Have you tried to call the office of some of your suppliers
lately? A few weeks ago we were asked to do a mini-research project for a
major distributor. We phoned the local sales offices of their major suppliers.
We got all varieties of automated voicemails systems and forwards to other
offices. What we didn’t get were real live people answering the phone. When
we left detailed messages (we were following up on real problems), we typically
got calls back three, four or a week and a half later. This doesn’t bode well
for supporting the front line sales efforts of distributors.
In some industries it’s getting darn difficult to keep track
of the players. Downsizing, right sizing, whatever you call it – distributors
are reporting major changes in the sales teams who support their efforts. If
the manufacturer had 5 guys in an office serving the market, today there are
three people working out of their houses. Suddenly distributors discovered
their old guy was gone (or had twice the territory).
This affected the combined sales efforts. Loss of continuity
within the territory meant everything had to be explained… again. Customer
connections were lost. History of applications – all gone.
Here are a few of the effects:
- Product quality issues were handled by the distributor –
if at all. - Expediting connections were lost.
- Special pricing agreements were offered to the wrong
distributor. - Field planning sessions were more difficult to
facilitate. - Vendor led training went away.
- In some instances, vendor sales people fouled distributor/customer
relationships by promoting direct sales opportunities at customers. This
happens mostly because they were worried about their own job security or
commission levels.
For the most part, distributors were asked to pick up more
of the slack. As the recession ends, distributors who know exactly how to
explain their value to supply partners will prosper. To do this right,
distributors need to understand exactly how to communicate this in a
non-threatening and scientific way.
Frank – This is an old problem but just very much accelerated within the new dynamics of the market. I founded the largest distributor in Europe, the third largest in the world – and still have connections into the distribution – so i guess I know what you are talking about.
The owners and managers running a distributor, with extremely rare exceptions, are old, the prototype of inflexible, and averse of any change. They just sit and hope the “good old days” come back. They don’t. New distributors will take the butter from their bread before they even realize it.
You describe the problem in a perfect way – they lose the connections and have no clue what is going on. John Chambers is fighting since 2 years that the channel need to embrace social media. But what is the channel doing? Nothing – zero – nada – just sit, wait and bitch and moan about the economy.
Do more with less is a market dynamic since building harbors in Egypt 2,000 B.C. Distributors are no exception.
Now here is what a distributor needs to do:
1) Get a hold of all their current contacts and create relations in the social web. If any connection moves, they know within 24 hours. There is no way that who ever moves is telling the WORLD that they just did.
2) Do the same with their resellers as this is an identical problem – always was.
3) Build a social bond with the vendors that go beyond the margin conversation, logistics issues or channel conflicts.
4) Build a social bond with the channel partners, VARs, dealers, brokers, agents, whatever we call them and understand what is on top of their minds. This will lock partners more than 2% additional discount.
I’m rolling out a new partner program for our partners that is almost entirely social media based. Not all vendors are that far – but a distributor can’t say “It’s the vendors fault if my business sucks”.
Axel
http://xeesm.com/AxelS
(my social map)
Axel
I think you are right. Social networking has moved from a cool gimmick for college kids to a workable tool for business. Recessions tend to accelerate trends. This one is no different. Folks who had no idea what social media was all about started thrashing around on places like http://www.linkedin.com as soon as they found themselves without a job. It’s too bad in some ways, but great in others.
The past 18 months has been megacorp musical chairs. When clients ask me how I manage to keep track of so many people on the supplier side of distribution, I smile and say, “Well it’s my job”. One critical tool for me is social networking. By the time we come out of the recession, we will find a whole bunch of people who learned it. To those who do not learn it – beware.