Growing,Your,Business,When,Exi marketing Growing Your Business When Your Existing Resellers Won't Coo
Awhile ago, I got an email from one of the "gurus" I follow and it shocked me. The gist of it was this person wanted to trade services for a household item.To say it floored me would be an understatement.What was worse was a few days later t Automation technologies represent a fundamental aspect of any modern industry. The major types of industrial automation solutions, such as DCS, PLC, SCADA, and MES, are used on a large-scale in process and discrete industries.DCS technologie
John Henderson, President/CEO of Frank Lynn& Associates, Inc., has encountered numerous companies facing thefollowing quandary: how to grow sales by adding new sales channelswithout alienating existing resellers and risking the current revenuethey generate. Many companies take the easy way out--they avoid aconfrontation and attempt to fix the existing resellers.Smart Business asked Henderson to discuss how manufacturers and service providers should address this problem.What is wrong with trying to "fix" existing resellers to drive new growth?Tryingto fix existing resellers is an option. But if you look at your marketdynamics, you will likely find that your end customers' needs and theirbuying behaviors have changed, and new channel players have emerged tomeet their needs. Sticking with a reseller that no longer satisfiesyour customers is not a recipe for growth. It is very hard for areseller to recognize this shift in customer requirements until it istoo late.Can managers take action to help their resellers recognize that changes are occurring?Yes,but only with a subset of your resellers. Many are independently ownedand represent either a first-generation owner who believes he or she istoo old to invest and take risks, or a second-generation owner whodoesn't understand the business and/or is reluctant to change. But mostcompanies have a mix of resellers and some can deliver the desiredgrowth. We have a process to classify resellers based on their abilityto grow. The categories are:> Self-growing> Growable> Non-growableWhat are key characteristics of self-growing and growable resellers?Self-growingresellers have a business plan that defines how to grow their business.These resellers often are run by entrepreneurs with growth goals thatalign with the supplier's goals.Growable resellers have the desire to grow and are willing to invest, but may need assistance from the supplier to succeed.Ifyou ask the right questions, you can effectively and accuratelycategorize your resellers. We use a diagnostic tool for that purpose.How should a company's sales force work with these three types of resellers?Whilemembers of the sales team may believe they need to spend time withnongrowables due to poor performance, by definition, it is highlyunlikely they will change to help you achieve your growth goals.Thesales force also should limit its time with the self-growingresellers--they will continue to make their contribution and you willgo along for the ride.The best return on your sales efforts will come from focusing on the growable dealers.If a company does decide to replace a poor performer, how does it minimize the risk?Severalcritical steps need to be taken including an assessment of your legalrisks in terminating existing relationships. But the most importantplace to start is by assessing customer needs. This will help definethe reseller characteristics.The risk can be measured as well.Ask the customer this question: "If your existing reseller no longerprovided you with our product, would you buy the product the reselleroffers, or would you switch resellers to have access to our product?"The answer provides great insight to the risk exposure.
Growing,Your,Business,When,Exi