If you rely on distributors to get your products to market, then your core challenge is managing your relationship to maximize your mutual benefit. The distributor is not your employee, but you must ensure that the integrity of your value proposition is sustained as if the distributor worked directly for you. The distributor is not your end customer, but you must help achieve the distributor’s and end user’s goals.
Your distributor relationship is ideal for customer-partnering.
The most rewarding thing any company can do is help another company succeed.
This is the essence of customer-partnering.
When working with distributors, first become knowledgeable about their business, just like you would with an end user. Provide product innovations, proven insights and best practices that can improve their performance, and tools to help them reach their goals. Research confirms the direct linkage between high company performance and high employee engagement. To reap these benefits, suppliers must influence not just their employees but those of the distributor as well.
Achieving this level of partnership with your distributors requires careful management of 3 steps:
1. Engage distributors: Develop shared, mutually beneficial goals that are customer-centric and produce strategic value for both distributors and end users – goals that are explicit, measurable and realistic for the market conditions. Regularly discuss progress towards these shared goals. Collect, manage, and share information that can be used to identify and capitalize on opportunities well before competitors. Distributors that are highly engaged with their suppliers are happy with the resources the supplier provides to help manage their business more effectively and increase their success in their markets. When a problem occurs in the relationship, measuring and understanding the drivers of this engagement can isolate specific actions the supplier can take to resolve them.
2. Engage end customers: End user feedback provides valuable information about their engagement with the supplier’s products or services, and the quantifiable value produced by them. This feedback also provides key insights into problem incidence and resolution, market share, unmet needs and intent to repurchase. Distributors that consistently underperform are most likely not executing on the supplier’s value proposition, quality or service, while partners with outstanding performance are more likely to grow. Evaluating and forecasting distributor performance can be challenging, but asking for end customer feedback increases the accuracy of your assessment.
3. Choose the right sales representatives: Distributors are the face of your company and distributor salespeople serve as your brand ambassadors. They can reinforce or obscure your value proposition and brand promise with your end customers, so be very concerned about the competency of your distributor’s salespeople. Offering distributors tools that make it easier for them to hire better salespeople and sales managers is an excellent means to ensure that your partnership sustains the integrity of your brand promise. This can serve as a profound differentiator in a crowded market.
Measure what matters, and engage employees, distributors, and end customers. Retain distributors who share your vision of partnership and proactively replace those that don’t. This is the essence of customer-partnering.
How deeply are you engaged with your distributors?
How frequently are you and your distributor engaging with your mutual customers?
