Why Distributors Should Be Treated Like Customers

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We consult companies in insurance, automotive or other manufacturers that sell through a dealer/distributor agent or any third party. These companies all struggle with the same question as a result of their business model: who is the Customer, the dealer or the end user?

The reality is, both of them are.

The Distributor Dynamic

Distributors (or Dealers) introduce an interesting dynamic to a business model. They are essentially an outside entity that controls the results for the suppliers. Distributors provide a wider audience of prospects for a supplier’s product or service, giving suppliers the chance for more sales. The challenge is how does the supplier ‘control’ the experience the distributor gives to their Customer?

On one hand, the answer is simple. If you don’t like what they are doing, go direct to the Customer and cut out the distributor, not normally a favored path. The second answer is to tie the Customer Experience (CX) and the Customer Experience Metrics into the distributor agreement. For example, BMW dictates to their dealers the color of the carpet and many other details. Consider McDonald’s or any other franchise. They state what the experience should look like and then they measure it through mystery shoppers.

However, most distributor deals were struck years ago before the CX became a business imperative. As such, they now need to change.

How to Manage Your Dealer Relationships Better

So how does a supplier manage the business when they have a distributor? Gallup Business Journal published an article last month discussing whether suppliers should treat their distributors like employees or Customers. Gallup explains distributors might appear to be because they sell your products, but distributors also have expectations just like Customers do that need to be met to keep the relationship strong.

The article explains suppliers would be wise to treat them like both Customers and employees, with the strongest relationships deriving from perceived partnerships between supplier and distributor.

While I agree with Gallup’s assessment with the problem of distributors, I disagree on the semantics a little in the conclusion. You would be better served to treat EVERYONE like a Customer, distributor, end user and employees.

Treating Everyone Like a Customer

The implication by Gallup’s summary is the relationship between a supplier and a Customer is different than a relationship between a supplier and their employees. In my opinion, this scenario should not be the case. Treating everyone the same way you would a Customer, meaning a regard for how they feel about the experience, creates a culture facilitating success for the delivery of the Customer Experience to the actual Customers.

I would add this issue isn’t isolated to businesses using a distributor or dealer network. If any organization, regardless of whether they are Business to Business, Business to Customer or some combination of both, they should treat everyone as their Customer.

Taking it even further, I would argue the internal operation philosophy benefits from treating their team members as they would Customer. What I mean by that is a department, say Human Resources, treats the employees as they would a Customer, etc., with the same mindfulness to how the employee feels about the experience or interaction.

Why? If you treated everyone as your Customer, it gives you the best opportunity for success. If everyone used the concepts in their daily interactions outlined in theCustomer Experience Statement that defines the Experience the organization wants to deliver, it would create the right culture. Everyone would head in the same direction toward improving and delivering the Customer Experience consistently.

When this standard is the natural default for everyone, it embeds in the culture. For those of you that have implemented a Customer Experience program, you know how critical this cultural perception is for affecting real change.

What do you think? Should we treat everyone like Customers? I’d be interested to hear your opinion in the comments below.

Republished with author's permission from original post.

Colin Shaw
Colin is an original pioneer of Customer Experience. LinkedIn has recognized Colin as one of the ‘World's Top 150 Business Influencers’ Colin is an official LinkedIn "Top Voice", with over 280,000 followers & 80,000 subscribed to his newsletter 'Why Customers Buy'. Colin's consulting company Beyond Philosophy, was recognized by the Financial Times as ‘one of the leading consultancies’. Colin is the co-host of the highly successful Intuitive Customer podcast, which is rated in the top 2% of podcasts.

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