Skepticism over the availability of valued materials combined with continued breakdowns in the marketing supply chain has sparked hoarding behavior in sales, a new study says.

While the rift between marketing and sales is certainly nothing new, it has taken on a new direction that has a direct and immediate impact on the bottom line, specifically in the act of hoarding, according to the Chief Marketing Officer (CMO) Council.

In a new study, titled Straight Line to the Front Line (free registration required), the CMO Council reports that lack of confidence in the marketing supply chain appears to be a major contributor to the hoarding of marketing materials by sales executives. Nearly one in two sales executives over-order critical marketing support materials by as much as 25 percent per order.

“Hoarding, by definition, is to accumulate for preservation or future use in a guarded place. The business equivalent to hoarding can best be seen within the sales or field marketing function as marketing materials and consumables can often be found, accumulated, stashed or piled high in garages, offices or even car trucks,” the report says. “It is highly unlikely that the compulsion to hoard is simply a trait of a sales or field marketing executive.

“Yet 72 percent of respondents admit to over-ordering or stockpiling marketing materials,” the CMO Council continues. “When asked how much of the marketing consumables typically ordered are actually over-orders, 59 percent of the hoarding respondents estimate their stash to be between 20-25 percent of each order.”

Sales groups resoundingly approve of the content delivered through marketing consumables, according to the online study of 117 sales leaders. In fact, 41 percent of respondents identified the quality of the consumables as being the exact information needed to reach and excite buyers. However, there is still an undercurrent of dissatisfaction.

Straight Line to the Front Line reveals that although sales groups value the content and tools developed to aid the sales process, the provisioning system fails at the point of delivery and fulfillment, as 67 percent of respondents admit to facing challenges in obtaining materials from their companies.

Sales executives admit that their material hoarding is in reaction to operational processes that either take too long or deliver damaged materials. While 48 percent of respondents believe it is hard to get materials on time — meaning that over-ordering is a “just in case” precaution — the majority of sales executives (64 percent) intentionally over-order materials as a way to keep the required materials on hand because the fulfillment process takes too long.

While marketing departments are spending large sums of money on the production of materials such as sales literature, merchandising items, signage, etc., they are neglecting the process that actually gets these materials into the hands of key stakeholders, the CMO Council notes.

Sales departments identified the following top issues in the material procurement process:

• Materials taking too long to be delivered;
• Content not being available in time for a product launch; and
• Materials that are damaged or in poor condition.

According to the CMO Council, some root causes of sales hoarding are linked to systemic problems within the marketing supply chain. For example, lack of visibility in the process, delayed response time between request and fulfillment of materials and lack of adequate forecasting to realistically meet organizational needs have all contributed to the budget and resource drain.

To be sure, hoarding has negatively affected the dynamic between sales and marketing, yet there is a more dramatic budgetary implication to this behavior.

“As sales drives up utilization numbers by over-ordering, an unrealistic and artificial inventory forecast is created, requiring additional inventory to be ordered and re-ordered, inflating costs,” Straight Line to the Front Line says. “For those organizations that do not accurately forecast marketing supply chain needs, overordering often leads to early depletion of stock, necessitating rush orders as new requests funnel into the supply chain.

“Budget is wasted as an excess of materials must be created, delivered and stored, and then rush ordered when inventory runs out, when in reality this budget would be better used creating demand that fills the sales funnel with opportunities,” according to the study.

Resources

Straight Line to the Front Line (free registration required)
CMO Council, Feb. 22, 2011

…Sales Groups Hoard Marketing Consumables to Circumvent Ineffective Marketing Supply Chain Operations
CMO Council, Feb. 22, 2011

Even Sales People Fear Supply Chain Breakdowns
Material Handling & Logistics, March 7, 2011