Don’t Let Inventory Shortages Cause Marketing Shortages - BrandMuscle

Don’t Let Inventory Shortages Cause Marketing Shortages

This article was originally published in Crain's Cleveland Business

Why manufacturers need to keep marketing until customers can resume buying

As a company, there are few things more frustrating than when customers can’t get products they want because you can’t get the inventory you need. To add insult to injury, those out of stock items are listed as backordered for months, and it’s all out of your control. Lately, this has become the norm.

Three large events helped cause worldwide inventory shortages during the last 18 months: COVID-19; the Suez Canal blockage in March of 2021; and a historic winter freeze and blackouts in Texas, which caused the world’s largest petrochemical plant to come to a standstill. In August, central China received eight months of rain in one day, potentially laying the groundwork for coming agricultural shortages. The world’s supply chain is a mess. But deficiencies in the supply chain are no reason to stop selling your brand.

Marketing During Supply Shortages Keeps Customers in the Funnel

Businesses say it all the time: “We can’t get supplies to sell, so why do we need to keep marketing?” It seems simple: no product, no marketing. But the relationship between marketing and selling is more complex than temporary interruptions in inventory. Even when marketing seems pointless, marketing during inventory shortages is essential to your long-term sales and growth.

You aren’t simply marketing yourself and your products to sell this week or month. You are laying the groundwork for the future when shortages end. Thinking about sales at this moment is only part of the picture. The long-term view involves marketing so that customers remain engaged with your business, and even if customers don’t have the items to purchase or the funds to spend yet, your partners have to keep marketing in order to keep customers in the path to purchase. Remember, conditions will change. When they do, your customers will be positioned to spend.

Now the challenge becomes keeping your channel partners marketing on behalf of your brand. To keep partners marketing during shortages, you give partners the tools, the education, and the incentives.

  1. Provide higher co-op reimbursement rates to subsidize marketing costs to channel partners
  2. If you want to keep channel partners marketing during these historic supply shortages, then first you need to increase your co-op reimbursement rate so the financial responsibility isn’t on them. With a higher reimbursement rate, it is literally free money for marketing, and who wouldn’t spend that? Rather than incentivizing a particular tactic, raising your reimbursement rate encourages over all co-op spending, and that’s a big step forward.

  3. Educate channel partners on your customer journey and the benefits of continued marketing to customers who may not be ready to purchase at this time
  4. Even the most successful channel partners are rarely marketers themselves. Less than half of partners do not understand marketing. Approximately 32% don’t believe their corporate marketing program has any meaningful impact on the success of their business, so they see marketing as a low priority. To get partners to participate in marketing your brand, educate them about the value of your channel marketing program. When you invest the time and resources to educate partners, you will increase program engagement, and when partners see greater ROI, research shows they will engage more.

  5. Reward channel partners who act as brand advocates
  6. Support and education go hand-in-hand. Increasing program engagement requires incentivizing partner behavior.

    Channel incentive programs are a behavioral modification tool that rewards partners for highlighting new products, liquidating old stock, and identifying new market opportunities. During inventory shortages, programs can encourage partners to focus on selling alternative products in place of out of stock items — different types of wood, for example, while in-demand types are backordered. When companies directly reward partners for selling and marketing, partners will sell and market more. Now is the time to reward partners for marketing. So offer them additional co-op funds, vacations, or gift cards, and watch them market despite shortages.

  7. Reach customers through social media when store visits are down
  8. Keeping a strong online presence is important during supply shortages. Consumers search for store hours and COVID policies online more than ever before, and often turn to social media for answers. Platforms like Facebook and Instagram allow customers to ask questions about when certain items will return to store shelves and local business partners can provide updates about product availability in real time.

    In addition to fostering community engagement through meaningful conversations, partners can get creative to shift customers’ attention from deficits into products that are in stock. For example, if customers can’t find the fire pit they want at the hardware store, post a simple, engaging video tutorial online in order to sell the bricks, shovel, metal grate, and firewood customers need to build one themselves. Putting a positive spin on shortages only involves focusing on what is available and finding a way to inspire customers.

Supply Chain Projections

Eventually, we will get back to a market equilibrium where supply meets demand, or even to a position where supply outweighs demand. While you may not have any control of inventory shortages, you do have control over your brand image. If your brand continues marketing, you will have perfectly positioned your channel partners for the onslaught of sales heading their way when inventory stabilizes.


About the Author

James Morse

Vice President of Product Management


James Morse is Vice President of Product Management at BrandMuscle, where he bridges the gap between business requirements and technical capabilities for clients and prospects.