Why Brand introductions FAIL in Channels Marketing

It took a long time for me to understand that there are some common denominators in why some fantastic brands fail while other, inferior products, are successful in channels marketing programs. Below you will find six key points to think about. Think of these six as cylinders in a car. If five of them are working but not six you’ve lost all forward momentum.

“Faulty execution of a winning combination has lost many a game on the very brink of victory. In such cases a player sees the winning idea, plays the winning sacrifice and then inverts the order of his fellow-up moves or misses the really clinching point of his combination.” – Fred Reinfeld , The Complete Chess Course

So, in my view, there are six core elements to any brand introduction in the eyes of distributors:

1. Marketing Materials – Are catalogs, price lists, flyers, trade show schedules, advertising schedules, lead processing all provided in a timely fashion? Does the vendor send in 25 catalogs for a sales meeting with a salesforce of 5 people and a customer base of 250? What is the package quantity of literature? Does the literature have a part number? Is there a literature request form? Who is that sent to? Are the marketing materials “intuitive”? (are all of the components needed to complete and order listed in the catalog? Is the catalog easy to use and find all related products? What about videos? Social media sites? Brand exposure?

2. Quality of Product – Does the product have “walk away reliability” or does it suffer from a myriad of quality issues. This goes beyond the product working as it was marketed to work and includes horseshoe nail problems (no torx screws in the box, partial shipment of all components. Is the distributor going to spend all the money that would have been made on the margin servicing the customer and trying NOT to get “egg on their face” in the process which will affect other product lines and the relationship with the customer?

3. Competitive Pricing – Does the product provide a good ratio of price to performance? Is the vendor adaptable and responsive to price corrections in a short time frame? Has the vendor provided all of the necessary sales information to “sell” the value added?

4. Availability – Is there stock? If so on what products? Many times distributors have heard on new product introductions that “there is plenty of inventory” only to find out that “Well, we have three pieces of everything”. If there is a stock out problem, is the vendor proactively responsive contacting the distributor on late deliveries before the distributor calls to expedite?

5. Customer Support – Is the field support and customer support team trained and up-to-speed on all of the products? Can they technically support the product line? Can they crossover competitive information? Do the support people say “I don’t know the answer to that” and end the conversation with “Are your happy with my your level of service today?” or do they say “I don’t know the answer let me find out and call you back in 10 minutes”. Are they responsive? Are they proactive? What is the SOP on quote turnaround ( 2 hours, 24 hours, 2 weeks)?
Customer service can take on many variations. I’ve listed a few for you to ponder.

The Customer Service Problem
I once spent 6 months trying to figure out why we weren’t getting more orders. The end-users loved it, the outside sales people loved it, the owners of the distributors loved it… then I found out that the inside sales person at the distributor HATED dealing with the manufacturer’s inside sales person who had a really poor attitude.

The Gun Shy Problem
Then there is the “gun shy” problem. The regional sales manager or agent has some “other” issue, typically some internal political issue with a POLICY of the manufacturer that is so out of the norm that the distributor can’t even grasp it. Want an example? At the end of a quarter every call made for an trial application is responded with “I’m not sure if that’s a good test” Even in cases where the promo video has almost the exact application featured! Finally, after much prompting you find out why:
“The accountants are really tightening up on trial applications/test tools”
“My boss is really riding me on any testing right now”
“I’ve gone over my trunk stock budget”

The New COST CENTER Problem
Sometimes, as companies grow they hire very well versed accounting and legal people. This can wreak havoc at the sales generation end of the business. In most cases, it’s good business, stuff the company should have been doing all along, but in others, it’s policies and procedures that, in my very humble opinion, (in deference to my need to keep accountants, lawyers and op’s people happy 😉 just create roadblocks to doing business. That being said, I was sent this video a couple years back by a very astute owner of a manufacturer.

The Young Gun Problem
I recently had a conversation with a “young gun” He called me after a week of us talking about a competitive opportunity and explained that he had not been in contact with me on my question because he was too busy handling all of the business at his BIGGEST distributor in another market. He had lost all of the notes from our conversation which I had not written down myself. He further explained that he had some health issues with his father with some medical testing. I explained that I fully understood, but I did not have time to talk about it at the moment as I was just walking into my Grandmother’s hospital room

6. Trust – Is there trust in the relationship? This is the “gut feeling” stuff. It comes out in the one-on-one conversations. Is something being held back? Are direct answers given? Is the manufacturer asking lots of questions as if he where going to handle the business directly or take it through a competing distributor? Is the manufacturer “throwing his weight around” and not really acknowledging that the distributor runs their own business? Does the agent or manufacturer call the end-user directly….and not tell the distributor or independent rep? Do they visit the end-user on their own?

The most successful brands are built on a foundation of trust and loyalty. Each party knows where the other stands. You can actually watch the relationships grow. In the early phases it may be that the distributor or the agent calls up the manufacturer and asks for something… The reprimanding parent response is “You know we can’t do that! We can do xxxx.” To which the smiling reply is “I know, but I had to ask.” Later, as the relationship evolves, when the distributor or agent calls up they say “Hey, we just promised this program and that promo with this product, I know I need you to approve it but I already quoted it while you where on vacation” and the response “Great Job, what else ya need?”

Perhaps, more than any other item on the list, this last one IS THE MOST IMPORTANT.

The “Agent” or “Regional Manager”
An agent or territory salesperson has a relationship with his customer: The distributor channel. It’s where they live, It’s where they put food on their table. Most of the smart independent agent, and even the factory guys, realize that the relationship is the most important aspect of their livelihood. Management comes and goes, manufacturers change gears, different managers come on-board with their own ideas and their own relationships, but the one consistent thing is the customers and that trust.

The Distributor
Distributors are even more protective of their turf. They have their territory marked and that is how they perceive it. When a distributor brings someone into their customer it is akin to bringing your first date to meet your parents. You are coming into their home, you are being extended the relationship that they enjoy. When anyone tells them “That’s MY customer” they are pretty offended and, like a dog, they’ll probably come back and bite you.

Brands are sold ONE person, ONE customer at a time until they tell two friends and so on, and so on, and so on, until it’s viral.

As a final thought, I’m reminded of a picture from the 1970’s that hung in the VP of Student Life’s office back when I was Student Senate President. It showed a picture of a HUGE Sit-In protest over some student issues. The caption read:

“Communication is the beginning of Understanding”

Good words to live by in your channels branding efforts

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