Those who know me will recollect that I maintain that Distribution along with Promotions, Sales, R&D and Finance are all interlinked parts of Marketing. I have a story for you today that makes the point.
A well known catalogue and online goods retailing operation were advertising in early October that goods purchased then did not have to be paid for until March 2007 on a “special” “buy now pay later” deal.
They also said that dehumidifiers were available on 48 hours delivery at OK, but not spectacular, prices.
My lady friend therefore ordered one online on 18th October as the weather turned cold to reduce condensation in her home. 3 days later she was told that delivery would be on 14th November not the 48 hours in the catalogues, adverts and on the website.
Imagine how she feels to be told on 9th November that “we anticipate” delivery on 15th January 2007. The “special deal” is beginning to look like pay on delivery! She is, of course, thinking about cancelling and buying elsewhere.
So my question is: – How do you think that she, as a customer, views them as a supplier, especially as she has bought things from them for some years on a regular basis? Deliveries used to be reasonable but recently had become longer and less reliable.
While she has been waiting, all other purchases have been put on hold or diverted to other suppliers. She is considering not bothering with them again.
• Is her impression of the brand good?
• Is she confident to deal with them again?
• Is their reputation damaged in her eyes? And in the eyes of all the people she tells about it?
• Will she believe their promotions and adverts?
• Will she perceive them as providing good value for money?
• Will their price offers attract her in the future?
Of course not!
Now the received wisdom is that it costs up to 30 times as much to acquire a new customer compared with retaining an existing one.
Conclusion: A failure in distribution is resulting in loss of: – business, customer confidence, credibility, as well as wasted advertising expenditure and sales efforts along with increased costs. On top of that if other suppliers have the item in stock this supplier will also lose market share.
Agreed this is only one customer but who is willing to bet that she is the only one in this situation?
(BTW have you noticed how many adverts there are on the TV for dehumidifiers at this time of year – could it be that they are a popular seasonal item?)
My case rests!
First Published on www.ecademy.com by Maurice Watts, the Marketer on 9-Nov-06