Part 1 Success with Distributors: Stop the debacle, get high performing distributors!
Episode 1: Profile
For the last ten years I have been working with Australian small businesses from high-tech sectors, from medical devices, biotechnologies, clean technologies, ICT to electronics and advance manufacturing. What always stroke me during these ten years, is always the difficulty for small businesses to generate a high level of sales from these distributors, and in our case European distributors. That would often mean, a lot of investment in the overseas market to get the distributor on board and once on-board, sales would be disappointing.
Now is the time to stop the debacle! In this series I am going to cover a simple process to make your distributors work for you.
In this first Episode, we will focus on the first step in this process. Profiling your ideal distributor is a great exercise to start with.
Small businesses that already work with channel partner in ICT sector would be very familiar with this exercise. In other industries, small businesses need to look at their current distributors and pick the ones that have worked for them in the past and why. This will maximise chances of having successful distributors. These distributors may be in Australia or overseas, it does not matter. If you do not currently have a distributor.
Let’s start with three simple characteristics to define your distributor or channel partner profile.
Characteristic 1: What type of distributors are right for you?
This is an important point. There are different types of distributors, some are very catalogue selling oriented. They usually have a very broad range of products they sell. It means it will be hard to get their attention, on the other hand they may have a very good foot print in the market.
If your product or solution is more technical, like our clients, you would require a more solution selling type of partner. It means in that case the sales representatives are able to sell a solution solving a problem, rather than a commodity sale.
This leads to the profiles of sales representatives that best sell your product.
Characteristic 2: Which clients and end-users should your distributor focus on?
You need to list the target clients you are focusing on. Who will be the final end-users of your product. This way you can easily check that the distributor is right for you. If a distributor doesn’t currently sell to your target markets or industries don’t waste time with them. A critical success is to show them where the low hanging fruits are. Make it easy for them to be successful and sell fast. Therefore, defining this target market is key.
Characteristic 3: Their complementary and competitive product to yours
If you think about your solution, there is an eco-system of complementary products that can be sold along with your product or require the same set of skills to sell. If I take the example of one of our clients that sell respiratory protection equipment, we usually look at distributors that sell foot protection for example. Then depending on the brand they sell, you can quickly see what price positioning they play in. Are they selling cheap commodity product? Or are they able to sell high-end innovative premium price product.
Another good way is to see if you would have an advantage of selling your products to a distributor that already sell products or solution that are competing with yours. It may offer a good alternative to a distributor, wanting to broaden their range. You may have a nice competitive differentiator, which may allow you to get some market share. You may elect to take the opposite option and choose not to work with a distributor which is selling a competitive product. However, it’s interesting for you to benefit from a distributor salesforce that is always used to sell your type of product, they know the clients and they already a nice set of skills.
These three characteristics are a good start to profile your ideal distributor. You may want to download our Tool to get more detail on the ideal distributor profile online or today you can check Chapter 19 of Ready, Tech, Go: The Definitive Guide to Exporting Australian technology to Europe, today on Amazon for $1.99.
See you next week for the Select Episode, my second article in our Success with Distributors series.