Monday, March 02, 2015

Love Your Dealer

While the face of trade has changed remarkably over the last couple of decades, the place of the dealer has actually got strengthened.

Misunderstanding the internet, many companies tried to focus more on direct marketing and less on establishing any channels for distribution, and have found themselves on the back foot.

Within the world of distribution channels, establishing and building an effective dealer net is certainly one of the most challenging but essential tasks. Anything can be sold through dealers, and without good dealers very few things can be sold!

Your dealer is very often the primary interface that your product or service has with the customer. The relationship that your dealer develops with your end user is of critical importance to the acceptance and use of your product/service. A fact that is often ignored is that it is actually the dealer who is your primary customer. The dealer believes in your product/service and places orders for what you are selling. It is the dealer that pays you for it. Only afterwards does it reach the hands of the end user. Your CRM must therefore begin with your dealers and in turn, the dealer's CRM is critical for your success! Unfortunately we see a great deal of dysfunctional relationships between manufacturers and their dealers.

The antagonism is often mutual: Dealer's Perspective:

  • Poor logistics
  • Poor incentives
  • Poor service
  • Few or no PoS/PoP aids
  • Poor advertising support
  • Insufficient branding effort
  • Not responsive to customer needs/complaints
  • Company sales team visits are too infrequent and too brief, or not reachable
  • No interested in sharing expenses for special promotions/events
  • Poor packaging.

  • Manufacturer's Perspective:
  • Insufficient selling effort
  • Insufficient stock on hand
  • Always demanding more margins
  • Always demanding unreasonable ad spend
  • Always cribbing about delays in supply but always orders at the last minute
  • Not attending to customer needs/complaints
  • Always dissatisfied with provided PoP/PoS aids
  • Not cooperating with the sales team.
  • Always asking for funds for special promotions/events

  • And the lists will go on. But just look at the amount of point-wise convergence! Just scanning a typical list shows that there is more of point of view here than substance. Not that the complaints are not real, but when you have so much of common ground as the basis to build on, there's no excuse at all for not being able to create vibrant and productive relationships!

    It is primarily the manufacturer who has to take the initiative to get relationships back onto a sound footing. If you don't do it and instead sit brooding over lists of complaints (as above) the result will be that your product or service will be put on the back burner. Most dealers have more than one thing to sell. They will sell what is profitable and what best cements their customers to them. 

    When you eventually do 'zoom out' and take a macro view, you will see that the demotivation of this or that dealer is the least of your problems. When customers have to discover your stuff for themselves, even if what you've got is good, the best of the rest (of your channels) can only deliver 10% to 20% of what you are capable of achieving through a good dealer net. The vast bulk can only come from enthusiastic/knowledgeable dealers who will build your brand for you, and that will happen only when you create the right environment.  

    Most of it is fear - fear of being taken for a ride! Fear comes from the micro-view. Go ahead and be a hard headed businessperson - Knowing where you have to get, you now know what you can and cannot do. Make no false promises. Be responsive and STAY in communication. In fact, make communication your first priority. Mutual understanding and agreement should be the entire basis for your dealer relationships. Share the actual FACTS. Put yourself in the dealer's shoes and try to sort out needs from wants. Be responsive, understanding, prompt and always keep your promises. Remember that the dealer chose you. 

    Most times, this dealer is your dealer because they were convinced that what you've got is what their customers need. Take feedback from dealers seriously. If you are messing up somewhere, you can count on your dealers (who perhaps know as much or more about your type of product/service than you do) to highlight the issues, and even help pinpoint where there is waste and how the logistics etc. can be improved - or whatever happen to be the particular points of contention.  

     And if your marketing or operations people don't get this message - fire them! 

     Try it - vibrant love affairs are infectious and can be virally contagious

    Go get the 90% that's out there waiting for you...

    #dealer #marketing #distribution channel #branding #CRM #communication #love #PoS #PoP, #advertising #logistics

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