The well-known expression “know thyself” is attributed to Socrates, and was written on the forecourt of the Temple of Apollo at Delphi to remind those who entered to engage in self-awareness before trying to gain other knowledge.
And it’s still one of the best pieces of advice we can give to exporters today. Before trying to gain knowledge about by appointing new foreign distributors or other partners in a new market, take some time first to “know thyself.”
Why? Because finding and effectively managing great partners absolutely depends on it.
Companies come to us looking for help finding new foreign distributors. When we ask them what they are looking for in those new distributors, their list of requirements is often very short.
Typically, the response is something like, “We want a distributor who doesn’t carry competitors’ products, has relationships with key customers, and preferably has national coverage, and is hungry for our products – you know a GOOD distributor.”
In our experience, this is a bit like going through a dating service and saying you’re looking for someone with brown hair, a nice smile, and who likes long walks on the beach, and hoping you’ll stumble on your soul mate.
Companies looking for good distributors – partners that are good fits for THEM – need to be a lot more specific about what they’re looking for. They need to “know thyself.” Otherwise, all those unspoken expectations about what they really want come to light after both the supplier and the distributor have committed and start running into mismatches in expectations. This predictably leads to lots of frustration, plummeting sales, and often the end of the relationship.
Many companies have a difficult time articulating all their expectations because they are so immersed in their own corporate and national culture. It often requires external facilitation to tease out all of these unwritten rules, and to help companies view themselves through the eyes of potential distributors in different countries.
A common example: A North American supplier brought on a foreign distributor in the Middle East. They mostly email their distributor, and occasionally call them, typically when there is a problem.
Because of travel and time constraints, they haven’t been to visit the distributor in nearly 2 years, and the last time they did, the supplier stayed only one day. The scheduled business review process often gets pushed out, and has become increasingly adversarial.
The distributor’s perspective? It wanted to develop a relationship with the supplier, but it was difficult for them because their contact changed twice in 3 years. The distributor felt the supplier never really had time for them and wasn’t really interested in the relationship.
Eventually, the distributor lost interest. The supplier became frustrated with the distributor’s sales results, and the supplier’s responsiveness diminished. Sales dropped to a trickle, and both companies were frustrated and disappointed, resulting in a relationship and sales “death spiral.”
Sometimes the frustration arises because the company telegraphs to potential distributors that they aren’t willing to invest. They then attract ones that aren’t interested in investing, either – what channel partner expert Stephen Dent calls “transactional distributors.” But rather than admit that their own approach naturally leads them to these opportunistic partners, these companies often complain their distributors aren’t investing enough. They wonder why their local partners aren’t more strategic.
Many potential disconnects occurs because suppliers can’t articulate their corporate culture. When the supplier cannot honestly describe it, distributors become bewildered by their partner’s layers of decision-making, inconsistencies, corporate politics, and lack of clear escalation and dispute resolution.
These disconnects are often magnified by cultural differences, particularly in confronting and resolving issues. In many cases, companies think they are ready to do business in certain foreign markets, but in actuality do not yet have the skills to be successful in those cultures. If that’s the case, they may have a difficult time finding any distributor that meets their expectations.
To avoid investments in distributors or markets that are bad fits, we take our clients through a carefully guided assessment process that reveals the many unwritten requirements and biases that will directly affect their distributor partners. Through that process, which we call “DNA Mapping,” our clients are able to better articulate their many expectations.
This in turn allows these companies to select the best markets for THEM, the best market entry strategy, and to have very detailed discussions with potential distributors. Through those discussions, expectations are sometimes adjusted, and many distributors who are a bad “fit” fall away.
Companies that want to truly grow their export sales need to find great foreign distributor partners and manage them well. To do that, invest the time and resources upfront to really “know thyself.” You’ll pick better markets and better partners, more clearly define your expectations, and be much happier with your sales results.
To learn more about our partner DNA mapping process or our other services, contact us
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