Managing & Motivationg Agents and Distributors

Although they are very far from a ‘one size fits all’ solution, the majority of exporting companies still rely heavily on agents and/or distributors to grow and maintain their business in other countries. It’s no accident that so many successful exporters find that the appointment of a suitable agent or distributor is often the most effective means of building their business internationally. Finding and appointing the most suitable candidate is a challenge that, arguably more than any other decision, will determine and exporter’s success or failure in a market.

As a business grows internationally, effective managers learn for themselves what key features they will need in an effective representative. Every market is different of course, and a strategy that works in one country may not be appropriate somewhere else. But effective agents and distributors will usually have common characteristics. When I look for a representative in a new market, I am usually looking for someone who has a strong first-hand knowledge of our sector and ideally a track record with comparable (non-competitive) products. Their financial standing is important as is a suitable sales force for the size of the market.

One of the most important factors for me is that a potential distributor (I don’t use agents, purely because of the nature of our products) is proactive. I can’t be looking over his shoulder all the time, and even if I could I wouldn’t want to, so I need to be sure that the distributor is going to use effort and initiative to grow the market. There may be some sectors where a distributor can just acquire the stock and wait for the orders to come in, but I’ve never experienced that. We can do a lot to help the distributor, but at the end of the day it’s his market and his efforts, or lack of them, will determine our success.

An energetic new distributor can bring its own problems, however. The late Sir John Harvey Jones, who presented the TV series ‘Trouble Shooter’ once said that the enthusiasm and energy of employees could be a company’s greatest asset but also its greatest liability. This is even more true of agents and distributors who are not only remote from the exporting company, but are not on the pay roll and the most enthusiastic ones are often the most difficult to manage.

The key to managing and motivating agents and distributors is communication. As in sales, that involves talking and listening, and it’s a key task of an export manager to keep the lines of communication flowing. Every relationship with an agent or distributor is different. Some will be calling/emailing/Skyping on an almost daily basis, others will make much less contact of their own initiative. An export manager needs to get to know the individuals, how they work, and recognise any danger signs early.

It’s common practice to ask for regular reports from a distributor. My approach is to keep these simple and frequent. A monthly ‘report’ of just a few bullet points is usually enough to keep up to date on crucial matters. In my view, this requirement needs to be reciprocated. The job of a distributor can often be a thankless one, especially in the early days, and a good manager has a responsibility to maintain their enthusiasm as well as offering guidance and ideas. Everyone enjoys a bit of gossip as well, of the harmless variety, so I like to keep in touch with trivial news about my family, colleagues and other distributors, as well as sharing comments about sport and the weather. I try to make a point of sharing successes with other distributors, especially for novice distributors.

Modern technology has made communication so much easier and cheaper, but there is still an important requirement for an export manager to meet regularly with distributors. Face to face meetings are invariably so much more productive than a telephone call. I can visit the distributor’s premises and get an immediate impression of the state of the business. Discussions are so much easier when they feel unhurried and many people are less ‘guarded’ when they are not on the end of a telephone line or somewhere in hyperspace.

I have found that a very effective way to motivate distributors is to encourage them to talk to each other. The sharing of ideas, successes and disappointments, as well as gripes and worries is so much more effective and leads to any number of unexpected new ideas. The important thing is to be a part of the flow of communication and use the information to recognise problems and opportunities early, and then to act on them promptly.

Here are some golden rules I try to live by in relation to my distributors:

 

  •   Take the initiative with communications
  • Always be approachable and available
  • Reply to communications promptly and positively
  • Address potential problems and concerns directly but constructively
  • Share ideas and successes
  • Take care to communicate important changes such as new products
  •  Set a timetable for regular visits and don’t allow it to slip

 

Written on 5th September 2013 by Tim Hiscock, S&H LLP Associate

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