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Need help recruiting distributors…
Question:
I take it that your company is electroflow. There is a lot of competition in the power conditioning market. Frankly, why would a distributor want to pay you $5000 to sell your line, when he can sell a competitors for little or no investment? Our firm looked at your line and is now a distributor for a competitor. Good Luck! — Roy Givler RBC Energy Services
Response:
Your particular market is unknown to me; however, I am not aware of distributors/manufacturer’s representatives being willing to pay to gain training for a product. You have been calling the relationships that you desire "distributors", but they appear to be more along the lines of manufacturer’s reps. It has been my experience that these costs are expected to be absorbed by the manufacturer, as well as the expenses involved in marketing the product (i.e., literature, sometimes the cost of tradeshows, etc.). When other products do not require such expenditures, yours will not be seriously considered. Of course, your mileage may vary. – Hide quoted text — Show quoted text – > Recently, I became Marketing Director for the manufacturer of an Energy > Savings/Power Conditioning device. This device is unique in the whole > world, with no competition. It is used in Industrial, Commercial and > Institutional applications that use 208 Volts up to 345 Kilo-Volt, three > phase electricity. It is a capital expenditure item for these facilities > with the average retail sale in the range of $28,500. > It is the company goal this year to recruit about 35 distributors in the > USA domestic market. Each distributor would receive 2-3 days training from > an electrical engineer and a marketing technician. The training would be > held right at the new distributors office/hometown. A major feature of our > program is that each distributor is given an Exclusive territory. > The up-front cost to the new distributor is only about $5,000. This > includes the Technical, Marketing and Administrative support. > It is realistically expected that each new distributor would earn about > $200,000 their first full year in business. > This is not a franchise arrangement, nor MLM. We anticipate that > successful distributors will be able to hire and train their own sales > staff. > Has anyone else faced this challenge? I do not have a degree in Marketing, > so I am asking for your help. My experience up til now has been in direct > sales. > If you can offer suggestions about how I can recruit new distributors on a > shoe-string budget, please post to the NG or send email to me at: > This is a sincere plea. Your willingness to help and your patience in > reading this is appreciated. > Ray
Lorrell Holtz-Oxley Business Development and Sales Management Strategies a PRI associate http://www.priconsulting.com
Response:
WOW! A sales manager recently assigned a new mission in marketing with a, frankly, refreshing attitude of admitting the need to learn something new. My congrats on realizing that your job, truely, is to get it done, not necessarily, to do it. If your firm agrees to indeminity and hold me and my small organization harmless as too your successful use of any advice, comments, suggestions etc. I might tender, whatsoever, etc. then I would be pleased to provide assistance as time is available. With that understanding let’s begin with responses to your letter. There’s three determinations required of your distributor marketing program at the outset: 1. Who is the customer? (It’s not your distribution) you hire them to provide service to your past, present and future customers, not be them. 2. What are the required customer service levels ? Sales of course, how about training, repairs, inventory, display etc. 3. How is your program going to guarantee market penetration? Competition is good, and is present even if, in the form of a functional equivalent. Look for it. Your initial criteria should be to find channel elements which carry competiting or complimentary products. My research indicates, over the past 30 years, that the program you develop will achieve a high level of effectiveness and efficiency based in large part on your coverage strategy, (exclusive is not a good idea), the amount of economic coercion in your program, and the level of competitive leverage you extract. These will become clear later. First start with learning everything possible about your’s competitors channel program. Margin, Margin Structure, Agreement clauses i.e. price protection, inventory (stocking)program, defective returns, product obsolescence etc. offered your channel by other participants. Leave statements as to number of distributors out of your conversations within the company, since your success as measured by profitability and sales results really doesn’t have to do with the number of distributors. A few distributors "of substance" beats a bunch of coupon clippers. Look for substance not form. Study up on "margin integrity" as affected by supply demand etc. you’ll need to understand it. when it’s time if you want I’ll explain it. Enough for now let me know if I can be of further help. As a channel architect, in 1977 I was challenged with similar responsibilities for the Fluke Corp subsequent to implementation of HP’s consumer program initiated by the HP-35. This is deja vu!! From now on you work for customers. That’s what us Marketing people do. Sales has to do with the needs of the seller, whereas, marketing has to do with the needs of the buyer. Sometimes,internally, a lonely job. Designing & building a distributor program, sometimes called a non-captive marketing channel, has to be done with skill, not loudly. Shoe-string budget is great! Hope this helps, Gary Dynamic Distribution Designs – Hide quoted text — Show quoted text – > Recently, I became Marketing Director for the manufacturer of an Energy > Savings/Power Conditioning device. This device is unique in the whole > world, with no competition. It is used in Industrial, Commercial and > Institutional applications that use 208 Volts up to 345 Kilo-Volt, three > phase electricity. It is a capital expenditure item for these facilities > with the average retail sale in the range of $28,500. > It is the company goal this year to recruit about 35 distributors in the > USA domestic market. Each distributor would receive 2-3 days training from > an electrical engineer and a marketing technician. The training would be > held right at the new distributors office/hometown. A major feature of our > program is that each distributor is given an Exclusive territory. > The up-front cost to the new distributor is only about $5,000. This > includes the Technical, Marketing and Administrative support. > It is realistically expected that each new distributor would earn about > $200,000 their first full year in business. > This is not a franchise arrangement, nor MLM. We anticipate that > successful distributors will be able to hire and train their own sales > staff. > Has anyone else faced this challenge? I do not have a degree in Marketing, > so I am asking for your help. My experience up til now has been in direct > sales. > If you can offer suggestions about how I can recruit new distributors on a > shoe-string budget, please post to the NG or send email to me at: > This is a sincere plea. Your willingness to help and your patience in > reading this is appreciated. > Ray
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Response:
Recently, I became Marketing Director for the manufacturer of an Energy Savings/Power Conditioning device. This device is unique in the whole world, with no competition. It is used in Industrial, Commercial and Institutional applications that use 208 Volts up to 345 Kilo-Volt, three phase electricity. It is a capital expenditure item for these facilities with the average retail sale in the range of $28,500. It is the company goal this year to recruit about 35 distributors in the USA domestic market. Each distributor would receive 2-3 days training from an electrical engineer and a marketing technician. The training would be held right at the new distributors office/hometown. A major feature of our program is that each distributor is given an Exclusive territory. The up-front cost to the new distributor is only about $5,000. This includes the Technical, Marketing and Administrative support. It is realistically expected that each new distributor would earn about $200,000 their first full year in business. This is not a franchise arrangement, nor MLM. We anticipate that successful distributors will be able to hire and train their own sales staff. Has anyone else faced this challenge? I do not have a degree in Marketing, so I am asking for your help. My experience up til now has been in direct sales. If you can offer suggestions about how I can recruit new distributors on a shoe-string budget, please post to the NG or send email to me at: This is a sincere plea. Your willingness to help and your patience in reading this is appreciated. Ray