By Jason Bader, The Distribution Team
I recently interviewed the CEO of a distribution based co-operative group. He is a longtime veteran of the distribution industry and has spent the last 20 years working to improve the relationship between his member distributors and their preferred suppliers. We discussed how to improve this relationship and how effective management of expectations plays a major role. If two sides want to work together for mutual benefit, the interactions need to be intentional. Unfortunately for too many distributors, mutual prosperity is based more on chance interaction versus an intentional thought-out plan. No one plans to fail — but some companies fall short of their potential because they fail to plan.
Over my years in distribution, I have seen the full spectrum of planning from the random ride along to multi-day strategy sessions with tangible goals and predetermined events. In my early years, I would describe my market planning as something akin to pinball. I would get flipped into a point gathering section of the game, while other times I would go straight down the middle without hitting a thing. Success was slightly better than random.
When talking about planning, I ask clients if they want to be a sailboat or a powerboat. A sailboat is pushed forward by the wind of the economy. Many distributors plan their revenue goals based on the strength of future economic conditions. A powerboat can be propelled forward regardless of the conditions surrounding them. No wind, no problem. Market planning, with key suppliers, can turn any organization into a powerboat.
Choose Your Partners
Market planning can be learned by limiting the number of partners. Going through the process and adjusting along the way builds a template to add more partners in the coming years. Choose your partner by the end of the third quarter. Don’t make the mistake of choosing your largest supplier. Look for the supplier with the most potential. Who’s hungry to grow share with you? These choices will yield the greatest return on effort.
The Strategy Session
Once you have chosen your partners, the real fun begins. Invite your supplier for a strategic planning session. Decision-makers should be present on both sides and tangible goals and resource commitments should be nailed down by the end of the meeting. Make sure to come out of this meeting with realistic goals. Set clear expectations about what role each person will play in the plan’s success. It is very common for financial incentives to be discussed if certain revenue goals are achieved. The biggest outcome of this session is a commitment by both sides to be intentional about mutual prosperity.
One of the most important tools in this strategy session is a calendar. To prosper together, you must spend time together. Great plans have failed because of a lack of accountability. Take the time to plan so there is a far greater chance that the plan will be executed. Top-notch planners can look at their calendar any day during the year and know what activities are happening. Is there a training session at a branch? Is one of the salespeople supposed to be making calls with the manufacturer? Do we have a certain product category on promotion? The more you embrace the calendar, the easier the plan becomes.
Before you leave this session, don’t forget to make provisions for quarterly check-in. Ask yourself: Do they need to be adjusted? Is there new information to be considered? Learn to course correct. This check-in also provides an opportunity to ask yourself if you have remained accountable. Is my house in order? Are my people embracing this initiative? Either side of the relationship can drop the ball. Rather than point fingers, find alignment.
What are we going to do together to achieve mutual prosperity? The answers are only constrained by time and budget. I have seen great monthly focus programs. Each month, or 60 days, the distributor pours all its energy into a specific product category. When lined out properly, with proper internal training, market awareness can flourish. I have seen concrete houses sell ladders and plumbing houses sell safety products. Intention and focus drive market opportunities.
One overlooked opportunity is promotional periods with advanced media buys. In most cases, the marketing departments of your suppliers have already committed to publications and media outlets. If the end user is going to be exposed to the brand through these channels, dovetail activities to maximize exposure.
There is a myriad of traditional joint marketing activities, such as sales calls, training, and customer events. Undoubtedly the market has seen several unconventional promotions with varying degrees of success. In my experience, they all have one thing in common: they require two to tango. Joint marketing activities provide the opportunity to collaborate on a successful outcome. Successful outcomes create long term relationships.
Take a few moments to evaluate your market planning ability. If you can say that you haven’t given this process much thought, don’t beat yourself up. Most distributors are successful despite themselves. How much more successful could you be if your daily actions were part of a bigger plan? I challenge you to be intentional with your success. Don’t wait for the economic wind to move you forward. Put your marketing muscle on the throttle and be the powerboat. If you need help getting started, I am always here.
About the Author:
Jason Bader is the principal of The Distribution Team. He is a holistic distribution advisor who is passionate about helping business owners solve challenges, generate wealth and achieve personal goals. He can be found speaking at several industry events throughout the year, providing executive coaching services to private clients and letting his thoughts be known in an industry publication or two. He recently launched his first podcast, Distribution Talk. He can be reached at (503) 282-2333 or via email at email@example.com.