Exporting 201 Step 3: Change How You Invest in Partners

Companies that have had some export success selling though distributors often reach a point where their sales growth stalls.  They want consistent double digit export growth, but don’t know how to get there.

This series outlines the key steps needed to truly move your distributor export business to the next level – one where exports are strategic.  In our previous articles, we addressed changing your mindset and the way you find partners.

In this installment, we’ll look another key step in moving your export business to the next level:  change the way you invest in your distributors. 

Beginning exporters generally focus on making transactional sales with their new distributors.  By “transactional,” we mean that the suppliers provide basic product training to their partners.  They give them some marketing materials, and then wait for the distributor to send them orders.

When the orders don’t come as planned, they might call to discuss why the distributor’s 2 dedicated full-time employees or planned new product launches haven’t happened as promised.

These suppliers may grudgingly agree on reduced sales forecasts, but they’ll mostly blame the distributor’s lack of ambition or focus.  They often complain about their distributors’ poor forecasting, rush orders, and endless special requests that create havoc.

Sound familiar?  If so, you most likely have some – or even many — transactional distributors.  With this kind of relationship, the distributor will never really grow the market for your products or services – at least, not the way it could be grown.

What do Exporting 201 companies do differently?  First, they choose their distributors differently.  They choose distributors who are willing to invest, and they send strong signals that they, too, are willing to invest.

How do they do that?  First, by investing in a recruitment process, not just responding to distributors  ad-hoc.  Export 201 recruiting is consistent, professional, and designed entirely from the distributor’s point of view.

Exporting 201 companies also spend a lot of time thinking about how to enable their new partners not only to sell products, but also to how to help them build the supplier’s business.  They do this by carefully designing a distributor onboarding process.

Good onboarding is far more than product training.  It includes a “how-to” guide on how the supplier and distributor will work together – the investments both will make, how issues are resolved, company culture, regular meetings to review a detailed business plan, and the written procedures – and most importantly, all the unwritten rules of how your company operates.

It’s often quite difficult to identify all of these unwritten expectations without outside assistance.  People operating within the company are usually too close to be able to recognize and effectively articulate “how things are done around here” to an outside partner.

An Exporting 201 onboarding process also includes training on all the skills the distributor may need to help build a local market for the supplier’s products or services.  This training may need to be spooled out over a period of months.  Sometimes, the specific training needed only becomes clear with time.

For example, a distributor may need coaching on how to more effectively forecast product orders.  Or perhaps they would benefit from inventory management training.  Maybe they need coaching on how to design better incentive programs, how to more effectively sell products, or assistance with evaluating and implementing IT platforms.  Exporting 201 companies regularly review business plans, stay in touch with new marketing and training materials, and provide other valuable support, such as shadow training, distributor councils, or market research.

In short, there is an extensive transfer of intellectual capital from the supplier to the distributor.

Many Exporting 101 companies argue that they don’t have the time or resources to accomplish this, or that this is simply not their job – it’s the distributor’s.

The reality?  Successful Exporting 201 companies know when you make these investments with the right distributors, they become true partners, both deeply invested in the long-term growth of the business.

And this is when the magic of sustained — and often remarkable — sales growth occurs.

Author’s Note:  a version of this article originally appeared in Global Trade Magazine.