Selling through distributors benefits manufacturers by adding scale, reach, and specialization to their sales efforts. Manufacturers can focus on innovation, engineering, and product quality while relying on their distributors to take those products to market. Often manufacturers will assist with sales and marketing efforts, including joint promotional activities, customized incentive programs, and shared sales leads for the distributor to act upon.
Along with these benefits come unique challenges. Distributors are independent companies that can sell many different products from different companies, which means continuous engagement and training are necessary to ensure that the products remain a top priority. Since no individual company manages the entire lead-to-revenue process, information gaps are pervasive, and missing out on revenue from delayed or absent follow-up on sales leads is a real possibility. The various systems and workflows in place between the manufacturer and their distributors further complicate the situation.

MAXIMIZING YOUR DISTRIBUTOR NETWORK

The lack of information and visibility is a real problem for manufacturers. Understanding distributor sales performance is difficult and insight into follow-up rates and response time on shared sales leads is virtually impossible to get. Creating and updating an integrated view of sales opportunities to understand actual-to-plan performance across distributors becomes a herculean task, requiring many spreadsheets and even more hours of work. The end result is still questionable, as it does not reflect a real-time view of what is going on and how opportunities are progressing. With no real understanding of the results of the lead generation spend and how it is impacting the sales pipeline, measuring return on investment in this marketing spend is virtually impossible.
To address these challenges and to get the most out of both existing and new distributor relationships, the following five steps must be taken:

1.  SIMPLIFY THE FEEDBACK
Continuing to blindly provide sales leads to distributors, with no understanding or indication of their value to them, wastes money and frustrates everyone. Implement an easy and dependable way to let distributors provide feedback on the leads they are receiving—including quality and value. This can be done via an automated system that shares and tracks the lead, as well as capturing feedback for reporting and analysis by the manufacturer.

2.  USE TECHNOLOGY TO YOUR ADVANTAGE
Technology is best used to enable a defined and optimized process, so start with the process, but make it a reality with technology. Enable fast and easy feedback from distributors from where and how they work. This means picking a solution that works with smartphones, tablets, and computers, ensuring that the end user experience is familiar and easy to understand. At LeadMethod, we leveraged familiarity with spreadsheets and email in our product design, making user usage frequent and adoption rapid.

3.  PRIORITIZE YOUR LEADS
Not all leads are the same, and sometimes they are not leads at all. Having a defined and agreed to set of qualification criteria creates a shared understanding between manufacturer and distributor. To take it a step further, create a prioritized listing of leads for distributor action. This will ensure that rather than just a list of leads by date generated, the distributor will know which leads require immediate attention and which leads present the highest probability of conversion.

4.  AUTOMATE LEAD MANAGEMENT
Rather than just collect leads and send them as a spreadsheet attached to an email, automate the distribution of leads to improve tracking and follow-up. For example, at LeadMethod, we use email to share new leads, as that is a known and familiar way to receive information, but we also link to a web page that contains all of the relevant information as well. That web page is part of the broader system, so all information updates and actions take place in one place as opposed to various spreadsheets, documents, or in boxes.

5.  MAKE DATA DRIVEN DECISIONS
The benefit of unifying all of the collection, sharing, and tracking in one system is the ability to make decisions based on real data. The quality of leads is tracked over time-based on actual distributor feedback, making trends and historical performance is known. Lead-to-opportunity rates are also known and tracked to provide more informed reporting and to allow the best-performing programs to receive more investment when marketing budget decisions are made. This “closed loop” view is only possible because a single system is managing the lead-to-revenue process across all distributors.

CONCLUSION
Getting the maximum performance from distributors requires a unified, system-based approach. By following the five steps above, you can increase communication and collaboration with distributors, which will increase revenue and amplify the benefits of a distributor-based sales model. ◆

About the Author:
Justin Johnson is an author and regular contributor to publications and thought leadership groups on the use of technology to improve profitability for manufacturers and their distributors. Currently, Johnson is co-founder and CEO of LeadMethod, Inc., a software company that has developed the world’s first distributor relationship management (DRM) software platform. He can be reached at jjohnson@leadmethod.com or 800.406.5020.
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MODERN PUMPING TODAY, June 2016
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