“We feel our distributors are just cherry picking and not really pushing our products to customers as they also sell other products which are easier to sell.  How do we motivate them to give due attention to our products?”   - Dolores, Makati City
 
 
Selling your products through a distributor who also sells other products can be very challenging especially when your products do not move as fast as the others.  There is always the issue of focus or attention. Salesmen would naturally want to maximize their selling time and energy by focusing only on product items or stock keeping units (SKUs) that are easier to sell. You need to have something to constantly influence them to push your products in every customer call. What do you do?
 
The following are actual examples of motivation techniques being used by many suppliers who share the same issue with you.  
 
Margin and credit term.  You need to know how much the other suppliers of your distributor extend as discount (or distribution fees) and their credit terms. Oftentimes, when a product sells more volume, the distribution margin is lower and credit term shorter. This is the high- volume-low-margin model. I assume you are in the low volume side as far as your distributor is concerned. If your financials allow, try to offer higher distribution fees and longer credit terms. Use this as an argument to leverage for attention to push your products. I highly recommend you show comparative analysis of contribution margins (i.e. sales minus all variable costs) to prove your point.  For example, you can point out that for, say, every four units they sell of other products they only need to sell one unit of yours to earn the same contribution margin. Most distributors prefer profit over volume.
 
Sales incentive program. Develop with your distributor an attractive sales incentive scheme based on performance. The mechanics of this program will depend on what you intend to achieve. For example, if you just want volume, the incentive will be based on attainment of monthly or quarterly volume objectives. The incentive must be for incremental sales performance.  If you, however, want other variables like numeric distribution, visibility of your products, speed of execution, etc . . . you may include them as part of the performance parameters. You may also, if budget allows, include the distributor owner and operations manager in the incentive scheme.
 
Performance recognition program. Most companies have this program that awards distributors and their salesmen during annual conferences (either national or regional conferences). Just be sure you have a clear and realistic performance scorecard that is not open to too much subjectivity. Be quantitative as possible in measuring a criterion and you have reliable sources of information where to base your computation. Usually, winners receive trophies, trip incentive, cash, and the venerable hand shake cum photo with the Chairman and CEO during the event. If you want to fuel more excitement and competitiveness amongst them, try to post the performance ranking of the distributors in your monthly bulletin, newsletter, and e-mails for everyone to see the monthly and cumulative results. If you are the distributor, you may not want to see your company’s name at the bottom of the list every month, would you?
 
Sales Training. Another way to motivate the distributor’s salesmen to push your products is to provide them with proper product orientation and sales techniques on how to effectively sell them.  Do this, at least, twice a year or more often if you are selling a very technical product.
 
Distributor Specialist or Manager.  The quality of people you deploy to engage with your distributors matters a lot in developing better relationship with them. Take stock of the competency levels of your current team. Do they have what it takes to develop a more strategic alliance with your distributor partners? Or do they just visit them to get sales orders and collect? If you have to reduce operating cost, please, not on this one. Get the right people to deal with your distributor partners.


 
Emilio “Bong” Macasaet III is Partner and Chief Distribution Strategist of Mansmith and Fielders, Inc. (www.mansmith.net), the leading marketing and sales training company in the Philippines. Please also send your marketing, sales and strategy questions to mentors@mansmith.net.