How to Manage a Distribution Network

Managing a distribution network is always a complex task. It is about motivating sellers, salesmen and other sales team. It is typically conduct for salespeople who work alone and visit distributors personally several times a month. When they visit a distributor, they usually only have time to talk to one or two people (a sales person and a manager for example). Motivating the entire sales force is therefore a real challenge.

Animating a distribution network means first of all making the link between two actors: the brand and the re sellers. This link is assured by the salespersons, themselves managed by sales managers or even regional directors. And inside the distributors we find another hierarchical pyramid with managers who manage sellers who sell them to the end customer. The challenge is therefore to motivate and coordinate the two pyramids: that of the brand and that of the distributor; Knowing that it is the commercial land that, in the end, will make the difference. This is when a customer arrives at a distributor requesting the product of your competitor and the salesman will advise yours rather that you have succeeded your animation.

Incentive has selected for you three points that make the difference in the management of a distribution network.

Distribution Network: Segment it to better Animate it.

Your resources, both human and financial, are not unlimited, which is why it is necessary to allocate its animation budget according to priorities. Several criteria exist to determine which distributors you should favor.

• The importance of the distributor, in terms of turnover or margin. Your resources should be given priority to the most important distributors. For Jerome Blanchon of Overdrive: “Often it is the habit or the prior that push the sales people to visit a customer rather than another, which leads them to miss out on opportunities.” A weekly visit to a distributor that makes 50% of your sales will be far too little while it will be too much if it makes 1% of your sales. Likewise, favor “big” distributors for costly animations such as a commercial challenge. The main thing is to animate and communicate with all your subcontractors.
• Exclusive / non-exclusive distributor. You do not have the same efforts to make with an exclusive distributor as with a partner that sells competing brands. An exclusive distributor will need to be respected; to treat it in “VIP” is the best way to maintain an effective and lasting relationship. For a non-exclusive dealer you will have interest in hitting the spirits, to stand out. This can be by organizing business challenges, or by offering a support service that stands out from your competitors. Also consider having a training service for your re-sellers that is better than your competitors as part of the non-exclusive so that they know better how to sell your products.
• Growth potential. It is obviously necessary to give priority to partners with high growth potential: either newcomers or those who do not use their full capacity, with special support (training, incentives). It is about retaining the best and boosting the means.

Know your Final Distributors and Sellers to Adapt Endowments and Speech.

Salespersons in your distribution network will appreciate if you know them and are aware of their issues. Moreover, from the point of view of performance, it is essential to be able to manage in real time the results of the various agencies, and of the different sellers within them. Incentive gives you detailed statistics of your employees and how they evolve over time to help you make decisions.

The effort your dealers make to distribute you primarily depends in large part on the human relationship you have with them. It is therefore a question of putting of the link in your distribution network.

Animate, Communicate, and do not Manage.

If you give direct orders to the salespersons of your distribution network you run, the risk become little bit more high. For example, when in 2009 the Clairoix site was closed by MAG , a subsidiary of Continental, the 1000 dismissed employees successfully argued in the French courts that they were, in fact, employed by Continental who had to take over Charges the costs of dismissal and reclassification.

Instead, put in place motivation campaigns, training, but avoid anything that is like direct orders to employees of your distributors. For example, enrollment in an animation platform should, in principle, be optional, but in practice absolutely ensure that all employees register on your platform. To do this, put in place a gamification strategy that motivates employees to interact. Show them that they will become better and have a more global view of their network through the platform. In general, your role is to greatly streamline communication between all the links in the chain rather than to manage each level. This is where a gasified platform specializes in animating distribution networks like Incentive will bring you a lot. Indeed if all levels of the hierarchy have access to information and can discuss it among themselves, decisions will move faster and the various stakeholders will be more motivated.

Sometimes branch managers will object to you communicating with their salespersons. Legally these depend on the heads of agencies and not on the supplier. For convince show their free you put at their disposal a management tool and communication modern that will save them time and efficiency. You can also offer group rewards,

So to get the most out of your distribution network, it is above all to distribute its resources on the distributors that will bring you the most and to make fluid communication between the different members of your network.