Speaking Directly: More from the Business-to-Business conference

The following column, which appears each issue, looks at new and emerging trends in direct marketing. Alternating columnists are Barbara Canning Brown, a leading figure in the Canadian direct marketing industry, and David Foley, a specialist in database marketing programs.Strategy also...

The following column, which appears each issue, looks at new and emerging trends in direct marketing. Alternating columnists are Barbara Canning Brown, a leading figure in the Canadian direct marketing industry, and David Foley, a specialist in database marketing programs.

Strategy also invites other news items or column submissions for this section. Enquiries should be directed to Mark Smyka, editor, (416) 408-2300.

More from Nashville and the Business-to-Business Database Marketing Conference.

Manufacturers that use distributors to move their products from the shipping door to the end-user (whether direct or through resellers) should be acutely aware of the importance of having – and using – a robust end-user database that will increase direct communication between the company and its true ‘customers’ (those who use the product.)

The end-user database is insurance, in an increasingly competitive market.

Jay Gauthier, of ibm and formerly of Lotus Development, offers a second suggestion, joint marketing programs with resellers.

Gauthier believes that individuals most likely choose to purchase on convenience, value (which is the combination of a known brand and a low price), or value-added.

Gauthier points out that being represented in each of these ‘channel segments’ is critical to maximizing market share, since customers will gravitate to the particular channel that suits them best.

He cites several examples of joint reseller/manufacturer programs, including The Lotus Catalog.

Lotus and four major software resellers participated in The Lotus Catalog.

The resellers were given a choice of revenue-sharing formulae, based on sales from the catalogue.

All chose the plan that offered them the highest share of revenue from catalogue sales, for which each reseller provided its end-user list, telemarketing, order entry, fulfillment, billing, credit and collections.

Lotus was responsible for the production and mailing of the catalogue, and product fulfillment (in bulk to the reseller.)

Lotus distributed 150,000 catalogues on behalf of the participating resellers (all of which were personalized and reseller-specific.)

The Lotus Catalog garnered revenue of $542,000 to the resellers and $263,000 to Lotus. Lotus’ promotional expense was $60,000, yielding a net gain of $203,000 to the company. (All dollar amounts are in u.s. funds.)

David Foley is a marketing consultant and an instructor in database marketing at York University in Toronto. He may be reached at (905) 940-8784; fax (905) 940-4785.