In our second blog on managing distributor markets, Mark Hollyoake looks at getting the foundations of Customer Management right.
The term distributor is widely used to describe ways products get to market via a secondary or intermediate organisation. At Customer Attuned we define it as: an organisation that acts an extension of your company within a defined boundary to undertake agreed elements of Customer Management strategy and objectives. In effect, the distributor is a partner, and as such shares the profits or losses of the business undertaking in which they have invested.
Distributors are managed in different ways within organisations:
Some are treated as stand-alone commercial teams, other are managed ‘alongside’ or in the same way as traditional ‘transactional’ customers. However, for brand owning organisations successful distributor based relationships ensure ‘value exchange’ is less about transactions and more about shared objectives, and the ability to offer effective Customer Management.
Managing a market/distributor relationship today requires a specific set of skills beyond those demonstrated within the normal capabilities and competencies of a transactional account manager. Distributors should be extensions of Customer Management; ideally, they should fill Customer Management competency gaps that either organisations do not possess or wish to develop within the selected markets/customers.
If you are considering using or changing distributors, three main points to consider are:
- The relationship – What is the difference between transactional customers and distributors, and how can they be managed effectively?
- Motivation and Rewards – what are tactical and strategic tools distributor managers can apply?
- Choice – how do you choose the right distributor for the organisation. Or, if you currently use a distributor, how can you ensure you are getting the most out of the relationship?
IF YOU ONLY DO ONE THING….
Make sure your relationship is built upon a firm foundation of trust.
- Know what you’re dealing with: B2B Customer Management Assessment
- Kick start 2016 with: Distributor & Development Management Masterclass
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