How To Work With Distributors

Since the beginning of this downturn, sales training has been bought into sharp focus and has marked the start of many companies fight for survival: with competitors invading all their customary markets with 10% lower prices. This is how one leading manufacturer has reacted. In addition to drastic cost reductions and a reorganisation of the sales force, the business reacted with their sales force development system, a Distributor training program. With this they succeeded in binding their distribution trading partners more closely to their business and reinforced their market position once more.

The system contains the following points

Objectives of distributor training:
Building up trust and motivation in the distributive trade
The training is anticipated to make the distributors work more ingeniously for the supplier. Questioning distributors has shown that the company has chosen the right route towards its proposed objective. All the trained distributors confirmed that their organisational skills had improved. 80% said that training had made them better at planning and selling. 50% were able to polish up their financial know-how.

Increasing turnover
Distributors who have a detailed knowledge of their products and markets will on the whole sell more. Even during the trial phase of the training System, those taking part were already experiencing a 102%. rise in their sales.

Methods and contents of distributor training

Who should be trained?
Not all distribution associates require a specialised training program. The manufacturer selected participants according to the following criteria:

How vast is the possibility that the distribution collaborator will commit fully to the business?

Does the distribution collaborator possess a sufficient financial base to be able to devote the necessary time and appropriate personnel to the training course?

Does the trading partner have a stable organisational structure?

Is the trading partner’s home country economically and politically stable?

Does the trading partner hold out sufficient prospects of growth in their sales, market shares and margins?

What should the contents of training be?
Product knowledge: several managers believe that distributor training should be primarily sales training. The foundation of successful selling remains a solid knowledge of products! No customer will remain loyal to a distributor who has proved himself incompetent in the customer’s eyes!

Selling technique: On this score the manufacturer transmits know-how in the fields of negotiating tactics, concluding techniques and general sales management.

Planning: Products require enormous transport and storage costs. A sensible system of requirement planning [dictated by plant divisions for materials and operating supplies] will help noticeably to reduce costs.

Where should training take place?
Internationally active companies are primarily confronted with this complex question. Centralised training at the firm’s headquarters is advantageous as the highly specialised staff and all the products necessary for demonstration purposes are available there. In addition, the involvement of top management in the training strengthens motivation.

Substantial travel and accommodation expenses that usually have to be assumed by the company are the potential disadvantages. A further problem is that the distribution partners rarely get away from their daily business and only make half-hearted use of training.

The manufacturer follows a twin-track policy here. Two to four-day basic training courses take place at the company headquarters. The distributors spend 60% of the available time on theoretical and 40% on practical instruction. In addition, regional training centres in Brazil, Japan, Australia, Malaysia and Spain, are maintained the company. The subjects of selling technique and planning can be dealt with more intensively.

Who should give training?
An internal staff unit is responsible for increasing training concepts and contents as well as the management of training. External trainers carry out the individual programmes. Trainers with practical sales experience are favored. They are more convincing than pure theoreticians, having a feel for the market and bringing in more ideas. They are constantly deploying new trainers so as to avoid signs of strain.

What methods of training?
Techniques, which stimulate the distributors are used to take an active part: role-playing, video recordings, direct observation. Monotonous ‘cramming’ has proved to be unproductive and is rejected.

A comparison between ‘trained’ and ‘untrained’ distributors allows conclusions to be drawn about the success of training.

Monitoring results
The company continually compares the sales results of trained and untrained distributors using these indicators: revenue per client visit, market share, new products as share of turnover and lost order rate (share of orders that fail to be achieved).

Concrete proposals for the enhancement of training procedures are translated into practice straight away and recognised defects are instantly eliminated so as to guarantee the success of training.

Follow-up training
It is not enough to invite a distribution partner to a training course once and then just to ‘cross him off’. That is why the manufacturer also offers their distributors the self-monitoring and training program Management Minded Supervision (MMS). MMS enables distributors to carry out their own sales training courses for their salespeople and to monitor their own results.

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