Independent Resellers and the Digital Workplace

In this section, I’m about to explain the importance of social activity and social shares. Sometimes described as the “social currency”, or the accounting for information that’s shared by people as they go about their everyday lives and, for which a concise definition was provided by Russ Klein in an American Marketing Association blog:

“Social currency refers to the pull or influence that a consumer has among his peers, and social currency strategies are arguably the most critical point of leverage for a marketer.”

It’s the social shares that make up the currency of the internet and it’s the shares that amplify a message across the expanse of the internet. As also explained by Russ Klein, social currency describes how word of mouth “that has value to a user but then increases in value as that currency is passed along from one to another or, in the most powerful cases, from one to many.”

Look at the example displayed in the image below.

As you can see, this article was shared on LinkedIn 72 times.

Let’s just assume for a moment that the average audience of each of the 72 persons that shared the content is 500 persons. The math is simple (72 x 500 = 36,000) and represents a substantial audience that we couldn’t have placed the content in front of without the amplification the shares provided. Furthermore, each of these shares was made with the implicit endorsement of the sharer, effectively carrying his or her seal of approval before it was placed in front of their personal audiences.

It should be clear, from the title of the article, that the subject matter was focused on the aftermarket office supplies industry. Its initial publication was targeted at relevant LinkedIn Groups and a specific network of Business Supplies and Equipment Industry, LinkedIn members. As such, we know the publication was delivered to a relevant audience, whereupon it was then shared a further seventy-two times to each of the sharer’s respective networks or audiences.

It’s not an unreasonable assumption to make, that the interests of the secondary audience were also significantly concentrated in the area of Business Supplies and Equipment. If this were not the case, then you’d have to ask why these 72 members elected to share the content at all. The underlying behavioral characteristic of a sharer is to help make themselves look good in front of others and they will fail in this goal if they don’t expect the information they share to be relevant and of interest to their respective audiences.

So, I can conclude from this activity, that ultimately, not only were we able to place this content in front of as many 36,000 LinkedIn members, it’s also likely that a high proportion of these members had relevant interests.

A snapshot taken from the “unique visitor” data provided by our Alexa analytics is shown in the chart below. You can see the traffic spiked at the same time as the shares of this content were taking place. This, of course, fits our goal of driving relevant traffic to our website and clearly shows a correlation between the size of the audience obtained for this article and the number of unique visits to our website.

To further help with our web traffic objective, all the content we publish contains links back to other relevant content contained in our blog or elsewhere on our website. Each piece of content also includes at least two “calls to action” that provide access to other, more valuable pieces of content that we’ll provide access to in exchange for contact information such as an email address. If our audience judges our content to be of enough value or interest that they’re prepared to provide us with their contact details and grant us permission to include them on our blog subscription list, then our content has done its job. In it doing its job, we gradually expand our audience and we gradually increase our brand equity. Furthermore, in capturing these details, we are able to subsequently determine whether a contact can be qualified as a sales opportunity or not.

“So long as we maintain the relevancy and quality of our material, then we will continue to expand our audience and continue to increase our brand equity with an ever-increasing number of social shares. This process thereby starts to feed upon itself in a virtuous circle of activity”

As we develop our social currency and authority in our field, we also start to accumulate backlinks from our audience that value our content and insights. These, in turn, help increase our domain authority which, also in turn, then places us higher in search rankings. The whole process is interdependent and, if one piece is missing, or goes missing, it all breaks down. No one shares poor quality, irrelevant content, and no one spends time on poor quality websites. Therefore, it’s logical to conclude, it’s not possible to substantially improve domain authority or organic website traffic without this process being in place.

Of course, there are other ways to reach an audience, but these involve paid advertising which can quickly become expensive, especially if you don’t really know what you’re doing. I’ll be including the subject of paid advertising (which has its role) in the next post in this series (Social Authority) so you’ll then have a better understanding of just how this can be tailored into an overall digital strategy.

Conclusions:

Office products resellers have been extraordinarily slow to adopt modern digital marketing tactics and their failure to use social platforms to communicate their value proposition leaves consumers paying much higher prices for office supplies than they could be. The opportunity to profitably grow small to medium-sized dealerships still exists but, in order to do so, it will be necessary to overcome the current reluctance to use social media, email marketing and modern inbound techniques deployed for the purposes of developing relevant web traffic.

The requirements for digital success revolve around content. Unique, relevant and high-quality content. This is the starting point for digital marketing and also the foundation for developing authoritative leadership positions promoting the story for why consumers should adopt smaller resellers value propositions as opposed to the higher priced “big-box” alternatives.

As I conclude this paper, I’d like to remind you it started with my argument that the Office Products manufacturers and distributors have failed both themselves and the independent resellers. The industry has failed to transform itself for the digital age and it has failed to provide a leadership position for the resellers to accomplish the same for themselves. As a result, the resellers are now positioned for the double whammy combination of losing market share in a shrinking market.

As explained in our recent article The Transfer of Commerce with B2B e-commerce set to grow 45% and eclipse $1.1 trillion by 2020, it’s simply too big a deal to ignore.

Before I go any further, and because this topic is so important for the future of the aftermarket and the office products and business equipment reseller community, let’s look at a definition of just what B2B e-commerce is. As provided by Wikipedia, with italics added for emphasis:

B2b e-commerce (also written as e-Commerce, eCommerce or similar variants), short for business-to-business, electronic commerce, is selling products or services between businesses through the internet via an online sales portal. In general, it is used as a means to improve transactional efficiency between businesses.

If office products and business equipment resellers fail to deploy the systems necessary for participating in this transfer of commerce, then they will necessarily miss out on a share of the business they may otherwise have been eligible to compete for.

Simply deploying a shopping cart site is not enough to satisfy the requirements for B2B commerce. While it may theoretically permit an online sales transaction, it does nothing to improve the efficiency of a business considering a transaction. So, even in the remote chance a resellers shopping cart is organically [accidentally] located from out of the depths of the internet, a transaction will be unlikely to occur because the options available from the site fail the test for improving efficiency.

Any reseller can quickly, and relatively easily, deploy a shopping cart site. There are numerous options available to support this and, as a result, over the last decade or so hundreds of these basic “cart-sites” have been deployed and many subsequently retired.

As I’ve gone to some lengths to explain in this paper as well as in many other blogs, deploying a website and operating it with an objective to develop relevant traffic is not easy. In fact, there are few examples of successful office products or business equipment e-commerce enabled websites within the reseller community.

Option 1, the easy option, doesn’t work and Option 2, the hard one, is mostly beyond the skillset and resources of the typical office products reseller.

Clearly, there’s considerable complexity in accomplishing a digital transformation and, clearly, few office products or business equipment resellers are currently on the right path. Given the complexity, effort, and specific skill sets required, our purpose is to explore what tools and mechanisms could be deployed that may help facilitate and incentivize resellers to start a concerted effort to go down the digital path.

First, we must identify what is the nature of the primary change that needs to occur for the subsequent sequence of changes (that make up a digital transformation) to be able to take place.

As you may not be surprised to learn, the first step in the solution involves money! Unfortunately, there’s nothing else that’s likely to successfully motivate the required changes at the reseller level. This requirement for funds (of course) represents a problem, but it can be overcome as it doesn’t necessarily need to be provided for from additional funds that the industry cannot afford.

Money that already comes into the reseller community via the Tier-1 manufacturers rebates needs to be repurposed and paid according to newly negotiated metrics based on digital key performance indicators.

Repurposing Existing Funds

Unfortunately, it’s not enough to just recalibrate calculation of rebates from a volume-driven plan to an alternative, digital plan. Part of the bargain that needs to be driven (if the Tier-1 manufacturers were understanding of the concept to eliminate volume driven rebates in favor of a suite of digital metrics) must also be to include a demand by the manufacturers for their resellers to implement radically different compensation plans for their sales personnel.

New key performance indicators for the reseller’s sales team must be established that are closely aligned with a series of new digital metrics negotiated by the manufacturers in order for resellers to qualify for their rebates. Everyone here (manufacturer, distributor, reseller, and reseller sales teams) must be dancing to the same tune!

I’ve explained all the key components necessary for a digital transformation elsewhere in this series and now I’ll present a framework for how a rebate plan could be structured to help incentivize resellers to transform their businesses into the digital world.

1,000 resellers tweeting 5 times each per day to a relevant Twitter audience of 2,000 each, can collectively be expected to generate 100,000,000 impressions per month!

The Twitter example above is presented in order to highlight the power of amplification and to open some eyes to the potential of an orchestrated marketing (i.e. OEM conversion) plan at this level of audience magnitude. Note, this example applies to just one social media platform, so think also about the additional audience amplification leveraging multiple platforms such as Facebook, Google+, and LinkedIn alongside Twitter!

Performance metrics can quite easily be established for each of the major elements necessary for a digital transformation. Certifying the validity and accuracy of the performance for the purposes of calculating rebates is a little more challenging but, technically, not that difficult to accomplish.

Just imagine how much improvement a small to medium sized reseller of office products (with, for example, four salespersons) may be capable of if each of the salesmen carried a quota structured along the lines of the one shown in the table below.

Just imagine if 1,000 resellers were all aligned in their goals and launched similar strategies and achieved similar results. This would result in a combined [relevant] audience of nearly 7 million!

Now, that’s an audience of enough scale to make a difference so long as it’s targeted with a clearly orchestrated campaign with clearly defined objectives. One reseller working its socks off in a local market and it’s all but impossible to generate industry momentum. A thousand resellers working their socks off in their respective local markets, backed by a consistent and orchestrated marketing message, targeted at educating consumers on the reseller’s value proposition, is another matter. It should suffice to say, a lot more possibilities open up in terms of the ability to increase general awareness of the value proposition when leveraging a combined audience of 7 million!

Once the sales team is aligned with a compensation plan for achieving audience development goals then the manufacturer (or payer of the rebates) must demand the reseller set other, top-level, corporate goals such as web-traffic, domain authority, and social shares. The manufacturer, now knowing the reseller’s sales reps are aligned with the digital plan, can then restructure the old volume-based rebates far more heavily toward the digital components of the plan.

These digital components may be combined to form the weighted component of a compensation plan that can still be structured to include elements of the traditional sales and profit plans. For example, maybe 70% of the compensation plan is structured toward the digital goals and the remaining 30% tied to sales performance versus quota.

In this compensation plan structure, a smart salesperson will quickly be motivated, not only to focus on developing his or her relevant social audience but, also to start to understand how to use the power of social platforms for researching prospects and their key decision makers well in advance of any direct contact being made.

Read the blog I published on a fictitious office products reseller and its value proposition which explores a scenario for how these tactics may be made to work in a real selling environment.

Issues:

Nothing’s plain sailing and there are always issues and problems to overcome with the development and deployment of new ideas.

• Unfortunately, the existing sources of cash [Tier-1 manufacturers] and the potential new sources [Chinese manufacturers] required for this concept, is currently not likely to be dispensed in accordance with a completely new set of digital metrics because, as we’ve seen, the cash dispersers themselves haven’t mastered the digital world. How on earth can they negotiate a new rebate plan with resellers based on something they themselves clearly don’t understand?
• The aftermarket manufacturers, on the hook for paying the rebates, will incur short-term risk because there’s an unavoidable time lag between audience development, engagement and the subsequent conversion into new customers and revenue.
• Changing reseller compensation plans will be resisted. Although the rebate payers have leverage, the proposal and implementation tactics must be carefully developed and presented.

I don’t believe these issues are insurmountable so long as sufficient positive thought is applied to overcoming or mitigating them. We’re at a pivotal point in determining the future of the independent resellers and what their role will be in the coming years. Furthermore, for there to be a sustainable future for the aftermarket segment of the office products industry, there’s no alternative but for the industry leaders to step up to their leadership roles both for their own sake as well as those of the resellers.

Conclusions:

It’s complex, it’s difficult, and it takes time. Unfortunately, none of these three characteristics are good omens for smaller, relatively unsophisticated resellers to deal with. One-thousand independent resellers (or five-thousand or five-hundred, or two for that matter) should not be expected to solve each of the issues (necessary for a successful digital transformation) independently of each other.

Let’s assume for a moment while staying with the one-thousand unit sample size, that there are twenty major issues or roadblocks in front of a successful digital transformation. A “go-it-alone” approach by one-thousand resellers would require them to solve a collective total of twenty-thousand issues. Of course, that hasn’t happened and it’s never going to happen unless something else changes to facilitate it.

A concerted top-down approach from the industry leaders in providing a turnkey solution that solves each of the twenty issues currently blocking reseller’s transformations, combined with a set of financial incentives designed to motivate the resellers to go down the digital transformation path, is the only realistic way the required transformation can be achieved.

These actions would form the foundations for change that are necessary for the beginnings of a digital revolution in the office products and business equipment reseller community to take place. In establishing these foundations suddenly, and quite simply, a viable path forward would be available to take!