Going From Transactional Joint Planning Purgatory to Channel Strategy Nirvana

Recently, manufacturers have been resurrecting the strategies they developed two to three years ago. However, some elements of those strategies included how they actually evaluated distributor partnerships – even though they may not have worked closely or communicated as well as they could have with their distributors in the past.

So, we’re advising them to slow down.

What was appropriate then may no longer be appropriate for your business today, post-pandemic. Because so much has changed, some strategies should change too.

Modern Joint Planning

Instead of having the same relationship with distributors as they always have, manufacturers should move into ‘modern joint planning’ with distributors. This creates a new forum for both manufacturers and distributors to bring new ideas, data, and learning forward.

Through modern joint planning, they can compare what has occurred over the past two to three years and develop new modern strategies moving forward.

What does modern joint planning look like for distributors?

Sharing Information

You need more than just the operational elements when going into meetings with distributors or manufacturers. In those kinds of meetings, you’d typically talk about what you sold last year, what you predict to sell this year, what rebate terms are good, any terms and conditions, and return good authorizations.

It’s a very transactional conversation and leads to a solely transactional relationship.

To solve this, you need to bring in customer elements as distributors and manufacturers.

As a distributor, you have customer information you can contribute. You might not share point-of-sale (POS) with them, but there are things that would be beneficial for your manufacturer to know. For example, you could discuss the top markets and the top 10 customers that make up a significant percent of the business.

You can also mention new products you have and how to increase the share. These are all things that can help you and the manufacturer to be on the same page.

Manufacturers have lots of data. There are customers visiting their website and downloading product specifications. You can bring information on website traffic, what they’re looking for, what the top products are that you sell across the U.S., or mention what you don’t sell in this market.

We haven’t seen much of these interactions in the relationship before, so bringing information from each party is a great opportunity to move forward. If you’re looking for success, we would suggest giving it a try.

Distributors will have some of the transactional customer information. Manufacturers are starting to collect more data about engagement of customers, potential across the buying journey, and across their brand. They’re investing in new tools regarding configuration, quotes, and pricing.

All of these could help make the experience at a distributor level more seamless. You’ll also have more success in your ability to partner, and in your goals for your end customers.

The Winning Combination

Manufacturers have visits from end customers to get information. If you can route that to your distributors or representatives who can take immediate action on that visit and close the order, that’s nirvana for you as a manufacturer.

As a distributor, if you can find manufacturers to work with you in this way, it will be an incredible investment for you. It will enable a seamless transaction in the way customers purchase, too. The customer can see a product on the supplier’s website and order it immediately through the manufacturer.

You’ll notice that it sounds similar to the way Amazon works. Your end customers may want a similar method to be able to quickly view and buy your products. So, if you have a set-up that makes their experience easier, you’ll be much more successful.

That’s a winning combination for both parties, but unfortunately, very few people are doing that today. Imagine the potential you could have when combining the strengths that both of you can bring to the table.

Why do it alone when you can create a profitable relationship that will take you both much further?

Conclusion

These are only a few insightful recommendations that both distributors and manufacturers could bring to the table in the form of modern joint selling. There is much more you can do to help form that partnership.

To both parties moving into next year, consider what your strategies are going to be. Consider doing modern joint planning and bring new ideas to your manufacturer or distributor.

There are more ideas out there that you can pursue as well. But moving into this year’s market – when there’s slowing demand – creates an ideal time to strengthen partnerships with one another and steal market share from your competition.

So, start today. Reevaluate and restructure your old strategy. If it involves keeping too many of your old ideas, throw it out. Move away from transactional relationships and toward partnerships that will bring you closer to your goals.

At the end of the day, working jointly with the other party will get you further.

Thoughts? Questions?

As always, feel free to reach out to talk in greater depth about these and other issues impacting your business.