A long time ago, a lost puppy wandered into the warehouse of a New York independent manufacturers' rep. The scraggly pooch got lucky that day. The sympathetic rep gave the cute pup a nice bath, and he enjoyed plenty of handouts and attention from the company's employees. The marketing executives at one wire and cable manufacturer got lucky that day, too.
That's because the dog had wandered in the warehouse of a rep firm then owned by Dick Noel, now president and founder of Equity Electrical Associates Inc., East Walpole, Mass., and one of the more creative guys you will meet. Always the master marketer, Noel saw more than a lost dog. He spotted a new wire and cable promotion.
“The door was open and in came the puppy,” Noel said recently. “He was dirty, so I gave him to the warehouse guy and I told him to scrub him up. Somebody gave the dog something to eat. The employees loved him.
“I started brainstorming and said, ‘Get me a fire bucket.’ I took the dog and propped him up with his paws hanging out over the bucket, and took a Polaroid photo. I wrote up a little story for a customer promotion called, ‘Name the Pooch.’ The promotion said something like, ‘This little pup wandered in. Now we need a name for him, and we want you all in the act. The prize for the best name will be a 100-foot power cord from ITT-Royal.’
“We did two mailings, and it was a big hit. Someone came up with the name ‘S.J.’ That's the name for one of the most common types of portable cord: ‘16/3 SJ.’”
Dick Noel said this promotion cost him next to nothing; Noel has found in his 50-plus years in the electrical business that great promotions sometimes cost little more than the time you spend generating the idea and getting people excited about it.
Today, that's an easy lesson to forget, with all the high-octane marketing we see every day. But even the most innovative campaigns still come down to someone coming up with a great idea to create demand, and then making that idea a reality.
Keep this lesson in mind when you read this month's cover story, “Marketing Money” (page 18). Electrical Wholesaling explores the use of co-op advertising funds and market development funds (MDFs) in the electrical business. There's plenty of solid co-op-funded marketing programs producing results in the business and no lack of examples of how a distributor, manufacturer and rep are using co-op funds or an MDF-based strategic plan to cultivate a new customer base in a local market.
But let's not be naive. For every couple of examples of an electrical distributor or manufacturer using these funds wisely for their intended purpose, there's probably an example of a distributor squeezing a manufacturer for every possible co-op dollar and then not using those funds for marketing activities — or of off-the-book deals that would not withstand the scrutiny of the Sarbanes-Oxley Act that will go into effect next month.
Yes, it's become a legal issue, too. Section 404 of that law requires public companies to scrutinize and sign off on their internal accounting like never before, and industry experts expect that scrutiny to shine the light in every nook-and-cranny of expenditures for rebates, co-op funds and MDFs.
As you will learn in the article, one company in the food industry was recently fined by the Securities and Exchange Commission (SEC) because of illegal promotional activities. Dutch grocery giant Ahold NV recently settled a case with the SEC over charges that Ahold “fraudulently inflated promotional allowances” at its U.S. Foodservice subsidiary, a large food distributor in the United States.
Don't dismiss this settlement just because you work for a privately-held company. One of the leading experts in trade channel promotions, Rob Hand, president and CEO, Hand Promotion Inc., Austin, Texas, believes private companies may one day soon have to disclose their accounting in these areas, too.
When used properly, co-op dollars and MDF funds are terrific marketing tools for your company and business partners. Play this game straight and you will reap the rewards. Heck, you never know when a little puppy like S.J. may wander in.