Distributor Management – Avoiding the Pitfalls. Part 3 of 4
In our third Blog Mark Hollyoake looks at some of the common problems which beset Distributor Management.
The most common challenges organisations face when starting to work in distributed markets are:
- Difficulties finding distributors who live up to their expectations
- Their distributor relationships do not last very long
- They fail to accrue the ‘right’ level of value from the relationship
- They struggle to get a fair share of mind/voice within the relationship
- They fail to reward and motivate their distributors based on delivery of their expectations
- They struggle to ensure their distributors deliver and meet objectives and expectations
- They end up spending more time on legal discussions than developing business opportunities
What can you do avoid this happening in your organisation?
Before you enter in a distributor relationship focus on your vision and values – what do you want from the market/relationship? Undertake an assessment to determine whether the market potential exists. Analyse your own capabilities and gaps – what skills, knowledge, which competencies are you seeking from your distributor partner? Can potential partners match these? Analyse their portfolio and ask ‘what’s in it for them?’
Once you’ve selected the right partner define your strategy, objectives and expectations of the potential markets and customers, based on knowledge and insight. This is where organisations identify the type of relationship they need to deliver their strategy. In doing so, they need to develop a process and structures to ensure the selection of the ‘best fit’ for the distributor/partner – an analysis criteria for prospective distributor portfolios.
Finally:
Organisations who have successfully negotiated the above instigate health check assessments of the relationship. This provides a key tool for monitoring objectives and reviewing strategy. Used over time, it builds up a picture of whether organisations are on target, and if not, enables them to implement recovery processes before drift sets in. Finally, it equips commercial teams with the ability to deliver ‘bad news’ – what do we do when it’s all over!
IF YOU ONLY DO ONE THING….
Work jointly, co-operatively and inter-dependently to get things done.
- Know what you’re dealing with: B2B Customer Management Assessment
- Kick start 2016 with: Distributor & Development Management Masterclass
Have a view on this? Tweet to @customerattune or Tweet to @MarkHollyoake
Contact us at hello@customerattuned.com
He is an expert in B2B Customer Experience and Customer Management. This includes CM strategy development; execution of improvement plans (incl. organisational modelling for customer management); programme design; and partnership & alliance development.
Mark's applied work across FMCG, industrials, medical devices, financial services, business services and construction has led to organisations making, significant improvements to their customer management. A large focus of this work has been moving organisations up the Trust Ladder to enable them to benefit from reduced cost to serve, while continuing to innovate and deliver mutual value.
Mark is a Fellow of the Chartered Institute of Marketing and Member of the Institute of Sales and Marketing Management. He holds an MBA in strategy from Henley Business School.
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