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Marketing 101:

An Introduction to Marketing and Customer Retention

PFW Password - Summer 2008The term “marketing” is nothing if not broad. It can refer to anything from the complexities of corporate branding and demographic research to the simplicity of a sales call. Distilled down to its essence, marketing is simply the process of finding out what your customers or prospects need and then letting them know that you can fulfill those needs.

To be able to successfully market to your customers, it is important to understand the two main goals of marketing as well as a long-standing principle at the foundation of marketing.

First off, the two main goals of marketing are deceptively simple: customer acquisition and customer retention, which is also known as base management. Customer acquisition is about bringing new customers into your dealership; customer retention is giving them a reason to remain a loyal customer. Without retaining and acquiring customers, a dealership will stagnate and ultimately fail.

With either goal, you need to consider the Four Ps of marketing, which are essentially the four reasons a potential or existing customer might have for choosing your company. The Four Ps are Product (whether it is an actual product or a service provided), Price (with an emphasis on value for the customer), Place (whether it is your dealership or the availability of off-site service) and Promotion (which is how your customers learn about you, whether it be through advertising, public relations, word of mouth or point of sale). Any good promotion should include the benefits of one or more of the other three Ps.

Marketing in the Equipment Distribution Industry
To gain a better understanding of the specifics of marketing in the equipment distribution industry, PFW recently surveyed a group of Dealers from the United States and Canada. While every dealership is different and has achieved its own marketing successes and faced its own marketing challenges, the following highlights of the survey results paint an interesting picture of marketing in the industry:

• 96.6% of respondents say marketing is an essential part of their dealership’s success, yet only 13.8% have established guidelines for marketing to new customers after their first visit to the dealership.
  
  
• Websites (96.3% of respondents) and trade magazine ads (85.2%) are the two most popular forms of marketing, while direct sales calls (59.3% of respondents) and direct mail campaigns (33.3%) are the two marketing methods that have been deemed most successful.
  
  
• The three biggest obstacles to overcome when trying to implement a marketing initiative are lack of time (33.3% of respondents), poor communication between departments (25.9%), and inability to capture marketing / customer data (25.9%).
  
  
• For those Dealers who do not currently market to their customers, a lack of marketing experience is cited as the No. 1 reason why.
  
  
• Only 22.2% of respondents have ever used PFW IntelliDealer’s Marketing Module.

Conclusions… and First Steps
While marketing is widely recognized as being an integral part of success in the equipment distribution industry, it seems that most marketing efforts are concentrated on customer acquisition, not customer retention – especially when it comes to customers who are new to a dealership. It also appears that a lack of marketing experience and unfamiliarity with PFW IntelliDealer’s Marketing Module are obstacles that need to be overcome. Hopefully, this issue of PFW Password will act as a first step in addressing those issues and help you successfully market to new and existing customers.