I’ve written a lot about why working with a distributor is probably the best option for your brand, but not about boosting distributor engagement in your export markets. If you enhance distributor loyalty what will that achieve for you? Why is this so important & how can you go about it?
In the world of international trade, where the global marketplace offers seemingly endless opportunities, distributor loyalty is often underestimated in its importance. For companies selling consumer goods, especially small and medium-sized enterprises, distributor loyalty can make or break your success in export markets.
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Why Invest Time in Boosting Distributor Engagement?
Let’s think about it for a few moments. Do you invest time to increase engagement in your in-house teams? Why do you do that? Probably because you know that on the one hand motivated teams are more productive and on the other hand staff churn is expensive.
It’s no different with your distribution partners – they are like your extended sales team in your export markets. It requires more leadership and empathy to ensure they stay motivated though as you are not able to directly control their tasks in the same way and they also have other brands that they represent (probably).
The core of the matter though is that engaged, competent, and accountable distributor salespeople are the driving force behind your sales growth. It’s not enough just to motivate the owner of the company.
Think about where you are today with your sales – if the sales team were motivated to put their additional energy into your brand rather than Joe Blogg’s then chances are your sales would increase accordingly. If however, the distribution partner is demotivated and you need to think about changing a partner then you will be losing at least 6 months worth of sales with the handover (even if then things are better in the long run).
But what does distributor engagement actually look like?
What Does Distributor Engagement Look Like?
Distributor engagement is not a one-size-fits-all concept. To grasp it, imagine your distributor’s salespeople feeling that your company is their preferred partner. They should sense that they are part of a team, driven to perform like your in-house employees. I personally don’t like the way many companies call this a “family” as families have far too many negative connotations for many people, but the team at your distributor should feel that they are part of a community.
Ideally, the salespeople should invest more resources, time, and mindshare than one would consider fair based on your % of their company’s sales. This means giving your brand a higher share of their attention. For instance, if your brand represents 10% of the distribution partner’s turnover, they should ideally dedicate significantly more than just 10% of their working hours to your products. More hours and greater mindshare (& possibly additional staff or dedicated sales people) translate into more sales.
Building such engagement isn’t just about financial incentives. It’s about fostering a sense of community, offering personalised training, highlighting their achievements, and forging stronger bonds with your in-house teams. The key is to make them feel valued and part of something bigger if you want to enhance distributor loyalty.
How Can You Increase Distributor Engagement?
To translate this vision into reality, there are several fundamental building blocks:
Incentives:
While not the sole driver, financial incentives remain important. Consider rewarding high-performing salespeople and teams. What you have to remember though is that in many countries, sales teams are already rewarded quite well (if they are successful) so chances are that for the sales team at least, money is seen as a given.
It’s also a really sensitive topic for the brand owner to start offering incentives to either the sales team or other departments, so you might just want to offer some kind of a bonus to your distributor company themselves if they meet certain KPIs. This is a good way to enhance distributor relationships without treading on anyone’s toes.
If you want to incentivise the sales teams directly, then this has to be done in close coordination with their own management (who may be willing to contribute financially). For example giving a bonus or prize if certain targets are met/exceeded. This don’t have to be purely financial – talk with your distribution partner to see what is the best option. I’ve run competitions amongst sales teams before now where the prizes have been white goods (in a developing market) or trips abroad.
Remember that if you can increase distributor engagement it will also increase your sales so it’s worth making some investment in this.
Personalised training can really enhance distributor loyalty
Empower your distributors with the knowledge and tools they need to excel in your partnership. Tailor training to their specific needs and market conditions.
This is especially important at the start of your partnership when you want to spark that initial enthusiasm for your brand. Let’s face it, unless your products are really well known, there may be a certain amount of resentment amongst the sales team that you are making them more work so offering in depth training makes it easier for them to start earning money with your products as well as binding them emotionally to you and your team.
Training is not only important on your products as you probably offer at the start of a cooperation but also on an ongoing basis, where it becomes more of a coaching or mentoring relationship. As the country manager, you probably see best practice from a number of countries on a daily basis so sharing that knowledge with your distributor teams can help give them the edge in the market to supercharge your sales.
Build Community
Running global and regional meetings can help bring your partners together to enhance distributor relationships not only between the department heads, but also the members of the sales teams.
Create a sense of community among your distributors’ salespeople to increase distributor engagement. This can be through regular meetings, sharing experiences, and even online forums or Slack channels where they can connect. I personally hate Slack and it’s not common all over the world but you can probably find suitable alternatives that are acceptable to everyone.
Of course, this can be challenging if language skills are an issue but if you run eg. regional sales meetings then it’s more likely that the sales people have a common language in which to exchange experiences, build bonds and have fun together.
Offering the chance to travel outside of their own regions is also something which can be exciting for many team members and help increase their loyalty to your company.
Highlight Their Achievements
Acknowledge and celebrate the accomplishments of your distribution partners and their sales teams. This recognition reinforces their sense of being part of your team.
If you run annual global or regional sales meetings as I’ve mentioned above then you can ask members to present their successes as best practice examples for other markets to learn from.
Strengthening the Bonds with Your In-House Teams
Align your in-house teams with distributor salespeople. Encourage collaboration, sharing of best practices, and a sense of unity. If you want to increase distributor engagement, you have to reduce that feeling of “them” and “us” in both your own team and the distributor’s.
Meeting online is simple in most cases these days however wherever possible involve your in-house teams with in-person meetings too (especially if a distributor visits your office). This is not only motivating for both sides but helps to reduce friction in the relationship. It’s much easier to talk about difficult issues with someone that you had coffee or lunch with than with a person you only saw via a zoom screen.
Additionally, understanding WHY certain things are not possible will also increase understanding on both sides rather than defaulting to the simple belief of “they are always so difficult and unreasonable”.
Streamline Your Internal Communications
Efficient internal communication ensures everyone is on the same page, reducing misunderstandings and fostering trust. Read the summary of my discussion with Kate Isichei here about creating an international internal communications strategy.
As I mentioned at the beginning of this post though, you should also be treating your distribution partners as a part of your team and extending as much of your internal communication to them as possible to promote inclusion and engagement. If you want to enhance distributor loyalty, you need to have them as well informed as possible.
Make the Content System Easily Accessible
Provide easy access to resources, product information, and support tools. This facilitates smoother operations.
Ideally you should have a handbook (or playbook – however you want to call it) for all your distribution partners and the easiest way to store this and make sure everyone always has access to the most up to date information is to have an online platform where all your materials are available to the relevant people. (Of course you need to have a system also in place to manage access to this)
It’s important that you consider how to make it easier for the distributor teams to do a great job with your products and access to information round the clock, whichever time zone they are in is a part of that. (Remember that choosing the right platform is also important here, especially if you are working with markets such as China where there are certain restrictions in place.)
Celebrate Together to Increase Distributor Engagement
I’ve already mentioned the benefit of organising events and activities that involve both your in-house and distributor teams. Building personal connections in this way can have a profound impact on engagement.
How about not just partying together in a cool location, but also organising an event such as distributor of the year to really enhance distributor loyalty? You can determine the parameters at the beginning of the year and offer some kind of trophy. Be sure to ensure that it’s as fair as you can make it though otherwise that one partner who has won the last 2 years and was hoping for a third victory will be crying “fix” from the sidelines. If that’s in danger of happening, make sure you switch up the criteria and include some weighting to also give the smaller countries a chance if need be. You can change those criteria along with your brand priorities.
That’s not the only option you have though: depending on the size of the group I know of teams who’ve had salsa lessons, cooked together or learnt to dance the Viennese waltz! Remember it should be fun and not stressful for the participants.
Measuring Distributor Engagement:
What gets measured gets managed!
Measuring distributor engagement is a critical aspect of the process. It ensures you’re on the right track and allows you to make necessary adjustments. Here are some different methods you could use to gauge distributor engagement:
- Sales Hours: Track the number of hours distributor salespeople are dedicating to your products. More hours often translate to better engagement. This could also be calculated in terms of FTEs (full time equivalents) or perhaps you have a couple of sales people who are 100% dedicated to your brand.
- Feedback and Surveys: Conduct regular surveys to gather feedback from your distributor sales teams. This provides valuable insights into their level of engagement – your internal communications team should be able to help with preparing such surveys – make sure they are then appropriately localised. You do have to be careful in any cross country comparisons though as different cultures respond differently to these types of polls.
- In-Person Interactions: Assess in-person interactions during trade shows and meetings. Engaged distributors are more likely to show up and actively participate. Don’t leave this to chance though – make sure you clearly articulate your expectations!
- Participation in Training and Events: Keep an eye on the participation rates in training sessions and events you organise. High participation indicates strong engagement, but just sitting there tapping away on the phone doesn’t equal engagement – it’s more “physical presence because my boss said I have to”.
- Distributor Loyalty Metrics: Develop metrics specifically for measuring distributor loyalty. These can include factors like retention rates within the sales team and growth in sales over time. This kind of metrics should be an integral part of your end of year distributor performance review.
Some final thoughts on boosting distributor engagement
In the realm of international trade and export markets, enhancing distributor loyalty is a lynchpin for success. To accomplish this, you must invest time and resources in boosting distributor engagement. It’s not merely about offering financial incentives; it’s about creating a thriving community of distributors who feel valued and integral to your success.
By focusing on incentives, training, recognition, collaboration, and transparent communication, you can cultivate a network of highly engaged distributor salespeople who drive your sales growth. Remember, in the world of international trade, distributor engagement is the key to unlocking your full potential.
There is just one caveat I would add. Amidst all of this “my distributor is part of our team” you also shouldn’t forget that at the same time, your distributor has their own goals and aims which are only partially aligned with your own. They are not ACTUALLY part of your team. So if you want them to act like it you have to really put in the effort to emotionally bind them to your brand whilst making it as easy as possible for them to be economically successful.
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If you are interested in working with distribution partners in your export markets, you might find these posts also interesting:
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- Carrying out an Annual Distributor Performance Review
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- Factors to Consider when Deciding on Payment Terms
- Advantages of Working with a Distributor in Export Markets
- Making the Best First Impression in International Business Meetings
- Finding the Perfect Partner: Distributor Dating in a Hybrid World
- Store Checks in International Sales: a Retail Audit Example
- How to Make an Export Plan Part 1
- How to Make an Export Plan Part 2
- Starting to Think About Your International Distribution Agreement
- An International Distribution Agreement Checklist Part 1
- A Distributor Contracts Checklist Part 2
- The Legal Requirements in an International Contract 3
- Types of International Distribution Channels
- International After Sales Service
- 55+ Questions to Ask When You’re Looking for International Distributors
- International Customer Service in Korea: Dealing with Media Crises
- Why an Integrated Business Planning Framework could Improve your Exports
- Export Pricing Strategy in International Trade as a Key Factor of Product Market Fit
- Why and How should you Enhance Distributor Loyalty in Export Markets?
Kathryn firmly believes that business is done between people, and therefore places her focus on building strong relationships that form a solid foundation for doing business.
When she's not travelling around the world, Kathryn enjoys playing clarinet in her town's wind orchestra or sharing her love of the outdoors with her Scout group.