The Distributor Channel

In case you haven’t noticed, we have been doing a lot of research on the topic of commission-based compensation plans.  During the discussion, topics from Daniel Pink’s Drive, The Surprising Truth about What Motivates Us keeps coming forward.  I recently re-visited parts of the book and wanted to share a few points to further ramp up the discussion of the matter.   The common belief is summarized by Pink this way:  “Rewarding an activity will get you more of it. Punishing an activity will get you less of it.”  This certainly falls in line with the sentiments of distributor managers.  When we asked the question,"Why do you employ commissions with your sales department?" the answer came back to drive both quality and quantity of effort (in that order.)  One-on-one examination of many plans revealed instances where distributors had applied greater rewards for selling select groups of products as well as rewards for selling into poorly performing or inactive accounts. 

Last week I was honored to lead a discussion on fee-based services at the Association for High Technology Distribution ( AHTD.org ). For those of you not familiar with the group, allow me an introduction: AHTD is the trade association for distributors, Automation Solution Providers and manufacturers providing a long list of technical “products” (things like programmable controllers, software, sensors, motion control, machine vision and robotics) into the North American manufacturing segment. It’s a highly technical group and literally all members provide some very expensive products and service bundles. Historically, the members of this group have provided a wide array of both technical and logistical services to their customer base. Most openly admit salespeople are the gatekeepers for these services. Further, management oversight of service deployment ranges from “informal” to “talked about it in a sales meeting last year.” Ironically, even companies with well-developed

Last month one of Frank’s Articles was featured on the front cover of Distribution Center Magazine. They liked it so much they decided to do an interview with Frank. Here are his personal comments: “Videos not only make you look ten pounds heavier, they make you look 100 years older. I guess my chances of becoming a key contributor to Fox News are pretty limited, so I’ll be hanging around the world of knowledge-based distribution for the foreseeable future.” While we had better not comment on the 10 pounds or 100 years, we do feel like many of our readers will enjoy seeing the interview.