Appointing an international distributor can be a tricky business. Most business sectors in most countries have only a few main players therefore finding a new distributor can be a real challenge, especially for companies who are new to a market. And once you have found a good distributor, it is important to hold on to them.
Next week a former distributor of mine, and now good friend, is visiting Manchester from his home city of Prague. There are many reasons why I will remember Mira’s work for me in the Czech Republic, but there was one thing that convinced me his was the right company to be working with. I had inherited a hotch-potch of good, bad, and underperforming distributors from a predecessor, and Mira’s business fell into the ‘not sure’ category. He had not been our distributor for very long, and he also distributed for a competitive brand so I was not sure how that would work. The Czech Republic was not a priority market, but Mira was a trier, and he won a few reasonable sized orders that kept me from looking for an alternative.
One day he phoned me to give advanced warning that he might have difficulty in settling his invoices for a few months. He had not been paid by one of his major customers and his cash flow had been hit hard. Dodgy, you might think! Well that did cross my mind, and his announcement would leave us exposed to the tune of about £10,000. What impressed me is that he immediately suggested a payback period, with interest if necessary. I can’t recall the detail, but we reached an agreement on the outstanding invoices, and actually Mira was able to settle all of them well within the agreed timescale. That relationship lasted for six years, and he became an important distributor. That was an example of a reactive way to support a distributor. I had to take a view or risk losing what business I had in the Czech Republic. There are so many ways in which you can actively support your selling partners, and here are two more examples:
I visited a complaint at Turkcell just outside Istanbul where an open plan 2,000 square metre floor had been fitted with our carpet tiles. All the tiles had been fitted in the same direction apart from one, which stood out like a sore thumb smack in the middle of a large open area! Worse, the installers had used the wrong adhesive to save cost, permanent adhesive rather than release adhesive, so I couldn’t lift the tile and turn it in the right direction. Thus an unpleasant argument ensued where I had the installer bang to rights for not bothering to read the instructions in every box of twenty tiles that we had translated into Turkish. Turkcell accepted my version of events, which left the installer with a rather red face, and I left that installation wondering how we could avoid a repetition.
A few months later we were invited by our distributor to exhibit with them at the Yapi Exhibition in Istanbul, the country’s largest annual exhibition for construction materials. Their stand was a big one, so as our contribution to costs I offered to bring over one of the UK’s best carpet fitters to install carpet tiles in the design of our distributor’s logo. The other part of the deal was that our distributor had to ensure that all of their installers would attend on the two days before the show started to take a master class in creating fabulous floor designs from carpet tiles. That whole exercise probably cost our company about £3,000, but we were known thereafter for the quality of both our products and our installers.
The second example comes from my later days of selling carpet tiles. I was collected from my flight at Moscow airport by our distributors and taken straight to the offices to help present our products to BP, who had then just signed their agreement with TNK. We arrived in good time and were joined in the lobby by competitive sales people who were pulling behind them trolley loads of samples. So I asked our distributor, who was clutching a single blue carpet tile, if we had sent our samples ahead. We hadn’t! So the props for my sales pitch were one blue carpet tile, and a dozen specification sheets. There was simply no way we were going to win that business.
You never want to repeat experiences like that so I put on my creative head again, and after some thought and discussion arranged to invite ten of our distributor’s national sales people to Manchester for a two day training session on How to Sell Carpet Tiles to the Commercial Office Sector. The purpose of the training was to stop these excellent sales people from selling carpet tiles as a commodity – “Our blue tile is cheaper than that blue tile”. By the end of the two days (and vodka nights), they had learned to sell the right product for the right purpose and to achieve an overall profit margin higher than if they were to just sell the one type of tile. The interpreter advised me that she had heard one of the delegates say ‘We have never been taught how to sell like this before!” In the following year, that distributor sold nearly £500,000 of our carpet tiles into projects in Russia and Ukraine, a massive improvement in performance.
The Lessons Learned:
1. Invest time and a sensible amount of money in your key distributors
2. Be prepared to demonstrate the qualities of your product versus the competition
3. Be flexible in the way you work with your distributors, and take calculated risks to help them to achieve their sales targets
4. Don’t go out too often in Manchester with Ivan from Krasnodar or your liver will be pickled.
No comments:
Post a Comment