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LEARN HOW TO SET GOALS FOR YOUR DISTRIBUTOR

Part of the job of developing export sales is first setting up objectives for your distributors, learn here how to smartly define precise objectives for them.

Do you know what YOU want?

Before setting goals for others, you need to know what yours are. Then you will align your distributors’ goals to yours, to help you reach the target. That is why knowing exactly what you want is important.

Do you want to push a specific product? Do you want to have more margin? Do you more market shares? Do you want to focus only on one type of customers or do you want to reach them all?

Setting up a strategy is like sailing a boat, you have the captain (you) and a lot of sailors (your distributors). Some of the people are sailing according to the direction of the wind, some others sail in the direction they want but the most successful ones have a specific geographical destination in mind, a very precise GPS coordinate to reach.

So – before you assign goals to your dealers to raise anchor and set sail – make sure you know where you want to go.

In that area, your company must provide you with a clear vision of its strategy. If nobody gave you a mission and a map, how do you know which harbor to reach?

SMART Method

The SMART method is a good method of management in setting goals. It is an acronym covering all the basic aspects that a goal requires. The first use of the SMART approach was in the November 1981 issue of Management Review by George T. Doran.

SMART stands for:

  • Specific: be as precise as possible. “Being leader, being number one”: that is not specific at all; it is not a definite goal. Be surgically precise on what. On how.
  • Measurable: link the goal to numbers. How much do you want to sell?
  • Achievable: you need ambition… and also to be pragmatic here
  • Realistic: is the market ready? Is my distributor the right one?
  • Time-based: when? How fast?

Is the market ready?

Sometimes you can set a goal, but the market is not ready yet. You might have a strategy based upon a different market culture or structure. It might be possible that you want to set up a strategy that is 2 steps ahead of the market. Do not hesitate to readjust the goals if you see that your plan does not take off.

Reach a consensus

If you want your distributor to reach the goals you are setting up, you need to bring him on board. Reaching a consensus together is truly important. If you are the only one to think those goals are relevant you will need two times more energy to push the distributor to do what you asked. If he is convinced you have done half of the work.

To convince him you could ask him to set his own goals for the year and then revise them for him. If you have a specific goal for one product he is not convinced about you can start with a small batch to sell, then ask for his feedback and show the successes of the other dealers with the same product.

Make sure he is convinced and that he did not agree just to please you. My recommendation is to write down yearly goals as an annex in the contract. If the distributor succeeds he can obtain a bonus, if he is not you have leverage to break the contract if the situation goes south in the upcoming years.

Pic: Anastasia Petrova_Unsplash.com

2 replies on “LEARN HOW TO SET GOALS FOR YOUR DISTRIBUTOR”

Hi Nicolas, thank you very much for taking time off your busy schedule to do up this website, it is very informative. I have been in the export business for more than 8 years. Looking through your website refresh myself with the important fundamental information that I tend to forgot when i am stuck with all the daily tasks. Really appreciate it.

I have some questions which I hope you are able to enlighten me.
I know getting sales information and information regarding our distributors’ customers base is important, but how do you deal with it when your distributors are not readily to share these information with you? Or worst, they tell you their company don’t have that kind of internal system to generate sales reports?

I know it kinda hard to believe, but I do have distributors telling me
1. They don’t have system to generate sales reports and none of their suppliers / principals request from them (i am shocked!)
2. Their management do not allow them to share information like their inventory / stock-holding reports to their suppliers / principals

How do you deal with these kind of reply?

Really appreciate if you can share with me your advices / thoughts.

Once again, thank you very much!

Dear Stella,

Thank you very much for reaching out and asking interesting questions.
Indeed, with the daily tasks piling up we tend to forget the basics. Or even worse, to improve ourselves as export managers.

I do believe you and it is much more common than you think! Distributors do not want to share this information with you. Most of them are afraid that you will use their database to sell directly to end-users or to give it to another distributor if you decide to change them later on.
Gaining access to sales reports – or at least some sales data – is hard. Building trust is one of the key factors in succeeding. The more they trust you, the more they will share information. Be prepared: it will be hard and it will take time. Despite the fact that you need them for your sales, do not forget that they need you too and they make profits out of your products: do not hesitate to be a little firm.

Here are some ways that I can think of, to have access to these sales reports/or to some data:

1. Increase your sales prices until they start providing you with some information. It works only if your products are highly demanded by the end-users and if your distributor is afraid to lose your products. Money is a powerful tool in favor of principals and against distributors (even though I prefer healthy relationships based on trust).
2. Spend more time with the local sales team. I used to spend 1 or 2 days more during trips with local salesmen to visit customers with them, to understand better who they sell to and educate them on my products/sales techniques at the same time.
3. Ask specific questions. Search who are the best 5 customers in the market and ask your distributor what they have supplied to these 5 key accounts (not all in the same conversation). Compile the data little by little.
4. Give incentives to your distributor if they share information. If they provide information, you could finance one of their marketing actions or ads for example.
5. Educate them / Provide a solution. In some markets, they just don’t use CRMs. They might want to share the information but they haven’t took time to improve themselves as a company. If that’s the case, educate them: search for various free of charge IT solutions that could drive sales for them and help you get detailed reports.
6. Hire a product specialist in your distributor’s team: suggest to give to the distributor a better margin or a percentage on sales if the distributor is dedicating a product specialist for your brand in their staff: to follow sales, aftersales and to train local salesmen. Treat him/her as one of your colleagues, invite him/her to visit your factory. Secure the time they should spend working for you in a contract with your distributor. In the long run, you’ll have someone in the company sharing valuable inside information on sales.
7. Same as above, but with an external local employee that your company employs directly.
8. Hire an external consulting firm to call end-users and key accounts as well as other distributors in the market. They’ll provide a report for you.

I hope that helps!

Thank you for your comment, this is a hobby blog with the purpose to share knowledge on international sales and I haven’t been consistent lately as I am growing my own company now. Nonetheless, seeing comments like yours keeps me motivated to keep this blog alive!

Have a wonderful day, Stella.
Best regards,

Nicolas

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