Keeping and Growing your International Distributors: Lightning Bug or Lightning?
- December 3, 2015
- Posted by: Alberto Rodriguez-Baez
- Category: Blog
“The difference between the almost right word and the right word is really a large matter: it’s the difference between the lightning bug and the lightning.” Mark Twain
This is one of my favorite quotes from Mark Twain, especially because it relates to international trade. How? I’m glad you ask. In my experience as an exporter and as a trade consultant, I’ve realized that there are three elements that make “the difference between the lighting bug and the lightning”, the difference between a company keeping or losing its international distributors, the difference between developing strong distribution networks and failing to do so.
These three elements, which I call the Lightning Makers, truly make the difference between developing strong distribution networks and enjoying the benefits of such relationships, and losing distributors and have little or nothing to show for all the effort. The three Lightning Makers are:
Here is the best news: Regardless of its size or resources, any company can implement the Lightning Makers!
Exporters tend to focus on the marketing aspects of recruiting new distributors, specially the promotional elements such as advertising and trade show participation. Most of the focus and energy is on client acquisition, but client retention is an afterthought.
It is much easier and much less expensive to keep and grow international distributors when a company selects the right ones to start with. Unfortunately, I’ve found out that approximately 65% to 75% of companies don’t have a solid selection process to screen and identify the right candidates. A very simple yet effective selection process looks like this:
Choosing distributors without vetting them through a selection process sets up the relationship for a very rocky ride, full of frustration for both parties, poor results from the distributor and, ultimately, a failed commercial relationship. This situation can be avoided by implementing and using a solid selection process for every candidate, every time.
Once a distributor has been selected, it is important, nay vital, to immediately provide its staff the training it will need to understand the product, prepare for launch and gain market share quickly.
Some of the most important aspects distributors need to receive training on are:
– Administrative duties
– Product knowledge
– Installation and maintenance
– Client retention
This training doesn’t need to be complicated. As a matter of fact, exporters probably already have all this knowledge in their minds, scattered throughout their companies and/or their domestic distribution networks. The next step is to collect and organize this information, guidelines, advice, and dos/don’ts into a simple training manual.
If a distributor receives guidance in these areas and doesn’t need to figure it all out on its own, its chances for success are much higher. Offering a strong training program to new distributors can be a source of competitive advantage and a potent recruitment tool.
Few things demoralize international distributors more than feeling abandoned by the exporter. Silence is a morale killer and invites feelings of regret and doubt on the distributor. Distributors (especially new ones) need to hear frequently from the exporter.
Communication with the distributor network doesn’t need to be complicated nor extravagant, but needs to be periodic. A simple solution is to develop a communications schedule. Here is a sample:
– Weekly: Monday morning update email
– Biweekly: Marketing/sales highlight
– Monthly: Phone call
– Quarterly: Newsletter and performance review
– Annually: End of year conference call
– Ad hoc: Personal visits
Distributors will never complain for receiving valuable information and updates. However, they will resent and complain for lack of information and for not hearing from the exporter.
Selling products abroad through international distributors can prove to be a treasure for a company’s growth. It’s critical to not only find these clients, but also to select them well, know how to keep them, and help them grow. The Lightning Makers (Selection, Training and Communication) make a tremendous difference in the distributors’ recruitment, retention and development. They are the difference between the lightning bug and the lightning.
About the Author
Alberto Rodriguez-Baez is a Sr. International Business Consultant at The University of Texas at San Antonio’s International Trade Center (www.texastrade.org), which is part of the South-West Texas Border SBDC Network. The Network serves a 79 county region that includes San Antonio, Austin, El Paso, San Angelo, Corpus Christi, Laredo, Eagle Pass, Alpine, Victoria, and the Rio Grande Valley.