow your market and identify the specific segments you wish to reach. Segment your accounts by the size of the sales opportunity and scale your marketing to the opportunity. Collaborate with your suppliers for the most efficient use of resources, and utilize the best available media for the specific product or service you seek to market.

Material Handling Equipment Distributors Association

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