Investment Recovery is a profession with a foundation based on buying and selling used assets, with marketing and sales as key factors for the successful IR practitioner. Marketing and sales are frequently lumped together as one activity. While many of the principles are similar, these activities each hold their own separate place in the overall investment recovery process.
Marketing vs. Sales
Marketing is the process used to advertise and promote goods and services from one entity to another. By utilizing a wide array of promotional activities, sellers are able to accurately target their intended market. Investment recovery marketing has historically involved print advertising media, faxing and direct calling to a prospect list, and word of mouth. With the advent of the Internet, website listings and email marketing added to the marketing arsenal. More recently, the latest marketing trends are being found in the social media arena with the use of Facebook, Twitter, and LinkedIn. As it says in the introductory quote to the Sales and Marketing chapter of the Investment Recovery Handbook, “Marketing: The activities required to get a customer to give you money in exchange for a product or service.” —Robert W. Bly Sales—in and of itself—is the transactional piece of a good marketing plan, and ultimately the intended end result of your marketing activities. An effective investment recovery program will incorporate all facets of their operation into their marketing plan. Once a plan has been established, it is important to remember some of the following suggestions to build your program.
Get in front of people!
Site visits are important to develop personal relationships with internal customers and help establish realistic expectations for IR services and sales timetables. Tour the site. While “wandering around,” ask about equipment that appears to be idle. Explain the benefits of redeployment or potential sales. Remember your position. You are a service provider and guest to the operation. Take care to not offend but make positive suggestions relative to surplus assets. Establish a site contact. Discuss with the site supervisor the ability to have a single point of contact, providing you with eyes and ears on the ground. Build an inventory of potential. One of the benefits of regular site visits and having solid site contacts is the ability to plan ahead somewhat for upcoming projects. Your sales prospects will appreciate the fact that you have visibility into future inventory. Continually educate and report successes. I’m not talking about your education (that’s a given), but educating up the chain of command about the benefits and successes of your investment recovery department’s efforts. By obtaining and gaining customer support for your marketing plan, you are best able to serve the needs of your base. As an investment recovery professional, you should remember to think “big picture” when you are developing a plan. Your job is obtain the highest possible return for your customer’s product. This can be achieved by target marketing.
Target marketing is very simply the strategy of dividing your market into segments, then tailoring the marketing campaigns directed to each segment. Target markets for the IR professional:
1. Internal Customers— redeployment or reuse
2. Return to OEM or Distributors
3. Sell to End Users
4. Sell to Brokers or Dealers
5. Sell to Rebuilders / Refurbishers
6. Barter or Trade
8. Scrap—Reclaim & Recycle
The 4 P’s of Marketing
As you begin to build your support for your program, it is also important to understand and embrace the 4 P’s of Marketing: Product, Place, Price & Promotion.
Product: For the IR professional, product marketing is considerably different than traditional marketing, where products are all consistently new with well-defined product attributes. Particularly when dealing with surplus equipment, accurate descriptions of the items including complete specifications, maintenance history, hours of operation, and any warranties are critical. Accurately obtaining this information will not only assist you tremendously in communicating your product to prospective buyers—NOT having this information (including photos) will likely have a negative impact on the number of potential buyers and lower the ultimate price you receive.
Place: Understanding where your buyers reside and operate in relation to the location of what you’re selling is a key feature to obtaining maximum return. What market segment you are looking to attract may affect the channels into which you’re placing your surplus. In short, you are looking to need to identify the opportunities where the largest number of potential buyers will be located.
Price: As IR professionals, we often find ourselves in the precarious position of balancing offers on surplus assets with the expectations of the asset owner(s). The ability to properly assess the value of the assets you have for disposal is critical. With a good handle on a fair market value, you’ll be in a much better position to negotiate fair offers and educate the asset owners on the best situation for disposition. Proper handling of this process is of utmost importance to the IR professional.
Promotion: How will you go about marketing the material once you have obtained access to it? Obviously, the value of the item for sale and how much time you have to sell it will impact your decision. Trade shows, ad inserts, direct mailing, catalogs, online listings, email, and direct calls are all options available to IR professionals. Increasingly, social media is becoming a tool that IR pros are finding as an added arrow in their quiver of promotional activities. By carefully selecting your target market, you can best asses the need to promote your surplus in a variety of methods. Three Other P’s
The 3 P’s – People, Politics & Public Opinion
Finally, understanding the People, Politics, and Public Opinion of your particular situation is critical. Some companies may be very conservative, and in some cases, overtly cautious, about the release of material and equipment for fear of future litigation or backlash. Utilities and governmental agencies live by a different set of rules than other organizations, for example. Often as IR professionals, we run into regulatory or company policies that make the marketing and sale of surplus assets much more difficult than just the sale itself.
The nuances of investment recovery are many, and the flexible, creative person is much better positioned to achieve positive results. (Sometimes you have to kiss a lot of frogs to find the prince!) By understanding the basic concepts of marketing, and applying outstanding people skills and imagination to the mix, you can provide a solid return on investment for your customers and clients.
Chris Robinson, CMIR, Pacific Exchange 513.518.0356, chris.robinson@ pacificexchange.org This article highlights some of the points made during a presentation made during the March Investment Recovery Seminar in Memphis. Chris’ presentation can be found at InvRecovery.org/presentations.
But this is just the tip of the iceberg. IR sales and marketing topics take center stage at the 2018 Seminar & Trade Show March 18-21, Orlando, Caribe Royale Resort. Don’t miss it!