Gain mindshare with your manufacturers

Learn how to get manufacturers to pay more attention to you

by Reed Stith

Some distributors seem to get far more support and attention from manufacturers than seems fair based on their market share. Their secret? Successful distributors understand what drives the manufacturer’s sales team and know how to find areas of common interest. These distributors also know their own unique value to the marketplace and how to target desirable new business. This breed of distributor understands the business side of its prospects – focusing on the prospect’s real needs, budget and timetable – and also understands concepts such as total cost of ownership and total cost of acquisition. Finally, popular distributors know how to communicate openly and frequently at all levels within the manufacturing organization.

Alignment strategy
Every salesperson knows the key to success is satisfying the customer. When selling a manufacturer on the idea of supporting a distributor, the same principle applies.

“Aligning yourself with where the manufacturer makes the most profit is the smartest strategy,” says Bill Wilson, president of Wilson Wholesale, a building materials distributor with two branches in the Chicagoland area. “If you do it right, they are so focused on helping you sell their products that they are basically working for you – most of the leads come to us.”

Wilson provides an example of a supplier that was having trouble building sales volume for its premium products because no distributor would promote them. Wilson offered to stock every size and color in exchange for sales support, and sales took off. The key, as with selling any product or service to a customer, is discovering what the manufacturer’s sales rep is trying to accomplish, what measurements the rep is accountable for, and what pressures and frustrations might be obstacles to the rep’s success.

“Find out how the territory rep is compensated and motivated,” adds Mark Hurt, vice president of sales for SSP Fittings in Twinsburg, Ohio. If a distributor understands and supports how the manufacturer’s people are motivated and recognized, everyone will want to work together as a team.

“One of our distributors was very creative and arranged to have doughnuts delivered to our customer service and shipping departments as a thank you and as a reminder of how important they were,” Hurt says.

Mutual planning
Mutual planning is an element of successful manufacturer and distributor sales growth that everyone talks about but few do well. Steve Phillips, channel manager at Ross Controls in Troy, Mich., says a written plan demonstrates the level of focus and commitment of the distributor that crafted it.

“High-performing distributors like to be held accountable and hold their manufacturers accountable. When I visit a distributor, if the sales manager references the plan, I know that distributor is working the plan,” he says.

The Mutual Action Plan (M.A.P.) concept requires genuine two-way sharing of market information, business goals, and competitive intelligence.

“Sharing information that helps the success of the whole distributor network gets higher visibility within our organization,” says Hurt. “The stories get circulated and the distributor behind the event is acknowledged as a team player. At the same time, it is our duty to keep the distributors informed about what is coming up from the factory.”

Companies also should develop action plans with assignments and target completion dates for both the manufacturer and distributor. It’s best to put the plans down on paper. Channel partners that devote significant hours to developing these plans learn that the process continues all year long. It can’t become a quick paperwork exercise that is never reviewed again until planning time comes around next year.

Growth = new business
Finding new business from existing or new accounts also attracts support from a manufacturer’s sales force. A distributor should have a focused list of targets that it can credibly serve better than any other competing alternatives. The list should include company names and specific people in specific job titles and departments.

“When I visit a distributor for joint sales calls, there’s nothing worse than going to happy, satisfied customers,” says Phillips. “We want to talk to high-potential customers that are buying from our competitors. I want meaningful calls that translate into new sales, not glad-handing calls.”

Manufacturers and distributors agree that joint calls require preparation and planning. One regional bearings and power transmission distributor developed an incentive program that pays distributor salespeople for bringing in new business for specific products from specific manufacturers. The manufacturers split the cost of the incentive because the program is focused, measurable and strategic.

The best proof of success is the number of manufacturers lined up waiting to participate. The distributor conducts two or three programs in any given six-month period. This focused approach also helps smaller branches get manufacturer’s reps to spend time with the distributor sales team.

Create an agenda
Another best practice to make distributor salespeople stand out from the crowd is to simply create an agenda for each sales call, with specific objectives and clear instructions to the manufacturer’s sales rep about his or her role in the sales call. In general, the distributor salesperson should run the sales call, from introduction to close, using the manufacturer salesperson as a technical expert. Send the itinerary for the day(s) to the manufacturer in advance to allow for proper preparation. Don’t forget to come prepared with adequate literature and samples.

Another valued distributor growth strategy is to host a technical event with a manufacturer. Brian McCue, vice president of sales for Young Chemical, headquartered in Brook Park, Ohio, had so many small and medium sized accounts that it would have taken months to adequately introduce the manufacturer to them. He approached the manufacturer with the concept of putting on a technical symposium to highlight the manufacturer’s products and Young Chemical’s value-added services.

“We were able to see about 45 people in two days, from which we identified 38 legitimate projects. The manufacturer saved a lot of time and money, and we are measuring the results and giving regular feedback about our progress,” McCue says.

Manufacturers don’t expect distributors to find all of the new opportunities. In fact, most manufacturers understand that marketing and lead generation is predominantly the responsibility of the manufacturer. Yet the distributor can be a star by performing lead follow-up.

“Following up on leads and our marketing programs is the most critical thing a distributor can do,” says Gus Kontonickas, president of NSK Precision Bearing in Indianapolis. “Of course, we need to send out qualified leads.”

Good sales teams have a clear definition of what follow-up means. This definition should contain several elements, such as when to follow-up on the lead (must contact within seven days, for example), the type of follow-up (in-person visit or a letter with a line card), and feedback provided (ranking of lead, probability of closing a deal, size of opportunity).

Know your customer and your value
“I’m going to look for someone who knows how to sell their value,” says NSK’s Kontonickas. “Distributors that really understand an opportunity, and really know about total cost of ownership and total cost of acquisition, are the ones that can identify applications where together we can achieve differentiation through reduced inventory costs, for example. These distributors know what we can do for the customer, rather than just complaining about price.”

A niche distributor – focused on a specialized area where it provides valuable services to customers – is very attractive to manufacturers.

“These distributors understand their value proposition,” Kontonickas says. “And they bring information to us. If they say they need help at an account, we are all over it, because they are being open with us. Manufacturers are responsible for opening markets, but we can’t do it if our distributors don’t help us with information. Withholding information is a real obstacle.”

Knowing your customer also means understanding the customer’s other options. Doing your homework includes not being naïve about the strength of a competing distributor’s relationship, or the bias of a company toward doing things themselves. Manufacturers favor distributor sales calls where the distributor qualifies the opportunity, knows that the budget and pricing will allow both manufacturer and distributor to be profitable, and understands how to navigate through the company’s decision-making process. Bringing a manufacturer salesperson in before this background information is known is not a good use of a joint sales call.

Communicate frequently and openly
The final best practice for getting more sales support from a manufacturer salesperson centers on communications.

“The distributors I respect the most are always calling me. They are proactively promoting my product and therefore are running into questions and problems that they need to talk to me about,” says Phillips. “If a distributor isn’t calling me, they probably forget about my products. That is sort of a red flag for me.”

Frequent communications – with details about accounts, applications, technical problems and competitive information – is precisely what a manufacturer needs from a distributor.

A centralized sales database (such as sales force automation, customer relationship management or contact management software) will generate product-specific reports about completed and planned activities for each manufacturer. One company that sells sensors and related devices automatically generates an e-mail “mini call report” to the manufacturer after each call where a manufacturer’s product is discussed. Some distributors use this type of system to prepare monthly or quarterly reports to the management at the manufacturer.

“It is important to demonstrate return on investment on a manufacturer’s time,” says McCue. “We are constantly following up, measuring the results of earlier efforts such as our technical symposium events, and giving them feedback and proof of success. The easiest way to get support is to give the supplier a strong ROI on his investment.”

Communication is essential at all levels, from branch to corporate, from project details to strategic direction. Wilson Wholesale makes an annual trip to meet the top executive of all key suppliers.

“I pay my own way,” says Wilson. “I want them to know I value the relationship and that I’m invested in making it work. I go over my plans for the year and ask about what we need to do to get where we both want to be together.”

The manufacturer’s top executives pay attention to distributor communications as well.

“Manufacturers will support distributors who are open with information,” says Kontonickas. “We gravitate toward partners who trust us and aren’t carrying around old skeletons from decades past. We are loyal to the distributors that bring us to the dance and we know this loyalty runs both ways, even through rough times.”

Aligning sales efforts with mutual goals, purposefully pursuing well-qualified new business opportunities, diligently emphasizing customer-centered value and communicating clearly and consistently aren’t new ideas. The problem is that very few distributor sales teams are disciplined enough to execute these practices on an ongoing basis. For this reason, manufacturers are more than willing to support and cooperate with distributors that show a commitment to these fundamentals. The good news is that as a distributor, there is a very credible opportunity to be in the upper echelon of a manufacturer’s distribution network, regardless of overall sales volume.

Reed Stith of Cleveland-based Caxton Growth Partners has more than 25 years experience developing and executing successful growth strategies for industrial manufacturers and distributors. Reach him at (216) 619-8200 ext. 107 or at rstith@caxtongrowth.com.

This article originally appeared in the July/August 2007 issue of Progressive Distributor. Copyright 2007.

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