Export Distribution & Sales Channels

Building the Relationship Within the First 90 Days

 

“If you want to go fast, go alone. If you want to go far, go together.” African proverb.

Photo by Daniil Silantev, Unsplash

 

It’s often said that the choice of local representative is the single most important decision in exporting success. But finding the right connection is just the start. It’s vitally important that the exporter takes the initiative in the venture and takes time to lead, guide and manage their representative.

 

The choice of representative is crucial of course and needs to be taken with care. Above all, an exporter needs to appreciate that every market is different, and what works in one place may not work in another, no matter how similar they might seem. Deciding on the kind of representative required, and whether to have one at all, should only be made after careful research and an appropriate strategy is agreed. Because sales people usually have targets to meet, there’s always a temptation to rush a decision. That temptation should always be resisted.

It’s my opinion that every plan for a new market should begin with a completely blank sheet of paper. However successful a business might have been in one place, here they are nobody. And nothing that has worked in other places will necessarily work here. A blank page and an open mind are what you need.

Take time to understand the market. Talk to everyone, be they potential customers, end users, competitors, market experts and potential agents or distributors. But listen more than you talk. You know your products, you know what customers like about them, you know what they do and what makes them special. But that’s all.

When you are ready to work with a representative, you will be sure that it’s a logical decision for this place, because you will have gained your own understanding. If you plan to appoint a distributor it’s because you know that working through a distributor is the best model for this market. You’re not doing it just because it worked in other markets. And you know what you need from a distributor to make the venture work.

When negotiating an agreement with a potential representative, don’t be in a hurry to commit. Ask the prospect about the plans and expect some detail. They may be wary of giving away too much, and that’s something to respect. But you need to be confident you’re making a good choice. Talk about what else they have done and are doing. Do they have the resources to succeed? Are they willing to put the time and energy in? Are they really committed to the venture?

Confirm agreements in writing but keep them specific. A good way to start the journey is with a Heads of Agreement. This is a specific and limited agreement to work together for a specific purpose, rather than an open-ended contract. It’s a chance for both parties to prove their reliability and should specify agreed actions and anticipated outcomes.

The first 90 days of the relationship will be crucial. Some exporters fail to be sufficiently proactive in this period. Managing overseas representatives is one of the toughest jobs in any kind of management. We are working with people who are not on our payroll, and who are a long way away. They have other products, other activities and it’s our task to guide and motivate them to deliver.

In this early period, the exporter should be very present. This needn’t mean being physically present, although spending time with the representative in the early stages is crucial. It also means, in the nicest way, being on their back. Keep the contact positive, enthuse about their achievements and plans, never let them forget about you. Keep a close watch on agreed milestones and deadlines. Contact them ahead of key dates and ask them how it’s going, is there anything they need? Tell them about successes and challenges elsewhere. Find out about your representative, what kind of people they are, what they do outside of work. If they support a football team, follow the team’s progress. Send him a message of congratulation when they do well. Develop a positive and friendly relationship wherever you can, but one in which it’s clear that the achievement of the initial milestones is really important to you personally.

Building effective distribution channels is largely about building relationships of trust. Underline how important they are to you by offering to go the extra mile sometimes. The way you work together in the first 90 days is likely to determine the future success of the venture.

Article written by Tim Hiscock - Export Development & International Trade Advisor at Strong & Herd LLP

Strong and Herd have introduced a brand-new training course for exporters who are seeking to find new distributors or agents. Full details of the course are available here.

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