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Date
28 September 2016
Author
Delphine Duclos
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Managing a distribution network is always a complex task. It involves motivating salespeople, sales representatives whom you rarely see. This typically means energizing field sales reps who work alone or in pairs in their territory, visiting distributors at best once a month. And when they visit a distributor, they usually only have time to speak with one or two people (e.g., a salesperson and a manager). Motivating the entire sales force is therefore a real challenge.
Energizing a distribution network first means connecting two key players: the brand and the resellers. This connection is ensured by sales representatives, who are themselves managed by sales directors or even regional directors.
Within the distributors, there’s another hierarchical pyramid with managers overseeing salespeople who, in turn, sell to the end customer. The challenge is therefore to motivate and coordinate both pyramids: that of the brand and that of the distributor; knowing that, in the end, it’s the field sales representative who will make the difference.
You will have succeeded in your engagement efforts when a customer arrives at a distributor asking for your competitor’s product, and the salesperson instead recommends yours. Incenteev has selected three key points for you that make a difference in managing a distribution network.
Distribution Network: Segment it to Better Energize it.
Your human and financial resources are not unlimited, which is why you need to allocate your engagement budget according to priorities. Several criteria exist to determine which distributors you should prioritize.
The distributor’s importance
In terms of revenue or margin. You should prioritize allocating your resources to the most important distributors. According to Jérôme Blanchon of Overdrive: “Very often, it’s habit or preconceptions that push sales representatives to visit one client rather than another, leading them to miss opportunities.” A weekly visit for a distributor who accounts for 50% of your sales will be far too little, whereas it will be too much if they account for 1% of your revenue.
Similarly, prioritize “large” distributors for costly engagement activities such as sales challenges. That said, the main work is to energize and communicate with all your partners. By setting up a communication platform, you can easily reach all distributors and all their sales representatives, not just the most important ones.
Exclusive/Non-exclusive Distributor
You don’t need to make the same efforts with an exclusive distributor as with a partner who sells competing brands. An exclusive distributor will need to feel respected; treating them as a “VIP” is the best way to maintain an effective and lasting relationship.
For a non-exclusive reseller, you’ll want to make an impression, to stand out. This can be by organizing sales challenges or by offering a support service that significantly distinguishes itself from your competitors.
Also, consider having a training service for your resellers that is better than your competitors’ for non-exclusive partners, so they know how to better sell your products. The goal is to ensure that your products and brand are top-of-mind for salespeople.
Growth Potential
You should obviously prioritize partners with high growth potential: either new ones or those not utilizing their full capacity, by providing them with special support (training, incentives). The aim is to retain the best and boost resources.
Know your Distributors and End-Salespeople to Adapt Incentives and Messaging.
The sales representatives in your distribution network will appreciate it if you know them and are aware of their challenges. Furthermore, from a performance perspective, it is essential to be able to manage the results of different agencies and their individual salespeople in real-time. Incenteev provides you with detailed statistics on your collaborators and their evolution over time, to help you in your decision-making.
The effort made by your resellers to prioritize distributing your products largely depends on the human relationship you maintain with them. It is therefore about re-establishing connection within your distribution network.
Energize, Facilitate Communication, Don’t Manage.
If you give direct orders to your distributors’ sales representatives, you run the risk of them being considered de facto your employees by law. For example, when the Clairoix site was closed by MAG, a subsidiary of Continental, in 2009, the 1,000 laid-off employees successfully argued in French court that they were de facto employees of Continental, which then had to bear the costs of their dismissal and re-employment.
Instead, implement motivation and training campaigns, but avoid anything that resembles direct orders to your distributors’ employees. For example, registration for an engagement platform should, in principle, be optional, but in practice, absolutely ensure that all employees register on your platform.
To do this, implement a gamification strategy that motivates employees to interact. Show them that they will improve and gain a more global view of their network through the platform.
Generally, your role is largely to streamline communication among all links in the chain rather than managing each level. This is where a gamified platform specialized in distribution network engagement like Incenteev will bring you significant benefits. Indeed, if all levels of the hierarchy have access to information and can discuss it among themselves, decisions will be made faster, and the various stakeholders will be more motivated.
Sometimes agency managers will object to you communicating with their sales representatives. Legally, these individuals are indeed dependent on the agency heads, not the supplier. To convince them, show them that you are providing them, free of charge, with a modern management and communication tool that will save them time and increase efficiency. You can also offer group rewards, by agency, which also include agency management to involve decision-makers.
Thus, to make the most of your distribution network, it is primarily about allocating your resources to the distributors who will bring you the most value and streamlining communication among the different members of your network. And you, what are your tips for energizing a distribution network? What challenges do you face?
Guide – Sales Agility: The Keys to Success
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Date
28 September 2016
Author
Delphine Duclos