Selling Through Distributors
Many companies are battling for survival in the light of the current economic downturn with competitors invading all their traditional markets with prices 10% lower. The importance of sales training has come to the fore and this is how one principle manufacturer has reacted. Alongside cost reductions they have reorganised the sales force and introduced a development system for the sales team, which is specifically a training program for their distributors. With this they have succeeded in reinforcing their market position once more and in binding their distribution trading partners more closely to the company.
The system contains the following points
Objectives of distributor training: Building up trust and motivation in the distributive trade The training is intended to make the distributors work more efficiently for the supplier. Questioning distributors has shown that the company has chosen the right route to its intended goal. All the trained distributors stated 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.
Raising turnover Distributors who have a precise knowledge of their products and markets will also sell more. Those distributors partaking in the trial phase of System, increased their sales by 102%.
Methods and contents of distributor training
Who should be trained? Not all distribution partners are amenable and suited to a training program. The manufacturer selected participants according to the following criteria:
How great is the likelihood that the distribution partner will commit themselves fully to the company?
Does the distribution partner possess a sufficient financial base to be able to invest the necessary time and the appropriate personnel in 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: Many managers believe that distributor training should above all be sales training. They forget that a strong awareness of goods is and remains the basis to successful selling! If a distributor proves himself incompetent in the customer's eyes he cannot expect loyalty!
Selling technique: On this score the manufacturer transmits know-how in the fields of negotiating tactics, concluding techniques and general sales management.
Planning: Storage and transport costs for products are enormous. A sensible system of requirement planning [dictated by plant divisions for materials and operating supplies] will help to reduce costs here markedly. Where should training take place? This is a very complex question primarily confronting internationally active companies. Centralised training at the firm's headquarters has the advantage that highly-specialised staff and all the products necessary for demonstration purposes are available there. Also if top management participate in the training this strengthens motivation.
Opposed to that as disadvantages are the substantial travel and accommodation expenses that usually have to be assumed by the company. An extra problem is that the distribution partners only make half-hearted use of the training as they infrequently get away from their everyday job.
The producer follows a double-track policy here. At the company head offices basic training courses take place lasting two to four days. 60% of the distributors' available time is spent on theoretical teaching and 40% on the practical. Besides that, the company maintains regional training centres in Brazil, Japan, Australia, Malaysia and Spain, where the subjects of selling technique and planning are dealt with more intensively.
Who should give training? An internal staff unit is responsible for developing training concepts and contents as well as the management of training. The individual programs are carried out by external trainers. Trainers with practical sales experience are preferred. They are more convincing than pure theoreticians, have a feel for the market and bring in more ideas. To stop the signs of strain new trainers are repeatedly being utilized.
What methods of training? Methods are employed which stimulate the distributors to assume an active role: role-playing, video recordings, direct observation. What has proved to be inefficient and so has been rejected is boring 'cramming’.
A comparison between 'trained' and 'untrained' distributors allows conclusions as to the success of training.
Monitoring results The company continually compares the sales results of trained and untrained distributors using the indicators: turnover per customer visit, market share, new products as share of turnover and lost order rate (share of orders that fail to be achieved).
To guarantee the success of training recognised defects are eliminated immediately and concrete proposals for improving training procedures are put into practice straight away.
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 offer 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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