How to get the commitment of your independent distributors, and turn the arrangement into a win-win deal.
We all know that there is no such thing as a free lunch and yet many firms see distributors as such. They seem to think that they can take advantage of the resources of another firm to market and sell their products at no cost to them.
Such an attitude is not dissimilar to the head in the sand approach to building the world’s best mousetrap where customers will “beat a path to your door”. What is missing is the fundamental maxim – we win when you win.
When you engage a distributor to handle your products, you are seeking to extend your reach into the market by utilising their resources, channels and networks. You seek to ride on their back, taking advantage of what they have already achieved to leverage yourself into the market.
It is they and not you who have taken the risks to set up in business, to develop their own small piece of the market and to put together a working team of employees. Now you want to come along and ask them to take additional risks to take your product to their market – so, what’s in it for them and why should they do it?
Too often we think that we have the best mousetrap and others should be only too willing to throw their lot in with us. Instead, we should be looking at this opportunity from their point of view and be willing to recognise the risks which they see in the venture. Once we see things from their perspective, we can do a much better job of putting together a compelling business case for a partnership.
Empathy with the potential distributor is 80% of getting a distribution deal signed and working. When we put ourselves into their situation and are able to provide the level of support, training and co-investment to help them achieve their objectives, we are a long way to achieving our own.
We need to acknowledge that they are an independent business with their own set of issues to deal with and their own set of personal and business objectives. To be successful in winning them over and getting them to actively support our marketing program, we have to ensure that our joint venture aligns itself with what they want to do and what they want to achieve. It is not simply just about us – it is really about them.
So, basically, how do we make it work for them?
Seems a very simply question and yet it is often not foremost in the growth strategies of most firms seeking to expand via a distributor channel strategy.
Distributors want to know that you are out to make them successful, not just yourself. They want it to be a personal commitment of the business owners, not just another sales manager’s short term target and commission. They want to see you invest with them and not just wait for them to send you orders.
If you get the strategy right, it can be a very effective way to grow your business.
Tom McKaskill is a successful global serial entrepreneur, educator and author who is a world acknowledged authority on exit strategies and the former Richard Pratt Professor of Entrepreneurship, Australian Graduate School of Entrepreneurship, Swinburne University of Technology, Melbourne, Australia.