Turning the pyramid on its head

Jan. 1, 2020
The original intent of a program group was to pool members' buying power in order to garner a competitive edge, or like in the beginning, just to be competitive with the big-box boys and girls.

The original intent of a program group was to pool members' buying power in order to garner a competitive edge, or like in the beginning, just to be competitive with the big-box boys and girls. I am a member of a large program group, and have been for the better part of two decades. For the most part, I've been very happy. During the last several years, quite honestly, I have been more concerned about growing my business than about the direction of our program group. After some recent soul searching, I think it's time for the "next generation" of program groups to emerge, or for the existing program groups to revamp themselves into something other than glorified advertising programs with signage.

Let's face it — many of our program groups haven't changed very much in the last 25 years. Their core principles remain mostly the same, but our marketplaces have changed dramatically. A lot of us are missing out on technological advances that could be a wonderful addition to our bottom line. As independents, we must insist that the program group leaders shift their thinking in order to develop a new standard of doing business and marketing its members. Also, we must educate the manufacturers so they understand that the end user of their product is not — and I repeat, IS NOT — an automotive jobber or installer. It's the retail customer — the DIYer and the DIFMer.

The flyer program that every group offers is, at best, dysfunctional. Advertising "as low as" products to the masses generates a marginal amount of in-store traffic, but your local newspaper is so full of this stuff, I personally think that 99 percent of these flyers end up in the landfill. Internet advertising makes far more sense, reaches more people, creates less waste, and would be a lot cheaper per member. Coupled with downloadable coupons from a nationally managed site, the potential reach is huge. If you look at the hierarchy of a national program group, its members consist of warehouse distributors, jobber stores and installers or dealers.

The program group works first to represent the warehouse distributors, and indirectly through the warehouse to represent the jobber. Program groups go even one step further, through the jobber, to represent service dealers and installers. All in all, it is a very traditional chain of distribution and command. The only problem? The retail customer is left out of the equation within traditional program distribution systems. We need to change to a programmed marketing system. Programmed distribution can be compared to a pyramid scheme — the guys at the top benefit far more than the guys at the bottom. Most group administrators spend far more time and energy trying to assist top-level members and have somewhat of a disconnect in understanding what the foundation members at the lower levels really need.

First, program groups should gear their sales and marketing programs so to focus on features and benefits. People buy features and benefits, yet only compare prices. If your marketing campaign simply states, "Wiper blades as low as $4.99," it's just a low-ball price. A better method might be to say they are on sale, tout the country of origin (if at all applicable), comment on its toughness, durability or installation policies and provide display materials for the parts store and the dealer! If you want us to sell your products, giving us a price point is just the beginning. Especially with fewer and fewer seasoned pros within our industry, the people working in our distribution system posses about 2-3 years experience on average. Hell, it took me 10 years just to be dangerous, so any help from my group to ramp up the knowledge/salesmanship index is fully expected, given the state of our workforce experience.

Secondly, my dear manufacturers, quit spending money on whacked-out, peel-a-deal promotions and consumer rebates. Do you honestly think that a technician looking at a set of brake pads with a peel-a-deal will buy the pads from you just because it has a game piece attached to it? Really? Even if my price is higher than a competitor's? Installer, counterman and dealer promotions might make you guys feel good about yourselves, but they do absolutely nothing for our bottom line. Are you listening? NOTHING. If you find a jobber or installer that says they sell more of your product when you have these promotions, I will show you a huge ego inflator who is trying to get something for free. I know that a lot of these campaigns aim to build public awareness for your product, but the participation percent in respect to the amount of product sold during the campaign has got to be less than 1 percent. A rate of participation higher than 1 percent would lead me to the assumption that there was a tremendous amount of falsified sales sheets. Again, Internet advertising, TV advertising and dealer locator information combined with proper dealer and jobber signage as outlets for a manufacturer's product will provide sustainable repeat sales for everyone. It won't just target the guy who needs a set of brakes or tires and also happens not to have an IPOD or GPS system.

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Thirdly, point-of-purchase displays that every program group provides the jobber stores are incomplete. The posters are adequate, but there is very little shelf information. It would be nice if my program group could realize that having some "On Sale" cards, labels, or stickers we could actually put on the product to either match the posters, or to highlight another item that is not group related would be convenient, not to mention professional looking. Instead, we must make our own. I have asked our group administrators and warehouse representatives for these kind of product display accessories for many years. Since I'm still complaining about it, you have probably guessed their response.

To sum things up, it's time for us to re-invent ourselves. Better use of technology, more thoughtful sales campaigns that educate the consumer and the sales force and discontinuing ridiculous strategies that reward the top tier of our programs with trips to a hospitality tent at a NASCAR race will actually create a true marketing system. The consumer base is far more savvy, and the workforce we all employ is at an all-time low in regard to skill and knowledge. When these two facts are combined with current group marketing strategy and manufacturer sales promotions, we end up with inefficient, irrelevant and ineffective programs that seemingly are out of touch with what we all really want — more profit, less waste, and a better-educated sales force.

Sales and marketing programs that are only discussed within a board room to punctuate the reason for someone's employment are emblematic of the rational outrage of the Occupy Wall Street movement.

The original intent of a program group was to pool members' buying power in order to garner a competitive edge, or like in the beginning, just to be competitive with the big-box boys and girls. I am a member of a large program group, and have been for the better part of two decades. For the most part, I've been very happy. During the last several years, quite honestly, I have been more concerned about growing my business than about the direction of our program group. After some recent soul searching, I think it's time for the "next generation" of program groups to emerge, or for the existing program groups to revamp themselves into something other than glorified advertising programs with signage.

Let's face it — many of our program groups haven't changed very much in the last 25 years. Their core principles remain mostly the same, but our marketplaces have changed dramatically. A lot of us are missing out on technological advances that could be a wonderful addition to our bottom line. As independents, we must insist that the program group leaders shift their thinking in order to develop a new standard of doing business and marketing its members. Also, we must educate the manufacturers so they understand that the end user of their product is not — and I repeat, IS NOT — an automotive jobber or installer. It's the retail customer — the DIYer and the DIFMer.

The flyer program that every group offers is, at best, dysfunctional. Advertising "as low as" products to the masses generates a marginal amount of in-store traffic, but your local newspaper is so full of this stuff, I personally think that 99 percent of these flyers end up in the landfill. Internet advertising makes far more sense, reaches more people, creates less waste, and would be a lot cheaper per member. Coupled with downloadable coupons from a nationally managed site, the potential reach is huge. If you look at the hierarchy of a national program group, its members consist of warehouse distributors, jobber stores and installers or dealers.

The program group works first to represent the warehouse distributors, and indirectly through the warehouse to represent the jobber. Program groups go even one step further, through the jobber, to represent service dealers and installers. All in all, it is a very traditional chain of distribution and command. The only problem? The retail customer is left out of the equation within traditional program distribution systems. We need to change to a programmed marketing system. Programmed distribution can be compared to a pyramid scheme — the guys at the top benefit far more than the guys at the bottom. Most group administrators spend far more time and energy trying to assist top-level members and have somewhat of a disconnect in understanding what the foundation members at the lower levels really need.

First, program groups should gear their sales and marketing programs so to focus on features and benefits. People buy features and benefits, yet only compare prices. If your marketing campaign simply states, "Wiper blades as low as $4.99," it's just a low-ball price. A better method might be to say they are on sale, tout the country of origin (if at all applicable), comment on its toughness, durability or installation policies and provide display materials for the parts store and the dealer! If you want us to sell your products, giving us a price point is just the beginning. Especially with fewer and fewer seasoned pros within our industry, the people working in our distribution system posses about 2-3 years experience on average. Hell, it took me 10 years just to be dangerous, so any help from my group to ramp up the knowledge/salesmanship index is fully expected, given the state of our workforce experience.

Secondly, my dear manufacturers, quit spending money on whacked-out, peel-a-deal promotions and consumer rebates. Do you honestly think that a technician looking at a set of brake pads with a peel-a-deal will buy the pads from you just because it has a game piece attached to it? Really? Even if my price is higher than a competitor's? Installer, counterman and dealer promotions might make you guys feel good about yourselves, but they do absolutely nothing for our bottom line. Are you listening? NOTHING. If you find a jobber or installer that says they sell more of your product when you have these promotions, I will show you a huge ego inflator who is trying to get something for free. I know that a lot of these campaigns aim to build public awareness for your product, but the participation percent in respect to the amount of product sold during the campaign has got to be less than 1 percent. A rate of participation higher than 1 percent would lead me to the assumption that there was a tremendous amount of falsified sales sheets. Again, Internet advertising, TV advertising and dealer locator information combined with proper dealer and jobber signage as outlets for a manufacturer's product will provide sustainable repeat sales for everyone. It won't just target the guy who needs a set of brakes or tires and also happens not to have an IPOD or GPS system.

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PAGE 2

Thirdly, point-of-purchase displays that every program group provides the jobber stores are incomplete. The posters are adequate, but there is very little shelf information. It would be nice if my program group could realize that having some "On Sale" cards, labels, or stickers we could actually put on the product to either match the posters, or to highlight another item that is not group related would be convenient, not to mention professional looking. Instead, we must make our own. I have asked our group administrators and warehouse representatives for these kind of product display accessories for many years. Since I'm still complaining about it, you have probably guessed their response.

To sum things up, it's time for us to re-invent ourselves. Better use of technology, more thoughtful sales campaigns that educate the consumer and the sales force and discontinuing ridiculous strategies that reward the top tier of our programs with trips to a hospitality tent at a NASCAR race will actually create a true marketing system. The consumer base is far more savvy, and the workforce we all employ is at an all-time low in regard to skill and knowledge. When these two facts are combined with current group marketing strategy and manufacturer sales promotions, we end up with inefficient, irrelevant and ineffective programs that seemingly are out of touch with what we all really want — more profit, less waste, and a better-educated sales force.

Sales and marketing programs that are only discussed within a board room to punctuate the reason for someone's employment are emblematic of the rational outrage of the Occupy Wall Street movement.