The Distributor Channel

Last week we covered the topic of managing opportunities. I made this comment: “Strangely, many “experts” advise sellers to ignore the competition. I believe the competition plays a major role in planning your strategy and understanding your situation.” Some of you took note of this comment and requested more information. It’s impossible to ignore the competition. Like the forces of market supply, recessions, economic recovery and upticks in energy prices, competitors influence your business environment. Extending further, competition varies from market to market and even territories within the market. While not paying attention to competition sounds high minded, noble and customer-centric, it won’t help you make more money. Competition is specific and local Except for Amazon, your competition is manifested in the form of a specific person or team of people. They need not live in your community, but they are assigned to one of your accounts, which makes them local to

Progressive distributors have learned the importance of tracking and following opportunities in their sales group. For those of you who aren’t following this practice, here is a quick overview of how it works. When sellers learn of a potential for a sale, they log the following data: • The customer - Besides the actual account, it’s best if you log the customer contact who told him about the opportunity. • The product/technology involved – Sometimes it’s hard to identify the exact catalog number of bill of materials, but understanding approximately what the customer may need is required to call this a real opportunity. • The potential size of the opportunity – How many parts will be purchased, how many dollars will the customer spend or what does the current budget for the project look like are all questions which would allow an order of magnitude estimate of the size. For OEMs, we recommend understanding the size of the opportunity per year. For example, $1,000 per machine a

It happens with distributors everywhere. For some reason you don’t have a great relationship with one of the manufacturer’s reps assigned to your company. The reasons for this are many. Let’s dig into the big three: The rep is responsible for lines which are competitive to your company’s key suppliers. Many distributors fear working with reps who are tied to competitive products lines. The reasoning is simple, introduce them to our best customer and the next day, they will return to the customer with a demo of a different brand product. Further, if they know more about “your” customer, proposed solutions become more focused and effective. When the product they sell are an important part of your value proposition, it’s easy for them to offer something similar but better or cheaper or both. The rep is closely aligned with a competitive distributor. When the rep has close ties to a competitive distributor, it raises a number of trust issues. Will important information be