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Berkonomics

Contribute to A-M-D, or support someone who does.

  • A.  Accumulate or acquire (product line, breadth of services)
  • M. Marketing or merchandising (expert and diligent use of resources)
  • D. Distribution  (adding channels and reinforcing relationships)

Let me credit CEO Erik Hovanec (www.leisurelink.com) for this one, whether he originated it or recast it from his past.  As his chairman, I have watched him masterfully focus his employees all toward a common theme aligned with the company’s goals.  The genius of this insight is that no employee is exempt, even those in accounting or human resources.  Everyone supports the contribution to AMD in some way, or, according to Erik’s challenge, should not be here breathing the air, taking valuable space and consuming scarce resources.

People in R&D, business development, purchasing or production all fit in to the “A” of the equation.  Without constantly improving or increasing products to offer, a company today is quickly overtaken by its competition.  Stagnant companies usually can trace their inability to gain market share upon the “A” area first, and management should pay particular attention to putting resources into this important focus of the company.

[Email readers continue here…] Without the “M”, effective marketing and or merchandising, sales people and distribution channels quickly dry of leads and must fight for attention beside better branded competitors.  Marketing is the area least understood, often least funded, and perhaps one of the most important within any company.  Even with the best products or service, companies fail for the want of good marketing.

For many industries including those with Internet-based sales entities, you cannot have enough channels of distribution, the “D” in this insight.  Some management will argue that channel conflict is one of the worst ways to lose the loyalty of distributor and direct sales resources.  I’d counter that a cohesive distribution strategy calls for a coordination between inside and outside distribution resources by management, not a competition for customers using inside resources to compete with outside distribution.  There are many ways to allocate or split a product or service in the marketplace: by size of customer, geographic location, market segment, or even agreed-upon rules to protect open competition between the distribution groups.

Sometimes, a company must create a unique brand to self-distribute in competition with other distribution resources.  Many manufacturers have successfully created “OEM” labels for branded retailers wanting to distribute under the retailer brand, without disturbing other distribution channels.  And many wholesalers have successfully created a new self-managed retail brand for direct distribution in competition with current retail distribution channels.

Focusing your entire staff on a simple, understandable set of functions in support of the goal is a masterful way to increase productivity, create urgency and measure contribution of individuals to the common good.  Remember: A-M-D.

  • Re. the “D” in your insight, on using to the maximum various levels of products and channels of distribution:

    It reminds me of Oxy Econ professor Cecil Dunn, who described the importance of “filling the entire area under the demand curve”, as clearly demonstrated in the true department stores that used to exist. You could buy a suit in three different departments — highest quality and price on the top floor, middle quality and price on a middle floor, and lowest quality and price in the basement.

    As Michael O’Daniel commented, it provides a profitable way to create “multiple levels of customer delight”

  • Congratulations to both Erik and Dave! Enrolling the entire company in accomplishing the mission is simply good management strategy, overlooked by far too many managers who do not feel the need to interact with staff below a certain level of the hierarchy. Another way to put enrolling the entire company would be “living the brand.” To the A-M-D acronym, I would add a an “F” or a second “D,” for Fulfillment or Delivery, as you prefer — the most overlooked aspect of marketing and customer service. Simply stated, it’s delivering on what your brand promises with the goal of creating customer delight. AMDD — Adult Marketing Deficit Disorder? Sorry.

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