Your distributor is somewhere between an employee and a customer. In fact, research suggests that you should treat your distributors as both an employee and a customer.
More importantly, the most effective supplier-distributor relationships occur when you treat your distributor as a partner.
However, crossing the barrier between starting a relationship and building a true partnership requires dedication and an understanding of what the relationship needs to succeed. Whether starting a new partner network or enhancing your current network here are a few essential tips to help you be more effective in working with your distributors.
Understand Your Distributor
When you bring a distributor into the mix, you’re no longer selling directly to the end customer or a retailer. You’re selling to the distributor AND the end user customer. And while it sounds abundantly obvious, many companies forget this critical fact. Selling the distributor on your products is just as important.
However, if you’re selling to the end-customer instead of the distributor that will get your product to the end-customer, that distributor may not be willing to fully buy in, or they may not have a complete understanding of how they fit into the picture. Instead of helping you, your distributor is now potentially a barrier to sales.
Don’t forget the role that your distributor plays in the sales process–and don’t forget that you need to sell to them too! Individual distributors have unique approaches and may specialize in certain demographics, geographic areas, or even specific products. Regardless of their focus they need to feel needed, wanted, supported and well trained.
Your job is to learn what matters to them most, the tools they need and show them how your product fits into the picture.
Be an Active Participant
Distributors and suppliers on both ends of the equation view each other as employees and customers in equal measure. Remember, this is a partnership.
And just like any relationship, it works better if you’re an active participant.
For example, you should clearly understand each other’s procedures and policies to make improvements and get your respective policies to align for your customers’ benefit. For example, If a distributor’s return policy gives too little turnaround time for you to give credit, have a conversation about how to resolve the issue. Typically, when clearly communicated with a win-win approach both sides can come to an adjusted outcome that fits everyone. When one side is overly rigid and unwilling to budge, at least where they reasonably can, relationships strain.
This outlook and demeanor helps show that you’re willing to hold up your end of the bargain and you’re willing to go the extra mile to ensure your distributors and your customers are happy with the results. Distributors are more likely to meet you in the middle if they can see that extra effort. So often distributors feel they’re being ‘talked at’ vs. ‘talked to’ in their relationship with their manufacturer partners. While oftentimes business processes cannot be changed for each distributor a willingness to communicate and look for a solution is powerful in relationship building.
Use Proper Segmentation
Like you, distributors have their own unique types of customers and ways of dealing with those customers. They know their own customers better than anyone, which means they know how to target them and draw them in. A local distributor is nearly always going to have their finger more closely on the pulse of what’s happening locally than the factory. When communication lines are open this local knowledge leads to better penetration for both parties.
If you treat all of their customers exactly the same, you’re missing out on a valuable marketing opportunity. In fact, market segmentation can serve as a useful strategy for your partnership.
When you use market segmentation, you’re marketing to customers based on their spending capabilities, and product needs which means you’re more likely to find their sweet spot. Here’s the good news: distributors know their customers just as well as you know yours.
Working together allows you to pool your knowledge and successfully integrate products and sales strategies for conversions.
Establish Best Practices
However, it’s also important to establish best practices early on in the relationship.
From the distributor side, their success depends on their ability to sell products. However, your customers don’t differentiate between suppliers and distributors–to them, there’s just the sale experience. If a customer has a bad experience, they won’t come back to do business with either of you, and you both lose out.
Establishing best practices helps you to clarify your expectations and the way you do business. This way, you both know what you’re signing up for and you know that you have a shared vision of what success looks like.
Set Clear Targets
While you’re setting your best practices, it’s also important to set clear targets. If best practices establish expectations, clear, measurable targets establish your goals.
Remember: if your distributor doesn’t know your goals, you cannot reasonably expect them to meet those goals.
You have your marketing goals, and your distributor has theirs. You’re most likely to build a successful partnership if you both know your respective goals and you’ve had a real conversation about how to make those goals work together.
One way to ensure that your marketing is in-sync is to promote together. However, it’s not just the simple act of releasing promotional materials–it’s the process of building a shared distribution effort that strengthens your supplier-distributor partnership.
If you approach this as an active effort, just like you would approach your own internal marketing, you’re taking responsibility for the role you play in generating leads. You’re also encouraging your distributor to do the same.
This gives you a chance to clean up your sales pipeline on both sides and ensure that you both bring something to the table. That way, both sides are getting something out of the relationship.
Realize It’s a Two-Way Street
Above all, you have to realize that your relationship with your distributor is a two-way street, and it’s only as good as both sides make it.
You count on your distributors to forecast inventories and come to you to address issues as they arise. In turn, they should be able to count on you when they need you. As the relationship grows, you can extend the partnership to other areas and refine how you work together.
Remember: it’s a partnership. If you approach it thinking only of what you can get from it, it won’t be a satisfying partnership.
Working With Your Distributors Shouldn’t Be a Trial
Working with your distributors shouldn’t be random. Your distributor is both a customer and an employee, and you should treat them with the care you would afford to any other customer or employee.
That said, working with distributors shouldn’t be a trial. It shouldn’t test your patience and frustrate your team. If your tools are getting in the way of an effective partnership, it’s time to rethink your tools and upgrade to something that actually helps you.