Some industries are marked by a very specific business model, in the sense that they consist of a head office, with business units of different types. This is the case for companies that operate on a franchise basis, have regional sales offices (for car rental, for example), regional offices, or dispersed service points.
In such cases, there is a significant geographical distance between the regional entities and the one that makes the strategic decisions. From a marketing point of view, this can cause some challenges, since the reality of each local unit is unique. For example, it may have :
- A specific inventory
- Products specific to its region
- Products/services particularly appreciated by its customers
- His most frequently asked questions
- The busiest moments
In a way, local units can be like a company’s customer service department. A very popular phrase tells us that customer knowledge is often found more in the people who are close to the customers, who interact with them. This does not mean that the head office has no customer knowledge, that it is not able to know what customers like and dislike. But the more points of service there are, the more difficult it is to maintain this local proximity on a daily basis. In fact, each level has important knowledge. The parent company leads the boat, steers it, and makes important decisions, while the units run the machine on a daily basis. Both are important!
All this to say that it would be interesting to leave a certain freedom, controlled of course, to the local units to act on their customer knowledge on a daily basis. This is an approach that is gaining ground in some companies. It has a name! This local versus global vision is called distributed marketing.
I really like more theoretical definitions, so here goes!
Distributed marketing refers to the practices by which a network company develops solutions to simplify and harmonize individual marketing actions carried out and decided upon at the local point of sale level.
In layman’s terms, it means that the company, as a whole, implements :
- Practical tools that local units can work with,
- Which are easy to use, and which serve to unify all of the brand’s efforts as a whole,
- Which can cover a set of marketing practices decided as needed.
Thus, distributed marketing aims to offer greater autonomy to local units, which can carry out more marketing actions that reflect their customers.
Autonomy, yes … but controlled!
Before going any further, I would like to reassure you. This is not a free for all given to local units. What distributed marketing aims at is rather a controlled autonomy, in addition to a harmonization between the efforts made by the parent company versus the local units.
Each level must evaluate its share of responsibility for communications. For example, the parent company could retain control over advertising campaigns, administrative mailings, welcome messages, transaction tracking, etc. Local units could be limited to promotional mailings to promote products. It would even be possible to modulate the discounts to be given, if necessary.
In fact, it must be decided from above what this autonomy will look like, and how the tools put in place will have to meet these needs. Here are some ideas that can help this work on two levels:
- Make available a global calendar of communications to see the local versus global unit’s communications. A mailing can then be avoided if more than one is planned for the same day.
- Set up a predefined approval system that alerts the right people when a validation needs to be done.
- Track sending performance at all levels, to evaluate decision making on what units are doing well and what needs to be improved. This can guide the parent company in making more strategic decisions as well.
- Create interfaces that help the creation and consulting process in the tools that are specific to the local units, to facilitate their daily work.
These tools have all been implemented in the Dialog Insight platform, for customers using our distributed marketing functionalities. The results are very impressive!
Brand image management
Speaking of controlled autonomy, this is mainly due to the protection of the brand equity, how it presents itself on the market. It is important that local efforts do not negatively affect the organization.
Thus, to ensure uniformity of the brand image, tools must also be put in place to facilitate the work of the local units. Often, managers in these units do not have the training or knowledge to think and create communications effectively. They won’t know how to set up an e-mail properly, the best time to send it, or why choose an SMS message, for example. Also, they won’t have hours to spend on visuals, creating texts, making corrections, etc.
Therefore, we must provide them with preconfigured, easy-to-use tools that will allow them to work faster, but well. These tools may vary in nature, but will often be:
- Message templates in the brand’s colors
- Specific content areas that just need to be completed
- Frozen areas that are not editable, but essential for communication
- A product catalog for easy insertion in the message
- A hub of images, or any other content that can be dig into
I find it important to mention, in relation to this work given to the local units, that there might be resistance to this change. Some will not see the need for it or will not want to participate. This is something that one of our clients has experienced. I think their method of reassuring franchises is worth sharing.
They decided to set up a specialized team to go and see, in person, all the managers of their franchise. The objective was to listen to their fears, better understand their specific needs, and answer questions about this new tool. These discussions made it possible to modulate the final rendering of the interfaces, in order to meet the requirements of the franchises. It was a work that took time, but was essential. Since then, the satisfaction of the franchises has been there, and everyone is using Dialog Insight to create local communications.
What are the advantages of distributed marketing?
Implementing a distributed marketing strategy in your organization, if applicable, has its own set of benefits. I will share two of them with you.
- Optimizing customer relationships
Since there is an increased proximity to consumers, this creates a link between them and the local unit. It’s easier for the local unit to meet the needs of its customers. It can modulate its offer, its promotions, and above all make decisions that will go in the same direction as the desires of its consumers.
It’s a very simple mathematical formula. The more relevant the marketing actions are, the better the overall commitment of the clientele will be. Of course, it all depends on how the local unit uses the information at its disposal. That’s why the parent company has an important job to do to equip them in the marketing practices they do. A great team effort!
On the other hand, we also avoid irrelevance, i.e. mailings that do not follow the reality of local businesses. For example, a promotion on a specific product when the local unit has very little or no product at all. It is a bad customer experience if the customer shows up at the point of sale and the desired product is not on the shelves.
It is also an advantage for the merchant, who may decide to put products on the shelves because the inventory is too high, or because a supplier has just informed him that a new product is now available, for example.
One of the greatest advantages of distributed marketing is the increased security, mainly in the transfer and access to information. This comes from the fact that access to data must be limited according to business levels.
In the beginning, it is necessary to establish what is called the permissions of all users. A permission establishes whether or not an individual can access a specific piece of information. Permission groups can be created, which encompass access to several types of information. Let’s look at what this means in concrete terms.
On the merchant side, permissions should only give them access to information that is useful for their daily actions. This would also mean access to a portion of the customer database. This portion could be based on a specific criterion, such as a postal address in the region, or a transaction in his business. Even in this list, the information available on a single contact can be limited, giving access only to the first name, last name, date of birth, gender, or any other information necessary for their communications.
On the parent company’s side, the information available is limited by department, by teams … yes, even for specific people! This vision, which divides access to databases within the organization, is also a form of distributed marketing.
From the point of view of transferring sensitive data with external suppliers, the same principle can be applied. Depending on permissions, the information that can be viewed, transmitted or downloaded is limited. This is all the more important since we live in a corporate world where each company does not have the same security standards and does not attach the same importance to it either.
Overall, distributed marketing integrates more advanced and granular approaches on how personal information access is managed.
The industries that will benefit the most
Some industries will really benefit from the possibilities of distributed marketing, and will see advantages that specifically meet the requirements of their field. This is not to say that other industries or companies cannot implement distributed marketing, but these are good examples.
Insurance and Banking
These two areas will mainly see the positive effects of permissions management. Distributed marketing, at its core, is about limiting access to data when it is not necessary or useful. Your company may already be using this type of method, and if so, you may be doing distributed marketing without knowing it!
This way, no one has permission to access sensitive information, share it with anyone or retrieve it for analysis or other purposes. This is an excellent internal management method that requires rigor in assigning access.
The insurance industry also manages sensitive data, and must ensure good management practices when it comes to protecting personal data.
For retail businesses, the main advantage is quite different. Rather, it’s about improving the customer experience for people in close proximity to stores. Several business practices can be improved through distributed marketing, including :
- Promotions personalized to geographic location
- Product proposal based of each merchant
- A better knowledge of the local team
- Promotions/suggestions according to the inventory
A more concrete example may be the signing of communications by the local business owner, or otherwise by a team member. This type of communication humanizes the sending that is done. It is moreover proven, by performances on opening and click rates, that a message signed by one person has more impact than one signed by a non specific address (e.g.: info@).
We have a client in the food industry who uses many of these tactics, made possible by the distributed marketing features we have implemented. The results on the mailings are effective, and all parties benefit!
Business model per franchise
More often than not, this model leads to a problem of brand image standardization. Some offices will take specific communication approaches, modify their branding, take a different speech angle from the parent company, etc.
However, it is essential not to dilute the identity of a brand, since this influences the choice of a future consumer when it comes to comparing different suppliers.
I’m thinking, for example, of real estate brokerage firms, which are under the same banner, but have a great deal of leeway in the communications they do. People could be influenced by the brand image of Remax versus Sutton Quebec versus Proprio Direct. Even if agents represent themselves, their banner can be a force to convince a future client. It is therefore important that the two levels are consistent with each other, especially in their discourse and communications.
Distributed marketing is then a unique opportunity to balance the needs of the franchises with those from above. With the brand management tools mentioned, units can communicate according to the fluctuations of their business and consumers. On the other hand, the parent company keeps an eye on the overall strategy, ensuring that everything makes sense in terms of brand objectives. It’s really the best of both worlds!
Finally, although they are not a specific industry, it should be mentioned that companies opening international offices have a similar challenge to the franchise model.
Indeed, the local unit entering a foreign market must be able to make the necessary adaptations to the new culture, while ensuring that the brand identity is not distorted. Although the discourse may change internationally, since consumers are different, as is the competition, the identity must still be recognizable everywhere.
For example, IBM or Apple have their own identity, no matter where the company is located.
Distributed marketing is a growing communications management practice that is gaining popularity. I hope that you will have a better understanding of its possibilities, but more importantly, that this article will have provided you with some guidance on how to implement it in your organization.
If you are interested in such a strategy, do not hesitate to contact us for more information. Otherwise, visit this page to find out more!