Does your overseas distributor have the ‘E’ factor?
I have this new mathematical formula for you: Quality of Distributors x Enthusiasm5 = Export Sales in AUD. What does that mean?
Recently I was visiting one of our clients and we discussed how we should refine our distribution strategy for Europe.
We talked about the distributors’ profile, what they should look like, what customer portfolio should they target. And as we are talking about very rational descriptions, consider size, territory, product range, customer profile etc … (you can download our distributor’s profile template on the Exportia website).
I feel something is missing though. Having established a number of distribution networks throughout Europe for Australian businesses with my business Exportia in Australia, and when I lived in Europe, I can say that the best distributors, were the ones that were enthusiastic!
Of course, they were in line with our ideal distributor profile, but what made a difference between an average and a good distributor was definitively their enthusiasm.
Of course, if you are a very rational person, you will think, how do I know someone is enthusiastic? You can already picture in your mind that a Scandinavian and an Italian show their enthusiasm very different ways!
What it comes down to is what triggers their enthusiasm. Over the years I have worked with very high performing distributors, whether they were large or small operations.
What triggered their enthusiasm was most of the time linked to the following main factors:
Enthusiasm Factor 1: You give them the new bright and shiny product
Distributors like to have new products to add to their range. Their sales representatives like to use an opportunity to schedule a meeting with their client to show them what’s new.
Enthusiasm Factor 2: You provide a competitive edge – a differentiator
In very competitive markets, being the first to introduce a product in a market creates a lot of interest for a distributor. If they have a bit of lead way (not talking the about exclusivity, avoid exclusivity), they will embrace the fact that they can offer something different to their competitors. They are tired of selling products that all their fellow distributors are selling.
Enthusiasm Factor 3: Your product gives them access to new clients
If you enable them to enter new markets, or win a new client, then you are of interest to them! I’ve had great results from distributors, arising from the fact that they saw we had leads for them. The distributors would not otherwise have had access to specific accounts. We definitively got their attention this way!
Enthusiasm Factor 4: You offer better margins
When distributors sell well established brands, the problem they face is that every single distributor in the market is selling these brands. It often has caused their margins to erode. Therefore if you come in with better margins, they will definitively become motivated!
Enthusiasm Factor 5: You are in-line with their strategic direction
Overall, if you tick all the previous boxes or most of them, it means you will be in line with their strategy. Most importantly, what you need to check is where the business is heading. Is your product important to them at the strategic level? Will succeeding with your brand help them meet their strategic objective? If yes, then you will have a very enthusiastic distributor!
All these factors, are the things you need to look at in addition to a traditional ideal distributor profile. A distributor can be perfect on paper, but extremely slow to move on your behalf and will require a lot of effort to generate sales for you.
So when looking at engaging with international distributors, make sure you trigger their enthusiasm. Check which distributors in the given country could meet several of these five enthusiasm factors!