Garlic Marketing Show · 2026-05-01 · 39 min
Key moments - from our scoring
Substance score
59 / 100
Five dimensions, 20 points each
Industrial distributors historically leave millions in co-op marketing funds unclaimed from manufacturers. This episode reveals how one Edmonton-based electrical distributor and a Honda generator supplier weaponized these "free" dollars through systematic customer analysis and integrated campaigns. The key strategy involves identifying high-propensity customer segments using transactional data analysis and third-party firmographics - what speakers call the "customer cloning process" - then flooding those segments with consistent, focused messaging across email, social media, and print. For the Honda case, a weekly email campaign spotlighting one generator feature per week (across 8 weeks) paired with video content and targeted social posts on LinkedIn drove 300% order increases despite limited budget. The episode covers real tactics: clickable catalogs that blend print comfort with e-commerce conversion, distributor social media baseline strategies that earned a $190M enterprise opportunity for Shively Brothers, and vertical market campaigns (like 3M tamper-proof tape for food processing vs. pharma). Speakers Tim and Kristen explain why most independent distributors abandon e-commerce (many hit <1% adoption) while Grainger dominates with 50%+ online volume, and why LinkedIn outperforms Instagram in B2B industrial channels.
Less than 10% of independent distributors claim available co-op funds despite manufacturers making them known, often because distributors don't understand the programs, lack marketing expertise, or underestimate ROI potential. Many manufacturers default to 'show me something and I'll think about it' attitudes, requiring distributors to make a business case rather than face a formal program.
Use market segmentation studies that analyze three years of transactional sales data, augment it with third-party firmographic data about customers, then calculate purchase propensity indices (anything over 120 is statistically significant). The 'customer cloning process' identifies existing customers with strong buying patterns, then locates similar prospect profiles in your geographic territory who don't yet buy from you.
Orders increased 300% and sales increased 168.7% over eight weeks; the distributor sold out of inventory. The campaign used weekly emails targeting one product feature per week, each with a link to a product overview video, plus coordinated weekly posts across social media channels (primarily LinkedIn).
Most independent distributors operate e-commerce channels that account for less than 2% of sales, while Grainger generates over 50% online (and once ranked as the 17th largest e-commerce site globally). Independent distributors lack momentum, face high technology investment costs (often $100K+ just for PIM and platform), struggle to drive adoption among older sales teams unfamiliar with digital selling, and many end-users still prefer phone/relationship-based ordering.
A clickable catalog is a digital version of a traditional print catalog that allows users to click on products to link directly to e-commerce pages, product videos, and detailed specs - combining the familiar interface of print with digital functionality. They work because older sales teams and end-users find them intuitive, and distributors report 20-40% sales increases on targeted categories when using them.
Our reviewer’s read on each dimension, with quotes from the episode.
The episode contains meaningful business insights about co-op fund optimization, data-driven market segmentation, and digital marketing tactics for industrial distributors. However, it includes considerable filler (intro/outro, repeated questions, extended explanations of basic concepts) that dilutes the insight-per-minute ratio. The core ideas about 'customer cloning,' clickable catalogs, and co-op mechanics are substantive but presented in a somewhat meandering fashion.
We do a market segmentation study that takes three years of transactional sales data, augments that with third party information about our Customers, end users. And then we look for correlations and we look for sweet spots in their business.
So we might see that, you know, fabricated metal manufacturers with between 500 and 1,000 employees have a substantially higher index than the average general manufacturing company.
The core approach of using manufacturer co-op dollars for integrated marketing campaigns is not novel; however, the specific execution framework (market segmentation tied to co-op spend, the 'customer cloning' process, and clickable catalogs as a bridge to e-commerce) shows some thoughtful methodology. The insight that 'lurkers are lunkers' and focus on LinkedIn for industrial B2B is sound but fairly standard. The ideas recycle common distribution channel wisdom without strong contrarian or first-principles thinking.
This is Moneyball for industrial ish distributors. This is really getting smart about where you're investing your dollars.
If you look at yourself as a consumer of digital media, if somebody's always trying to sell you something, unsubscribe, unfollow... but if you inform me or you educate me or entertain me, I'm going to pay more attention.
Tim and Kristen from Rivet MRO appear to be practitioners with direct experience implementing these strategies at scale across multiple distributors. They have concrete case studies and operational depth in co-op program management and integrated marketing execution. However, they are essentially vendor/service providers discussing their own offerings rather than independent operators sharing hard-won lessons, which limits caliber somewhat. No external experts or client founders are featured.
When we were at ITW, less than 10% of our independent distributors claimed co op funds
We had one recent Canadian electrical distributor in Edmonton... they said, you know what, we have an extra $30,000 in our budget that didn't get claimed.
The episode includes strong specific examples: the Honda generator campaign (300% order increase, 168.7% sales increase), the safety distributor DuPont catalog (20-40% increases), the $190M opportunity from LinkedIn, the packaging distributor 3M case (56% increase), and Richard Supply metalworking initiative. However, many other claims lack hard numbers: the claim about 'everything doubles' for customer cloning, the 300% social engagement spike, and various statements about market penetration are unquantified. Some metrics are vague (e.g., 'between 30 and 60 thousand dollars in co op' for average client).
We increased orders by 300% and sales increased 168.7%
We did a clickable catalog for a safety distributor in the Midwest and they saw a 20% increase in. So this is focused on DuPont PPE. They saw a 20% increase across the line for DuPont sales in 60 days
The host (Ian Garlic) asks reasonable questions and shows enthusiasm, but follow-ups are often superficial or ask the guest to simply elaborate on existing points rather than probe deeper. Questions like 'How does that work?' or 'Tell me about X' are soft and permissive. There is minimal push-back, challenge, or productive disagreement. The conversation feels more like a structured product demo than investigative dialogue. The host occasionally interjects with supportive comments (e.g., 'Yeah, I think that's important') rather than testing claims.
Um, and so now you know, obviously we have these, we've talked about kind of traditional sales. Obvious you mentioned digital. But where now does digital impact come in?
Wow, that's, that's amazing. And I think, you know, we, we talked about it...
Computed from the transcript - who did the talking, and the words that came up most.
How do distributors find better leads and close deals faster? Tim Rasmussen, Founder of Rivet|MRO, explains why most distributors struggle with lead quality and how data changes that process. By analyzing real customer data and identifying high-value segments, teams can target prospects that are more likely to buy. This approach, often called customer cloning, helps sales teams get into accounts faster, close deals sooner, and increase order size. In some cases, results include a 300% increase in orders and significant sales growth. The episode also covers how clickable catalogs and digital tools support sales and how a consistent social media presence builds credibility. In one case, this led to a $190 million opportunity from a prospect that had been watching over time. This is part two of a two-part series on how distributors can use data, digital tools, and co-op marketing to drive sales growth without increasing spend.
Transcribed and scored by The B2B Podcast Index.
Speaker A: Join Ian Garlic as we uncover the
Speaker B: hidden marketing stories that shape our world.
Speaker A: Reveal the latest marketing tactics that will
Speaker B: shape your future and the amazing people that grow organizations, movements and businesses. Learn to grow your business and shape
Speaker A: the world around you.
Speaker B: Welcome to the Garlic Marketing show with Ian Garlic. And yes, it's Ian, not Ian, that's marketing too.
Speaker A: When we were at ITW, less than 10% of our independent distributors claimed co op funds even though we made it known that they were available. So let's plug it at 3%. That's probably generous. You have to sell a million dollars worth of product to earn $30,000 to spend on marketing your business. We had one recent Canadian electrical distributor in Edmonton. They liked what they saw and they saw results with it last year. At the end of the year they said, you know what, we have an extra $30,000 in our budget that didn't get claimed. We'd like to give it to you because we know you're going to use it. Well, if I told you I could give you a slam dunk $1 million sale, how much time and effort would you put into pursuing that sale? And the answer is, yeah, go for it. And then that vectors up if they're a bigger distributor.
Speaker B: Empower sales team and I know we talked about before, but you help them to find additional leads, you do some data analysis, explain to me how you know a, uh, distributor can find additional leads.
Speaker A: So I'm going to turn this into two questions if I can. Yeah, um, so when you say additional leads, there's two way to look at that. Two ways to look at that. Number one is additional co. Op. So manufacturers have three attitudes towards co op. Yes, we have a formal program. Here's a copy of our rules, here's how we calculate the funds and approved uses. Check. The other prevalent attitude is forget about it, check. We'll move on. You know, 20, 25% fit those two descriptions. And the vast money middle say, well, show me something and I'll think about it. And one of the things we're really good at is making the business case in demonstrating that this is an investment, not a cost, and showing the promise of a return for both the manufacturer funding the project and for the distributor. So that's additional leads from that standpoint. But what I think your original question was additional leads for the distributor. And so we do, uh, some pretty heavy lifting from a data analysis standpoint. We can do a market segmentation study that takes three years of transactional sales data, augments that with third party information about our Customers, end users. And then we look for correlations and we look for sweet spots in their business. And so we might see that, you know, fabricated metal manufacturers with between 500 and 1,000 employees have a substantially higher index than the average general manufacturing company. So we look at an index as a propensity to buy. And we're looking at statistical, um, progressions here. And anything over 120 is considered statistically significant. We'll see indices in the high hundreds or even in the thousands. And so then we look at that, we say, okay, cool, our story resonates here. And then we look at the data. We have a lot of customers like this, so we know the story to tell. We know this audience well, and they buy a lot of stuff from us and they're likely to buy. We have high market penetration. Then we look at it and say, okay, let's look over here. How many customers fit this same profile but don't do business with us within our geographic footprint? Let's market to those people, um, and let's market to those people through the lens of the types of things that they buy. So if I'm a fabricated metal manufacturer, I'm interested in this set of products. Now as a distributor, I might sell all these things, but I don't care about those things. I care about these things. So we position the company through the lens of the things that they buy. And our intimate knowledge of that particular market segment, our ability to drive solutions. And so we call this the customer cloning process. So, you know, we analyze, you know, the top two or three markets that have high indexes and also high, um, available market to pursue and then create targeted campaigns designed to drive that. And what we see is everything doubles. We get, we get in in half the time. And when we get in, we sell twice as much in half the time, you know, using these targeted marketing initiatives.
Speaker B: Wow.
Speaker A: So that, that's one example. So with, you know, with mid states, we had some co op dollars, we did some, some analysis and we identified lead sources. And we didn't even do the targeted marketing campaign. Well, we did a little bit, but it was, it was modest. Um, but they universally, their sellers said, this is the best lead list we ever got.
Speaker B: Wow. I mean, as a salesperson, that's the number one thing you want, you want to look great, but you want a lot more leads. And I bet they were pretty happy. I think this is an important thing to think about for anyone that has a sales team, whether you're a distributor or not, is supplying how much you Empower, the sales team is a multi and we mentioned it before, but it has a multi aspected effect. It has a rippling effect. It's not just that lead list, it's now that they get momentum. And if you've ever worked in sales, you know, momentum is important. Um, and how did that ripple through with Mid State? Because I think that's an underestimated thing of hey, yes, we're going to give them new market materials and they're excited and we're going to get them a lead list. But it has a lot a bigger effect than just the two of the things.
Speaker A: So when we're able to define a market segment with disproportionate opportunity, then we can do targeted marketing and support additional selling efforts there. And so we just pile on year after year. So Kristen is working um, with one of our clients in Texas, Richard Supply. And we identified it's uh, metalworking I think is a key industry segment. So talk about the tools that we developed for them to create more opportunities within that market subsegment.
Speaker C: Sure. So we worked obviously with uh, their data, identified you know, a targeted list, um, of prospects. And so based on that list we also then went to build several different marketing tools um, that the sales team could then utilize in selling into what essentially is this new market for them. Um, so, or I guess really customer base for them. It's not a new market but customer base for them. So we developed everything from um, video targeted email campaign. We've done um, a couple different versions of printed materials, um, based around the actual focus of metalworking and really just defined that messaging for the sales team.
Speaker A: You see the movie Moneyball?
Speaker B: Oh yeah, I love it.
Speaker A: So this is Moneyball for industrial ish distributors. This is really getting smart about where you're investing your dollars. So we do this analysis. Then we take co op dollars and say okay, you, here's how we drive disproportionate results within these key marketplaces.
Speaker B: Um, and so now you know, obviously we have these, we've talked about kind of traditional sales. Obvious you mentioned digital. But where now does digital impact come in? Especially like the catalogs you're mentioning to empower a sales team. How does that work?
Speaker A: Yeah, so this space really struggles with conversion to digital channels and specifically to E commerce. Uh, I think I might have mentioned earlier that most independent distributors, if they offer e Commerce, maybe 2% of their business volume flows through E commerce. Now if you take a look at what Grainger says about itself, they say, you know, more than half Their business is through E commerce. Uh, so there's a big disconnect between the large industrial or the large national distributors versus the local ones. And part of that is simply momentum. Grainger. At one time, I don't know if this number is correct but at one time it was the 17th largest E commerce site in the world.
Speaker B: Wow.
Speaker A: It wasn't the 17th largest distribution e commerce site. It was the 17th largest e commerce site in the world.
Speaker B: Wow.
Speaker A: So that, so there they are. They define excellence in E commerce within the distribution space. And our clients are fighting, they're swimming upstream against that. And it's required an enormous investment for them to get to that point. Point. And many of our clients have really struggled with gaining adaption. We have one client that spent over $100,000 just building their e commerce tool and getting the PIM squared away and had less than 1% of their sales. And it just didn't make any sense for them to continue sinking money into this. So they pulled the plug on it. And we've seen that time and again. Um, those that are getting some traction are having to feed it with marketing. So we talked about the nature of the sellers in this space and they tend to be older and they tend to be old school and they might talk about the website but they don't understand how to sell the value of it. And many of the customers that they're seeking aren't necessarily looking for E commerce as a channel to engage in. Um, so part of what we have to do is help them sell the value of it and make it easy to connect. So we, one of the things that we do and we've had some real success with is the creation. We call them clickable catalogs. And it's, it's what it sounds like. So visually it looks like a print catalog. And often time, oftentimes we will both do the digital version and we will do print versions. These guys still love print catalogs. Print is not dead, I can assure you. And um, so it looks like it and you know you can, but you can click through it and we have links then to that particular item that's in the catalog directly into E commerce. And we also have links to videos and other rich information about those products in case a consumer wants to or an end user wants to learn more about the product. Um, so we find that the clickable catalogs are a good bridge because it's comfortable tool. You're not navigating a website, you're navigating through a catalog and then clicking on the Button of the thing that you want to buy. So we're seeing those conversions there. We did a clickable catalog for a safety distributor in the Midwest and they saw a 20% increase in. So this is focused on DuPont PPE. They saw a 20% increase across the line for DuPont sales in 60 days with this catalog. And then targeted products saw more than a 40% increase. Um, so, you know, substantial response there. So we work with industrial supply company in Salt Lake City and we've been doing a clickable catalog for them for years. And we take their base catalog and then we use co op dollars to increase the size and scope of the catalog. And the bigger the catalog becomes, the more valuable it becomes because the more information that's in it and we design them to be easy to access. So we create a product iconography. And that iconography menu is across the top of every page. So you might be in the abrasive sections, but, oh, I need PPE. With that you can click on the PPE icon and go straight to that and look for those things. And then we cross index it on a manufacturer by manufacturer basis. So you can, you can, uh, you can search, um, both from a manufacturer standpoint or from a product type standpoint. And then you can actually just search from within the catalog on keywords. So extraordinarily user friendly. And then we train them in terms of, you know, add this link to your email signatures and share this repeatedly on social media and send it out via email and train your sellers to get these, your customers to download it and save a shortcut to their desktop.
Speaker B: Oh, smart. And yeah, and it's, and one comes back to training. So, you know, where does social, social media, does that come into play here?
Speaker A: Absolutely. Chris, you want to talk about that with, with our, our Honda case study?
Speaker C: Yeah, sure. So we did a, um, Honda, um, case study as to Tim mentioned that noted the success of a campaign that we implemented based on a client that we had. Um, they had an inventory of Honda generators. And these generators had some very unique features, um, to them that they really wanted to dial in and focus on. Um, for example, it would power a job site for an entire day, an eight hour shift. Um, so different elements like that they really wanted to promote for the generator itself. So we knew that we needed to hit this target market that we identified with just these key features. And so we singled in on email messaging that targeted one single feature in each email message. And then we hit that market space very hard with these messages. I think a weekly cadence that really Highlighted just the individual feature of the generator. We tied that with a video that we produced that was just an overview of the generator, obviously highlighted those features. And I believe we also did, um, a printed piece that supported it as well. And so Tim, you're the numbers guy. You know the exact numbers and results. But it was phenomenal success.
Speaker A: Each of those emails, uh, had a link back to the video that we did.
Speaker C: Mhm.
Speaker A: And so the video had eight key features and benefits. Here's why you should buy this generator and then the distributor value add. So here's why you should buy the generator and here's why you should buy it from us. Right. So that's important. And then there are eight key features and benefits. We exploded that and focused in on one of those pairings once a week for eight weeks and sent email. And when those emails were sent to their, to their house list, we also publish that same content on all the social media channels. So between email and social media, uh, we had, uh, more than a 300. I'm gonna look the numbers up. I'm gonna. Because I just saw them recently. Bear with me,
Speaker B: you know, while you're looking that up, I think like, once again, this is an important lesson is people are not gonna, you can send them the content once, but you need to send it three or four times. Right. I know. I mean, how many times I, I'm like, I have to watch a TV show three times to, to sometimes to get what I want.
Speaker A: Absolutely.
Speaker B: And I want to see that. Right. And so, yeah, I think that's important. And people always ask me, it's like, what the best, what's the best way to get people to see my videos? Get more views on my videos? I'm like, send them the video.
Speaker A: Yeah, yeah. You're not, you're not communicating with a stationary target. You're. You're talking to a parade that's moving down the street. Yeah, they're too busy to look at all your emails, but I got the numbers here. So, um, we increased orders by 300% and sales increased 168.7%. So there's a difference between 300 and 168.7. And the reason for that is they ran out of generators. This is what we call, Ian, a champagne problem.
Speaker B: Yes. Oh yeah, Sold out. That's a, that's a good problem to have.
Speaker A: Uh, we did another campaign very similar to it for a packaging distributor in Massachusetts, and they focused on two markets on food processing and on pharmaceuticals, and they focused on selling 3M. Um, tamper proof packaging tape. So if you have a, a carton of food or pharmaceuticals, you can see obviously why you'd want to see tamper proof tape on that carton. Right. Um, so they sold the equipment that applied the tape and then they sold the consumable in the form of the tape. And we did two vertical market campaigns, one on food processing, one on pharmaceuticals. Again, weekly emails targeted to both of those markets, weekly social media posts, and we increased 3M sales by 56%.
Speaker B: Wow.
Speaker C: Um, you know, sorry, I didn't mean to interrupt, but something with social media too, that I think it's important to note is that you don't necessarily, while you want to pay attention, I guess to the trends and understand what the trends are, is knowing your market space and knowing your sales team and all that is probably an even more important element. Um, because when you look at the trends or you ask my boys, Insta, you know, would be the channel that, that everybody's paying attention to. And that's true, but in the industrial market space that's certainly not the case. And so we really focus on tailoring campaign Messaging, um, to LinkedIn is still the number one in, in our industry. Um, and some of them do have a pretty good Facebook presence as well. But um, by and large, you know, it's very really LinkedIn. So really understanding that how it translates to social media is important.
Speaker A: One of the things that we see is it depends how the distributor goes to market, what social media channels make the most sense for them. So not to get too much into the weeds on distribution, but there are distributors that are, that are really, you know, they're accepting orders and they're shipping them out. And it's all through the warehouse and through customer service and the sales team. And there is no retail showroom, but certain distributor types invest in retail showrooms, lighting distributors, uh, oftentimes plumbing distributors and electrical distributors, where contractors come in and buy the parts they need for that day's job and then they go out to the field if they have a retail presence. Uh, social media through Facebook or Instagram, aimed at contractors does resonate, but generally the default is LinkedIn. Uh, but, but there are some distributors that, where it makes sense to look at different channels.
Speaker B: Yeah, um, and Shively was one of these too, right, that you were using this whole strategy with.
Speaker A: So, so Shively, um, we, you know, we talked about the, the sample box that got tremendous results. Uh, we also manage their social media presence. We have a baseline social media product called Distributor Social. So you know, whenever we, we start working with a new distributor, we'll look at their LinkedIn page or whatever and, and there's a more than a 50, 50 chance that their last post was somewhere around 2016. You know, and most distributors say I know I need to do something there, but I'm not sure what I need to put there and I don't have the time to do it. So it is scattershot at best or non existent at worst. And so either way we, we come in and we have a syndicated social media plan that we give regional exclusivity on so that, so that two competitors aren't getting the same content. But our premise is that with social media you have to earn the right to promote. So here's what I mean by that. If you look at yourself as a consumer of digital media, if somebody's always trying to sell you something, unsubscribe, unfollow, you know, I'm a, I'm a ruthless deleter. Um, but if you inform me or you educate me or entertain me, um, I'm going to pay more attention, give me something I can use. So we understand the end user market for industrial distributors and electrical distributors very well. And so we create content that positions our client as experts and we share articles and we do infographics and then we do holiday posts and we do you know, New Year's and the fourth of July and stuff like that. But we also do National Bacon Day and National Dog Day and silly stuff like that. We create regular posts and regular brand impressions. So it's just there is a baseline layer. It's not really meant to have um, an roi. It's giving us, it's the table stakes, right? Just having a baseline presence and then we've got eyeballs. And one of the things we see is when we implement this, we see about a 300% increase in engagement. Uh, wow, first month starting from very low point. So yeah, 300 of nothing is nothing. But we still see substantial spike. And then we layer in promotional type stuff in which Shively Brothers, we've taken this over for the last several years and they do nothing else with it. And we heard two really cool things this morning. Number one is, um, you know, they're growing and they're hiring and they do a lot ofHiring on LinkedIn. And the feedback they get from their candidates is that they have a rich LinkedIn presence and they seem active and busy and knowledgeable. So the candidates, uh, they've said this has made a difference in their recruiting even to the point where as candidates, you know, if you're going to apply for a job and you're working on LinkedIn, you're going to check out the company on LinkedIn first. Hey, these guys look like they know what they're doing. I'm going to, I'm going to apply for this job. So they've seen, you know, higher response rates to jobs and higher conversion rates to people who wind up accepting the job in a competitive market. So that wasn't even our intention with this, but that was the benefit they got from it. But the really cool thing, and it's jaw dropping is because of this, they got a $190 million opportunity.
Speaker B: Wow.
Speaker A: Uh, a customer that they hadn't worked with before reached out to them and they had 190 million dollar budget.
Speaker B: Wow, that's, that's amazing. And I think, you know, we, we talked about it and I talk about this all the time on the show and I talk about this all the time in my posts is if you're targeting big people, big clients, social media does matter. It's just, you don't want to be going after just pure engagement.
Speaker A: Right.
Speaker B: Uh, if you are doing social media just to get engagement, you know, like Kristen said, going where, you know, after every trend and trend jacking, you probably weren't. They're not getting in front of those people. Those people don't like, they don't comment, they just lurk.
Speaker A: It's like sports talk radio. We call it engagement farming. It's just getting views and eyeballs for the sake of it saying something stupid. This is about, you know, being there on a consistent basis with decision makers. And I think you said earlier, you know, the, the lurkers are lunkers. Yeah. I mean, you know, so this is, this is about establishing credibility. And so people are looking at this that you may never know looked at it until they reach out to call you.
Speaker B: Yeah.
Speaker A: So we just saw that, you know, with this 190 million dollar opportunity, uh, they'd been looking at their social media for some time. It's like, hey, these guys know what they're talking about. Let's give them a shot.
Speaker B: I, I really can't stress this enough because I can't tell you how many times I've seen this happen. And it happens and takes a little bit of time and, and it's not going to be this direct correlation usually. Right. They're not going to comment and be like, hey, call me, I have $190 million. They're just going to go to your website and call you and they're going to do the rest of the looking around and looking at the rest of your social media and seeing what else you have and all these other marketing things play into that final phone call. And uh, that's amazing. And you know, and you like, uh, honestly I wouldn't have thought it would work that well in this, this situation, but obviously it did, Right?
Speaker A: Yeah. You know, we're not going to make that promise for all of our subscribers on distributor social. But the point is it does, it can have this kind of impact.
Speaker B: Yeah.
Speaker A: Even when it's not designed to.
Speaker B: Even if you get a hundredth of that and it's just a million dollar call, it's worth it.
Speaker A: It's okay. Yeah. Okay. I'll make time.
Speaker B: I'll make time for that million dollar call.
Speaker A: Yeah. Um, that money stick.
Speaker B: So we've talked about all the things to empower a sales team and getting them leads and closing these deals and $190 million deals. But the co op piece is what interests me a lot. You know, as far as how do you know, what does it take to find that money, get that money and make sure you get the money.
Speaker A: Yeah, well, apparently a lot. So again, you know, Chris, you know these numbers better than I do, but less than 10%. When we were at ITW, less than 10% of our independent distributors claim co op funds even though we, we made it known that they were available. So it's, it's a bureaucratic challenge in, in our, you know, independent distributors oftentimes aren't organized around it and they don't have the time to pursue it. And when they do make the time to pursue it, they get diverted. And then even if they, they muscle through and get all, do all that and they find it, then it's like, what do I do with it?
Speaker C: Right.
Speaker A: And there's, you know, there's, there's a skill gap there. Most of these distributors don't understand how to put together, you know, cross channel integrated marketing campaign.
Speaker C: Well and it's, it's getting more difficult too to get manufacturers to sign off on co op plans that are not defined or they're setting up parameters that um, tell you what kind of ROI needs to happen as a result of campaign. And you know, if our distributor is experienced in ordering promotional items and you know, not building these more sophisticated marketing campaigns, they're kind of at a loss and so sometimes they're getting denied where when you really go in with a structured campaign, you do get that money and and sometimes you can even get beyond what, what is truly justified by the co op$.
Speaker A: We had one recent Canadian distributor, electrical distributor in, in Edmonton that um, you know, has worked with us for a couple of years and we, they had a supplier. I won't name names so they don't get inundated with calls. Um, but they liked what they saw and they saw results with it. So last year at the end of the year they said, you know what, we have an extra $30,000 in our budget that didn't get claimed. We'd like to give it to you because we know you're going to use it.
Speaker B: Well, wow, that's, that's nice.
Speaker A: Yeah. There are dollars above and beyond that are available and sometimes you have to earn them, sometimes they just fall in your lap. Sometimes if you ask for them, you get them.
Speaker B: Yeah. Uh, but it makes sense, right? It's like if you're not just going out and get golf balls but you're using the money, showing results, getting results, it changes your relationship with your, your supplier, doesn't it?
Speaker A: Absolutely.
Speaker C: Yeah.
Speaker B: Um, and that's a key point though.
Speaker A: And Kristen, you amplify this. But when we were at itw, one of the primary reasons we chose to invest in co op is because we wanted to have, we wanted to engage with our distributors at the field level. And co op was, you know, bought us that opportunity. Um, and so we can work with them to create end user demand at the field level. So the win in it for us was to get a better relationship with the distributor, get greater share of mind, and then having marketing opportunities to create leads on top of that was, was almost a bonus.
Speaker C: Yeah.
Speaker B: Uh, yeah. And you know, as far as like getting the money and knowing where to go and what's out there, you know, how do you do that?
Speaker A: Chris, you want to take this one?
Speaker C: It's kind of a dangerous question, I guess, but, um, we have an account management team that, you know, thank goodness, is willing to really do all the research. We base it on just collecting the prior year sales data from our client. And then we do all the hard work, we do the digging, where we identify which suppliers do have programs, what the parameters are for those programs, how much that our client qualifies for, and we do all that work for them.
Speaker B: Gotcha.
Speaker A: Yeah. So we get a spreadsheet that has the previous years and again, co op is almost universally calculated on a calendar year basis. Sometimes it's on a fiscal year, if that's different than a calendar year. There are exceptions to all These things. But the vast, overwhelming majority of manufacturers make co op available on a calendar year basis. And so we get a spreadsheet with the supplier, the previous calendar year's purchase amount, and then the name, phone number and email of their sales contact for that organization. And then we give them an email to introduce us to their, their suppliers, letting them know that we're going to be reaching out to them. And then our account managers, uh, reach out to those suppliers and basically say what you got and collect that information. Collect, you know, amounts, formulas, deadlines, approved uses, capture all those pertinent details. And then when we're finished with the strategic review, we align and say, okay, well here are the resources that we've identified, here are the strategic drivers for the business and we try to put those together to the maximum impact for the distributor. So based upon the answers in the strategic review, that's going to inform the marketing recommendations that we make and that's going to inform, you know, the creative solutions that Chris and her team develop.
Speaker B: Gotcha. Uh, and what, you know, when, I mean, obviously this sounds like a full time job if someone decides they want to get the co op dollars themselves, but what are the pitfalls that if someone's getting co op dollars that they should be thinking about?
Speaker A: Well, I think it really gets down to, you know, how do you decide to use the dollars? And you know, you, if you're only, you know, we pick on trucker hats and golf balls and, and I just want to be clear to the, to the golf ball and trucker hat constituents that we love trucker hats and golf balls. We really, really do. Um, but increasingly manufacturers don't want to pay for those things. And so, you know, the, the co op program rules and approved uses are a dynamic thing and they change from year to year. And if you only do those things, increasingly manufacturers are going to come to you and say, sorry, we're done. We haven't seen any sales for this, uh, this, you know, if you want to do trucker hats and golf balls, knock yourself out, but you pay for them yourselves. It's not going to be on our dime. Show us that we can get a return through trucker hats and golf balls and we're glad to do it, but we don't think you can do that. So, you know, manufacturers are increasingly putting, um, the onus on the distributor to demonstrate the efficacy of the dollars that they use. We did a research study last year around this time, um, where we interviewed, um, a couple hundred distributors and a couple hundred manufacturers about attitudes towards co op policies, toward co op results with co op. And it was remarkable what we saw. And you know, universally distributors wanted dollars for wearables and promotional items and um, for sales promotions. And universally, manufacturers wanted to fund, you know, digital campaigns and SEO and clickable catalogs and things along those lines. The one area of overlap that made sense was sales promotions because they're measurable. So we talked about Richard's supply and that sales promotion, that double Jet Air tool orders earlier. I think, um, and if we didn't, we should. And the idea was, um, it's infinitely measurable. Manufacturers want measurability. And so part of what we look for is the ability of our client to measure. And if it's old school and we can still measure, great. If it's digital and we can still measure, all the better. Um, but the idea is, let's demonstrate these funds drove growth. So if you're not doing that and you're not in a position to track, those are the biggest pitfalls in managing co op on your own.
Speaker B: And I mean, uh, if someone promises them the money, do they get the money up front? Do they have to get the money on the back end? How does that work?
Speaker A: Yes, it's all over the board. So we deal with more than a thousand manufacturers and there are probably 900 different ways that these things get done. So that's part of the challenge with it because there is no uniform process. You know, everything has to be, you know, considered on a manufacturer by manufacturer basis. So we've got to look for those common denominators and put together those pieces of the Rubik's Cube. Ah, generally speaking, um, the manufacturer will, um, look for, um, some proof of delivery, so a design or some final deliverable and a, ah, copy of an invoice. And we manage all that back end paperwork. We submit the claims to the manufacturers too. Uh, and then they reimburse our clients with a credit memo. That's the most common way. But we've seen them write checks, we've seen them give them free product. Um, you know, it becomes a challenge. And one of the key things that we always coach our clients to do is to have a tracking mechanism to make sure that they've been reimbursed for these things.
Speaker B: Gotcha. Do you help with that too?
Speaker A: We do. It's a tedious process. But we will go back if, um, a manufacturer has not yet reimbursed our client. You know, we track their approvals and we document all that sort of stuff. And then if the client Lets us know that they still haven't been reimbursed. We'll do the follow up to make sure that they get reimbursed so they don't, they don't even have to chase after the accounts receivable on it.
Speaker B: Wow. So I mean it makes you know, Craig obviously paying to increase sales, having someone else to help you and increase your brand increase, you know, make your salespeople happier. It's seems like it's no brainer. Uh, but you know, obviously people can try and do it themselves. Uh, it seems like it's a lot of work and most of people are wearing multiple hats. But if someone wants to get started with you all. Tell me about the process of uh, getting started with you all.
Speaker A: Yeah, I mean it's a really simple call. We have an introductory call and just you know, we'll explain what we do and learn a little bit more about them. And if they really want to get going, then we have a really easy entry process. We call it the co op roadmap. And uh, for a few hundred dollars, we'll sit down and do streamlined strategic review session with them. We'll get their purchase data and we'll do a pretty detailed analysis of how many dollars they have and come up with a rudimentary plan for how to use those dollars and they can take a look at that. And if they don't get five to seven times, um, what they spent on, on that initial uh, analysis, uh, will refund the money, but they're probably going to get 30 or 40 times. I mean it's, it's, you know, the, the, I mean it's, it's. Why wouldn't you do it? That's the question, right? If you can stick your toe in the water, figure out what, what you're going to get without committing to a full engagement.
Speaker B: Yeah, I mean, because it's, you know, we have to get updated, right? Like being old school, it is gonna go out the window and there's, you know, it's, it's a whole new world out there. And I think a lot of distributors and a lot of businesses, older business especially Instruct Industrial ish. Have lagged and gone. I can do it. I can, you know, I don't need to do this. But it's becoming more and more necessary and to do it paid for by another company, it's uh, awesome. And then deal with the experts. I mean, you guys know it. So that's fantastic. So we'll put a link to that in the show notes. We'll put a link to the call to the signup and to uh, your linkedins as well. Um, thank you all so much. And we'll put obviously a link to Rivet MRO on there. But, uh, is there any other, uh, last minute piece of advice you can give to these distributors looking to increase sales?
Speaker A: Yeah, I mean it's worth it. So here's how I position it. When I'm talking to an owner of a distributorship. It's a simple math equation. So if you look at your business, you're probably operating on a 26% gross margin and you net out somewhere between 2 and a half and 3%. So let's plug it at 3% and that's probably generous. So that means if you. So you have to sell a million dollars worth of product, turn $30,000 to spend on marketing your business.
Speaker B: Wow.
Speaker A: And this is why they don't spend their dollars on marketing is because it's such a, it's a volume business. So if you're an average distributor and for an average client of ours, we're going to find between 30 and 60 thousand dollars in co op. So let's go to the low end.
Speaker C: Wow.
Speaker A: If I told you I could give you a slam dunk $1 million sale, how much time and effort would you put into pursuing that sale? And the answer is yeah, yeah, we'd go for it. And then that vectors up if they're a bigger distributor. So then I always say, well, that's the amount of time and effort I want you to put into this. You don't need to put that much time into it. But, uh, we need something and the biggest challenge we have isn't competition. It's not doing anything. And they get busy and they get pulled in a million different directions because they operate on a 3% margin and they don't have a lot of resources. So make the time for us. That's the kind of impact we can have is that slam dunk, million dollar sale.
Speaker B: Wow. Makes complete sense. And I mean, and it's, it's a little bit of effort. Right. It is effortless. You got to step away. But if you're gonna, if you're gonna change anything, you've gotta make some effort. But it's, you know, the rit, that's the risk.
Speaker A: You gotta do something.
Speaker B: Yeah.
Speaker A: We like to say we do 90% of the work. We don't really know what that number is, but it's probably close.
Speaker B: Yeah. But also getting the money, I mean, I wish I had someone give like I said at the top, if someone gave me money to market, I would do it all day long. This is awesome. Well, Kristen and Tim, thank you so much for being on the Garlic Marketing show and telling us. You know all about how to sell more with free money.
Speaker A: Thanks for having us. It was fun.
Speaker B: Thank you. Thank you all for taking Tim and Kristen on your journey and making us part of your story. This benign Garlic and the Garlic Marketing show video, you know it'll make you an authority. You know it will get you more leads, better leads that close faster and spend more with you. And video stories will help you be remembered and connect with those perfect clients. The problem is, where do you start? Storycruise.com is the place to go. It's like a film crew with an S. What's your strategy? Do you do it yourself? Do you hire a videographer? An agency? Do you need an editor? How do you know if they really know your business and how to make videos for business that work? The answer to all this and more can be found@storycruise.com it is the place to find the latest video marketing strategies, the best gear for your business, as well as videographers, editors and agencies near you that are trained in video storytelling for business. Go to storycruise.comgarlic to get special insider info for listeners of the Garlic Marketing show, including special access to several of my courses, including including my Case Story course. Go to storycruise.comgarlic to get a whole bunch of special offers just for listeners of the Garlic Marketing Show. Whether you're looking for a videographer or to do it yourself, go to storycruise.comgarlic to get started today.
Speaker A: That's it for the Garlic Marketing Show. If you want to get the inside scoop and the latest techniques, make sure to follow I and Garlic on Facebook.
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