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...
















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

You Can Do Magic

Start-ups have gone from dime a dozen to becoming legion. That's both good and bad. Adjectives like exciting, enticing, and vibrant, describe our business environment, yet on the down side, the resulting competition for funds and for the market is simply awful.

Working as a consultant to start-ups is fun and very challenging. I've been through a longish string so far, and though the projects were diverse, as the start-ups scene has heated up, some common challenges and solutions have emerged. From my experience, here are just a few of the commonest failure scenarios.

Challenge 1 – The Dream Machine. A lovely product/service that addresses major pain points, is well designed, passionately believed in and yet won't fly. Very often the problem is over confidence. The start-up's mindset runs something like this: “My product is truly revolutionary and it's going places. The market needs me, potential customers are begging for me, so here we come!”

Taking this product or service on to the market usually ends in disaster. Typically, when all the attention has been on the development and there is an assumption of ready demand, the basic questions of timing, needing a 'fit' in the existing market space, developing channels, marketing costs etc. would not have been adequately thought through. If you then have to create a new niche for your revolution, that can be very costly – and just a bit too risky. Risky is a word that neither the Angels nor VCs relish, so when you go looking for funds...

Challenge 2 – The Me Too. 2 or 3 friends get together and look with longing at this busy and exciting start-ups dominated market. Everyone seems to be getting into the action, and perhaps some of their friends have already gotten through the 1st funding phase. Why not? It's simple enough, we have to just brainstorm, so let's put some ideas together and hash it out.

Luckily, most of such never get to Go. There never was the innovation and inventiveness present in the first place. More often than not, the resulting products/services will be copies, and unless they have a lot of luck and also can pool the funds to launch themselves and afford get some brilliant, market savvy folks on board, the results will be either a quiet fade out, or sometimes a spectacular flop. Again, it's unlikely that funding will come through, for copies just don't get much of a bite from funders. You also have a narrow time window, unless what you are copying itself goes big time.

Challenge 3 – Good But Unscalable. After lots of hard work getting all the bits and pieces to fit together, when the funding folks start asking questions on scalability, the big blind spot shows up and that's that.

A lack of market experience and not having good advisers early on very often results in unscalable start-ups. Not every good idea can be scaled up, and if it can't scale, it will not get funded!

Challenge 4 – Built To Offload. Here the idea is to hit the market running, demo the potential and then quickly get someone to buy you out. Sometimes, if the launch and initial publicity are done right, and if the market was receptive, it will work just as planned.

Unfortunately, sometimes not. If you assume that your buyers are out there waiting, and then can't identify them, you might have to go ahead and carry your baby through. Then, as you have already committed so much, it's to the funders that you will go. As the Angel/VC 's needs would not have been accounted for, you might just find that you have multiple problems and are stuck between the proverbial rock and a very hard place.

There are of course many more start-up types, but you get my point. I called each a challenge because, when us consultant types are called in and recognise a failure type, we have a real challenge getting our budding entrepreneurs to rethink their babies!

All start-ups must pay attention to The Market - while bold innovation and brilliant designs can go a very long way, scanty are the concepts/ideas that will 'just naturally' go viral and fly themselves into something much bigger. Do get good marketing advice early on, and keep that advice in mind when looking for funding and launching out.

Finally, supposing you have this great idea, and it is marketable, and even though you failed to get funded, you decide to launch anyway, remember that marketing can be done effectively even on a shoestring budget.The provisos are, IF and only if your service/product has a place to jump in in the market AND whether you will survive and sustain until you succeed.

Where is the point of no return? It's very important here to decide at the beginning when you will know that it's not panning out, and what your jumping off point is!

Study your market as deeply as you can. SWOT out your competition. Targeting is the first priority. Effective social media use with a well designed and promoted web presence (good SEO helps) will get you started, and neither demands a huge big budget. Go for good people (not just high priced!), interview in depth, and then train them as a team. Build commitment, efficiency, responsiveness, a marketing orientation, and give exceptional service (CRM helps) so that 'word of mouth' will also pitch in. If you need a distribution net, pick the small and medium players, work on loyalty, and give them the best returns in the market. Debug and keep debugging.
In short, you know you have a really great idea, think things through, get good market advice early on, be prepared to sweat, and go for it -
pitch and don't stop pitching.

Believe – you can do MAGIC!

This was originally posted in LinkedIn Pulse http://linkd.in/1ypQn00