Posts tagged cooperate

One of the most common sales challenges that companies face is how to overcome the reluctance or inability of some resellers to grow and the resultant “drag” they create on the company’s plan to increase revenues.

John Henderson, President/CEO of Frank Lynn & Associates, Inc. , has encountered numerous companies facing the following quandary: how to grow sales by adding new sales channels without alienating existing resellers and risking the current revenue they generate. Many companies take the easy way out–they avoid a confrontation and attempt to fix the existing resellers.

Smart Business asked Henderson to discuss how manufacturers and service providers should address this problem. What is wrong with trying to “fix” existing resellers to drive new growth?

Trying to fix existing resellers is an option. But if you look at your market dynamics, you will likely find that your end customers’ needs and their buying behaviors have changed, and new channel players have emerged to meet their needs. Sticking with a reseller that no longer satisfies your customers is not a recipe for growth. It is very hard for a reseller to recognize this shift in customer requirements until it is too late. Can managers take action to help their resellers recognize that changes are occurring?

Yes, but only with a subset of your resellers. Many are independently owned and represent either a first-generation owner who believes he or she is too old to invest and take risks, or a second-generation owner who doesn’t understand the business and/or is reluctant to change. But most companies have a mix of resellers and some can deliver the desired growth. We have a process to classify resellers based on their ability to grow. The categories are: