MDM Podcast: Marketing Missteps that Cause Channel Conflict

B2B marketing has undergone a massive transformation in the digital age, and amid distributors’ hyperfixation on the customer experience, the need for guidance in this topic has never been higher.

It’s what made our latest MDM Podcast conversation so enjoyable.

The featured guest in our new episode is Alan Hale, who is the President of Consight Marketing Group, which helps B2B distributors and manufacturers conduct actionable market research to gain voice-of-the-customer insights.

Hale’s passion for this topic was immediately apparent, as he didn’t mince words when answering my broad question of “What are distributors doing wrong in marketing?” According to Hale, the answer is a lot, and it centers on points of channel conflict between distributors and their manufacturing supplier partners.

“It seems like a war,” said Hale, who has managed some 250 B2B marketing projects with distributors and manufacturers in his career. “They don’t recognize the other party’s ability to influence the equation. They don’t like to share point-of-sale data. They don’t share marketing. And it’s just a strange phenomenon that I think needs to be addressed.”

Just like the key source of friction between distributors’ sales and operations teams, Hale emphasized that this contention centers on a lack of understanding between both parties, and he suggested that stubbornness and emotion tend to play a central role, when it should instead be centered on actionable customer insights.

“There’s a need to understand the customer — ‘Where are they? How do they buy from you? What is the buying scenario? How do they want to be serviced?’ — before, during and after the sale transaction,” Hale explained. “I don’t see much of this going on with distribution. I see it more being product-focused advertising and web-based. If you don’t understand customer insights, you’re just guessing.”

Hale acknowledged that some distributors are certainly doing a great job with their marketing and customer insights efforts, but they tend to be exceptions.

A good chunk of our conversation focused on social media marketing, where Hale said distributors are too focused on promoting product specifications and boasting about the amount of SKUs they have in their inventory rather than positioning themselves as solutions providers. He quoted former Harvard Business Review Chief Editor Theodore Levitt in saying, “People don’t buy drills. They buy drill holes.”  

“You have to understand the benefit,” Hale said. “I see distributors as among the worst — not all of them — in saying, ‘Here, look at our look at our products,’ and they just lay them out or, or ‘We have a brand new product that does something faster RPM or this or that.’ Why does the customer care? What are their criteria if they’re going to switch brands. The bottom line is, I think both B2B and distributors have a long way to go.”

Again, this comes back to customer insights, Hale said, which is distinctly different than just collecting customer data via surveys or buying behavior data collected in a CRM. Several times in our discussion he urged both distributors and manufacturers to have discussions with a collection of customers to ask about their needs and how they want to be served.

It was a great conversation and I appreciated that Hale wasn’t afraid to be blunt about his takes on this topic.

Listen to the full episode via the audio player above, and check out any of our past MDM Podcasts at our webpage for them here.