December 23, 2024
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Distributors — being the intermediaries between manufacturers and retailers — significantly influence your sales and revenue numbers. This makes efficient distributor management operations a non-negotiable for mutually profitable growth.
But this is not without its challenges. From operational inefficiencies and data silos to fragmented communications, the complexities of managing a distributed network can get overwhelming.
Let’s start with how we can maximize the potential of your distributor network by leveraging a combination of digital tools, long-term strategic planning, and relationship-building.
Maintaining an open line of communication not only helps you keep them updated about your product and processes but also ensures that they align with your company’s goals and targets.
To start with, here are some questions to address when setting up your communications strategy:
Whether it’s letting distributors know the status of an order or settling claims — these routine tasks are not just time-consuming but also easy to overlook. The solution? Implementing a real-time notifications system that automatically informs distributors about key updates.
Some distributor management solutions (like Botree DMS) even allow you to set up custom email or SMS notifications to keep distributors informed in real time — reducing delays and misunderstandings.
Keep distributors informed using custom email and SMS notifications in Botree DMS
There are two approaches that you can consider:
As your product range expands and the number of monthly updates increases, it becomes all the more imperative to have an efficient and timely communication strategy.
💡Pro tip: Share your marketing and sales collateral alongside your updates so distributors have the resources they need to promote your products effectively.
Depending on the size of your distributor network, you can consider one of these approaches for ad-hoc communications:
Apart from network size, distributor preferences can also influence your choice of communication channels. For example, non-tech-savvy distributors might prefer phone calls over help desks.
While the above methods are great for most ad-hoc conversations, crisis communication requires a more decisive and multi-pronged approach. Some things you can do are:
Finally, maintain detailed records of all conversations so you can identify recurring issues and inform future strategies.
If you’re looking for efficiency gains, then distributor management software can go a long way in automating and streamlining your operations. This includes:
The results? Reduced administrative overhead, data-driven decision-making, and most importantly, better distributor satisfaction.
💡Pro tip: Set up automated workflows for approval processes using advanced software solutions like Botree DMS. This can help you reduce processing times and standardize your processes. Plus, you can maintain detailed audit trails.
Streamline distributor and outlet approvals with automated workflows in Botree DMS
Operations are only one-half of the picture. Equally important is fostering a long-term partnership with distributors — a connection that’s built on shared goals and mutual trust.
Here are some ways you can do this:
One event idea is to conduct field visits — like the Amul Yatra Program. By taking distributors and channel partners on factory tours, they provide firsthand insights into their operations, product manufacturing processes, and quality standards. This is a great way to involve distributors and inspire loyalty.
Building strong, long-term partnerships with distributors starts with a clear understanding of individual responsibilities so you prevent misunderstandings down the line. To start with, consider:
💡Pro tip: Use a tool like BotreeDMS to centralize all data like distributor claim statuses, scheme availability, and inventory levels. This can help both you and your distributors keep track of everything from one place and make informed decisions.
This is another aspect where distributor management systems can greatly benefit you — starting with a centralized database with all your product and dealer information up to monitoring stock values and levels.
You also get access to features like “Lock Sales by Shelf Life” (to restrict the sales of products nearing their expiry date) and “Liquidation Schemes” (to strategically boost sales by creating a schemes only for the inventory that has a shorter shelf life remaining) that help you manage existing stock and prevent potential loss.
Here are some features to look out for in your distribution management platform:
Automated billing management is a great way to speed up order fulfillment — leading to faster order processing times, which in turn can improve inventory turnover and reduce holding costs.
Here are some ways you can automate billing and improve order fulfillment:
In the previous section, we saw how you can streamline operations on your side. Now, let’s look at how you can help your distributors perform better and reach their revenue goals.
By providing distributors with access to relevant data, you can empower them to make informed decisions and improve their performance. A distributor performance dashboard can give them insight into their:
This helps distributors to focus on high-performing products and markets, leading to increased sales and revenue. Moreover, by analyzing trends in buyer behavior and seasonal patterns, they can optimize their inventory management — ensuring stock availability and reducing stockouts.
Put simply, an incentive is anything that motivates someone to ‘perform an action’. By offering different levels of rewards for different levels of performance, you can motivate distributors to perform better.
A popular example is Tupperware which has a three-month reward program to encourage new sellers. Similarly, you can reward distributors for reaching significant milestones, such as one-year or five-year anniversaries.
Another option is rewarding distributors based on their performance. For this, you can set sales targets and reward distributors who meet or exceed them.
Similarly, you can also help distributors incentivize their buyers ( retailers) by implementing a point-based loyalty program that rewards buyers based on factors like order value or quantity.
💡Pro tip: Use a tool like BotreeDMS to centralize all data like distributor claim statuses, scheme availability, and inventory levels. This can help both you and your distributors keep track of everything from one place and make informed decisions.
Another factor that influences distributor performance is your RTM strategy. Here’s how you can perfect your routes:
Nestle even implemented Botree MyDMS to help their sub-distributors digitize their operations. According to the Nestle team,
“Using Botree MyDMS Sub-distributors now benefit from automated order processing, better stocking decisions, and the ability to respond swiftly to retailer needs. This technology enabled Nestle to create a powerful rural distribution network, enhancing efficiency and market penetration.”
By investing in your distributors’ success, you not only strengthen your relationship with them but also empower them to achieve their sales goals. But what type of support can you offer?
There are two approaches that you can take. The first is a deeply collaborative approach. It involves a high level of direct engagement with high-performing distributors wherein you provide personalized mentorship and support.
Managers at companies like P&G, for example, are said to partner closely with their distributors to plan joint sales targets, replenishing frequencies, and more.
However, while effective, it may not be scalable for a large number of distributors. Here’s where the second approach comes in — giving distributors the resources they need to do the work by themselves.
Put simply, these are incentives that distributors can use to sell your product to retailers. This can be:
Depending on the capabilities of your DMS, you can create a variety of schemes for different product categories or regions to help distributors sell better. And the best part, as scheme management is mostly automated, it’s easy to scale, regardless of the size of your distributor network.
Launch hierarchical product schemes with multiple slabs in Botree DMS
One-to-many training programs are a cost-effective way to educate distributors at scale. Particularly as they’re flexible and can be conducted both online and in person. Some options for training programs include onsite, regional workshops, educational webinars, and self-paced courses.
When you invest significant time and resources into refining your distributor management strategies, it’s all the more important to assess the impact of your efforts.
In this section, we’ll explore how to measure both distributor performance and the effectiveness of your overall distributor management strategy.
The first step is figuring out how you’ll evaluate a distributor’s performance. The simplest way to do this is using some key performance indicators (KPIs). This can be sales growth, stock turnover rates, order accuracy, claim settlement times, and distributor satisfaction.
We also recommend providing distributors access to relevant data through customized dashboards so they can track their KPIs — and take ownership of their business.
For a more qualitative (and personalized) analysis of distributor performance, you can conduct periodic 1:1 check-ins. This way, you can pinpoint areas where a distributor may be falling short, plus verify if they’re adhering to their contractual obligations.
Some key areas to audit are sales performance, inventory management, customer service, and compliance with financial and legal regulations. This is a great way to analyze your operational efficiency and identify potential risks, such as fraud, theft, or unauthorized sales.
💡Pro tip: Consider employing mystery shoppers to better evaluate your distributors’ performance. These individuals pose as regular customers to evaluate various aspects of the distributor’s operation such as customer service, product knowledge, and more. This is particularly useful for assessing distributors who may be underperforming for a prolonged period.
Feedback is a two-way street. Not only should you provide feedback to distributors on their performance, but you should also actively seek their input on how you can better support their efforts.
Some ways you can gather feedback are:
Once you’ve gathered feedback, look for recurring themes and patterns, determine their priority levels, and create your action plan. Finally, communicate these changes to your distributors and get their feedback, once again.
That way, you create a feedback loop and continuously improve your distributor management practices.
Effective distribution management is essential for maximizing the potential of your business and achieving long-term success. The benefits — improved inventory management, increased revenue growth, and finally, stronger distributor relationships.
Implementing a tool like Botree DMS can give you full control of all aspects of your distribution management ops, from centralizing data and managing inventory to identifying opportunity gaps — so you can perfect your distribution strategies and improve operational efficiency.
With Botree DMS, you can:
And so much more.
