Distributor Relationships as your Competitive Advantage
‘Marry in haste, repent at leisure’ _ this is often the most common problem in B2B distributor relationships. Principal and distributor get swept along by the early market opportunity and get disillusioned when this opportunity fails to materialise or grow beyond the initial bubble.
With 70% of most distributed relationships ending in failure, an approach is required that mitigates against this risk.
Within the next four articles, we aim to dispel the complexity and provide an easy to follow framework. In Article 1 we unpack the initial framework. In article two we explore and dig a little deeper into the first element of the framework ‘pre-relationship’, and gain insights into how it could be applied. Article three looks at ‘partnership planning’ and four focuses on living the partnership.
These articles could act as your guide as you manoeuvre through the intricacies of working through others.
The framework is based upon years of practical and pragmatic experience gained globally, regionally and cross-sector. It also draws on insights from trusted senior commercial leaders and B2B relational research. It is applicable cross-sector, including FMCG, WBS, Pharma, Medical Devices, Industrials and services.
To help manage the complexity of new, existing or relational change, we have developed a logical and simple three stage process.
1. The initial section of the framework, ‘pre-distributor’ challenges your thinking through big questions and analytical tools.It aims to ensure expectations are clear: what you need, the opportunity assessed, and identified ~ is it worth it?
Capability established; ours and potential partners
B2B distributor assessment tool is used to identify the fit between your expectations and distributor potential to deliver. This provides a useful evaluation tool if selecting partners to work with and a development road map for the distributor once selected.
This element of the process is often overlooked, or railroaded by short cuts, pressure placed from above to deliver, or short- term numbers through rapid implementation of the partnership.
‘A distributor needs to be better than your competitors’ local operating company if you desire growth and competitive advantage.’
2. The second section of the framework ensures the relationship starts on the right foot. Planning the partnership ~’Managing for value’
Often seen as the moment when both sides sign contracts with a flourish. In actuality this couldn’t be further from the truth.
At this stage all the hard work from phase one comes to the fore. We explore ways to establish task to value, setting margin and earning expectations. Establish who does what and ensure both sides share similar aspirations for the portfolio and its market potential.
Useful frameworks, analytical tools and software solutions support the development of phase two
It is worth remembering that a contract is there as a fall back, safety net and not a relationship reference guide.
3. The third part of the framework is all about ‘living the partnership and making it happen’.
Here, the role of the country manager, distributor manager, whatever title you use within your organisation comes into their own. We provide a perspective of what we think a distributor manager does and the capabilities and competencies required.
Within this phase the focus is firmly on delivering through the relationship. We explore the development of joint business plans that reflect the market categorisation, aspirations and the distributor potential. We also consider stakeholder mapping and management, reward and motivation, share of mind, share of voice and relationship measurement and review to highlight just a few.
One key failing at this stage is relationship fatigue, unless a shared measurement framework points towards agreed progression.
If you simply start to approach market development through distributors with these three clear steps in mind it could help you to unravel some of the complexity as you start the journey.
The next article will dig deeper into the first part of the framework unpacking and unlocking what is involved and what you can do.
Interested in finding out more? Contact firstname.lastname@example.org