Wow – I’ve touched a nerve!!!

by Graham Dodd on 16/01/2012

My recent blog about ridiculously low “solus” rates appears to have rattled some people!

LinkedIn messages and a couple of emails from seemingly irate contacts (might be best not to call them clients at this stage!) strongly suggest that some people don’t agree with me.

The insinuation that they are wasting precious marketing budget has resonated with them – in a negative manner – but I stand by my previous comments; they are buying on price and potentially sacrificing quality.

Discovering whether this is the case can be simply revealed by conducting a carefully constructed test matrix to test door drop options. If you are, or are planning to be, a user of door drops this is a test you should conduct to see if you are getting value for money and maximising your response. I repeat my offer to participate in any such test against other door drop suppliers and/or services, because as the image on the right illustrates, cutting corners on door drops can be dangerous.

I remain staggered that some of the people who have taken offence at my blog, when questioned, cannot actually demonstrate any historical testing of what I still maintain is their perception that buying cheap “solus” distribution delivers “real” results.

Yes it probably does deliver “results”, but how do you know those results cannot be bettered?

Because we’ve been undertaking door drops for many years for all manner of door drop users, we’ve plenty of empirical evidence that spending a little more at the front end will almost certainly improve your ROI at the back end.

Cheap Door Drops

But the problem of cheap door drop solutions shows no signs of going away soon.

I have only been at work 10-days this year and I have already lost three new business pitches on price.

Two were relatively small, one off pieces of activity so no big deal. But the other was from a newly appointed marketer at a retailer with potentially long term, significant use of the medium if he could get door drops to work. He came to me practically begging me to help him through the door drop maze as he had never worked with door drops before and I came “highly recommended”.

This against a background that they were beginning to experience problems with their current leaflet distribution (solus) provider.

Despite receiving the request on 21st December, I submitted a pretty full proposal within 24-hours. The next day we had a long telephone conversation. Efficiency and reliability must have been mentioned umpteen times.

‘I understand’, he said.

On January 3rd (lengthy internal discussion obviously took place!), I received an email informing me “they were moving forward with someone else who appears a better fit” – Happy New Year!

‘What constitutes a better fit?’ was an obvious response!

The reply: ‘It was down to cost and they were able to give me the assurances I required to justify their pricing / quality of service re solus distribution at a very competitive price.’

‘Good luck’, I replied, ‘you know where I am if you need me!’

Sadly, I think this may well a common story this year.

Yes, I appreciate its tough out there.

Yes, I appreciate everyone’s looking for a good deal.

But cutting corners on marketing investment is a recipe for disaster.

If I’ve upset you I apologise – but I stand by my opinions!

This article was written by...

– who has written 34 posts on Letterbox Consultancy for Door Drop Marketing.

Graham Dodd is the founder of The Letterbox Consultancy – he has over 40 years of experience in the door drop industry and remains at the forefront of innovation in the business.

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{ 3 comments… read them below or add one }

Billy Shepherd January 17, 2012 at 1:13 pm

Graham,

You are spot on! I run a similar operation in Dundee, and was beginning to despair at exactly the same problems you are experiencing. Price is clearly becoming a more and more significant factor, to the point nothing else seems to matter. The logic of getting deliveries carried out properly is plain to see, yet the burden on budgets simply seems to be forcing folk towards the cheaper option. As someone who obviously knows this business, you will be only too aware of what is costs to have a delivery done properly. When you are asking various types of people to work unsupervised for long periods of time, however, the temptation to keep your prices down can be satisifed by bringing in ad-hoc staff and paying them less than minimum wage. Of course, that’s nothing more than a ticking bomb! To be honest, knowing the work that goes in to doing a delivery properly, I genuinely wonder why some companies bother, given the potential for things to go wrong and the harm that does to your reputation, and the margins that are being squeezed ever tighter. Keep competing on quality Graham. It’s only inevitable that those competing on price will be hounded and hounded to maintain or lower their prices with no way out, and will suffer the consequences. Then maybe we can pick up the pieces!

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Alex Jones June 13, 2013 at 4:21 pm

These are interesting view points.

As you probably know price followed by quality and turn-a-round are the three factors that customers consider when doing business. There are only a few distribution businesses in Colchester area, I know what they charge and what they pay their sub-contractors. I worked for one where they paid me £30 per 1000 for delivering three leaflets, but they charged at least £25 per 1000 to customers. Their solus rate was probably £50+

Because I came into the market at £30 per 1000 for three leaflets, now I work for myself I consider £40 for one leaflet a good deal for me as a distributor, but the customers like it too, no competitor can touch me. It depends upon your expectations, and price will matter if you win or lose custom. I have hammered my competitors on quality, price and turn-a-round.

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graham June 14, 2013 at 1:18 pm

Alex, appreciate your post, but I stand by my previous comments about rates of pay/distribution charges. Reputable Companies should presumably be paying staff Minimum Wage, in addition to which they will have management and administrative overheads, on top of which they are presumably looking to make a profit, so the maths take care of themselves.

At the same time, if you are a small local operator working on your own and earning what you consider to be an acceptable wage and providing your local clients with a quality service, then good luck to you.

But I don’t think its a business model which could be rolled out across the UK for larger advertisers, which is the area we operate in.

Sadly our industry is one which is riddled with horror stories, the very vast majority of which in my opinion can be tracked back to companies providing services on the cheap, who then cut corners and leave the client in the lurch.

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