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Small Industrial B2B distributor gets paid by principals for Internet referrals.

24th of February 2002

This is a small American 4 man niche industrial distributor, not a "pay for placement" search provider or a volume components distributor with a large promotional spend.

Run by experienced sales and marketing professionals who focus on keeping their website well positioned for their target niche, this American industrial distributor now generates such a significant volume and quality of referrals for their overseas principals that .. more >>>>

.... they now charge their overseas principals for referred sales enquiries generated by their website.

This sales organisation (let me call them XYZ) now does pretty much all its selling and qualification via their website and email correspondence.

They rarely go to trade shows and even more rarely meet customers face to face until the customers are proven real or potentially important accounts.

With estimates of the cost of a salesman's visits often at an average of £150 per call you can clearly see why there is a benefit in focussing expensive "face to face" time only on important accounts.

The reasons for my American friends change of approach is that stretched engineering and purchasing staff in their clients simply no longer have the spare time to meet potential suppliers when...

.. a couple of emails or a search through Internet search engines can locate suppliers and sort out issues - at THEIR convenience.

XYZ Inc have built their website and product search engine exposure, over a couple of years, to such an extent that now potential European customers are finding XYZ's European principals via the XYZ Inc website (not via the European principals own websites which lag far behind).

The European principals are now having to pay their US distributor, XYZ Inc, for their own European sales leads and referrals!

Some of the European partners concerned apparently used to be concerned that their American resellers were not out wearing out shoe leather, door to door, face to face. But with:

trade show attendences falling (not just in the US)
buyers and engineers meeting fewer reps
increasing use of internet search to find solutions

... XYZ Inc are proving, in a very amusing way, how vital it is to build Internet search engine position and attain strong exposure for your targetted product area. My experience in European industrial sales and marketing supports the argument that this trend is becoming established in Europe.

I find this troubling for the state of European Internet marketing.

It supports the view that European Sales and Marketing professionals have yet to find viable models to evaluate the Return on Investment for their Internet investments.

Get with the programe folks! don't miss the boat!

Author Mark Abraham (mark@sticky-marketing.net) 23 February 2002

Return on Investment for Internet Marketing?

Note: I have started bending my mind to calculating return on investment for Internet Marketing. I have started to create formulas and arguments to financially evaluate internet projects for industrial B2B companies such that comparison to competing internal investment proposals can assist decision making.

If you run an Industrial B2B marketing department and would like to learn more, drop me an email with your details.