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Five steps to boost your sales with a European distribution network Christelle Damiens explains the importance of establishing a distribution network for small businesses to increase their sales in Europe. For the last 12 years, I have been working with Australian small businesses from high-tech sectors, from medical devices, clean technologies, ICT to electronics and advanced manufacturing. What always struck me was the difficulty for small businesses to generate a significant level of sales from their European distributors. That would often mean a lot of investment in the overseas market to get the distributor on-board and once on-board, sales would be disappointing. During 20 years of sales experience in Europe, I learnt that appointing a distribution network is still the fastest and safest way for small businesses to grow their sales in Europe. They can even scale to multi-million Euros sales. To make it happen for our clients, we have created a five step process:
1. Profile your ideal distributor You first need to reflect on the characteristics of a successful distributor. If you already work with distributors, think about the type of distributors they are. There are different types of distributors, some are catalogue-selling oriented, some are more solution-selling. This leads to defining the profiles of sales representatives that best sell your product. Then look at which clients and end-users your distributor should focus on. This way you can easily check that the distributor is right for you. Lastly, list what complementary and competitive products to yours are these distributors usually selling. This will allow you to verify that the distributor you choose is aligned with your price positioning.
2. Select your shortlist of potential distributors Too often, small Australian businesses skip that selection step. To start with, map-out the distribution landscape based on the profile you just defined. Then check your competitors’ distributors network in the selected target country. Proceed in the same way with companies that have complementary products to yours. You can also check the exhibitors list in major trade shows or interview an opinion leader. When you approach a distributor for the first time, have your company profile and your unique selling proposition ready. At this stage, just clearly state that you are planning to launch your product to the market and would like to have their feedback about it. Warn them that you are going through a selection process. This selection will help you create your shortlist.
3. Engage with potential distributors Once a distributor has shown initial interest, you need to start the engagement process. Have your trading terms ready, a Recommended Retail Price (RRP) and a distributor price list. Know which Incoterms1 you are going to select. Add to your checklist your payment terms. Be ready to push back when you are asked about exclusivity, it’s too risky for a small business. Start your negotiation with the best position for your business. For a new distributor, make them earn better conditions based on their performance. In terms of margin, Europe should not be dramatically different from the margin of Australian distributors. In principle, a margin depends on the role undertaken by the distributor and how they perform.
Once you have more experience with distributors, you can develop a multi-tiered distributor program for them. You can use this program as a nice engagement and activation tool
4. Activate your sales channels in Europe Remember that distributors have other products to sell. A sales representative will always focus on what they know best, their current range. I use the term activation to illustrate how you should support your distributors to help them turn initial leads and sales into large regular volumes. This can be achieved by training your distributors’ salesforce. You will show to them how they can obtain quick wins. These sales trainings will also give you the opportunity to find your champions. Sales tools, like brochures in their own language, case studies and datasheets are the minimum. Then, generating leads for your distributors is really key. A channel partner will come on board when they see that their client asks for your product. I know it’s frustrating, because in an ideal world you would want the distributor to find your clients, that is why you give them a margin. However, the reality is generating sales leads for them can get you where you want to be faster.
5. Manage your distributors Now you have engaged your distributors - they generate sales. Now you need to manage them to make sure they continue to thrive. First, set the scene: formalise the plan in a document with your distributor and set quarterly performance reviews. Make a point to plan a strict schedule of monthly informal updates on how things are going in order for you to detect any issue with rolling out the plan. Then on a quarterly basis, the progress of every element of the plan can be reviewed. Now the beauty of this is that you are in control! You can’t control everything in the field, but you now have a simple way to track how you are going against your own sales targets. It also gives you the visibility on your sales. Christelle Damiens is the owner of Exportia, which provides an outsourced European sales and marketing department for small businesses. She has 20 years of sales experience in the European market. If you want to check if you are ready to export to Europe, take the test : http://diagnostic.exportia.com.au. christelle.damiens@exportia.com.au www.exportia.com.au 1.Incoterms are trade terms published by the International Chamber of Commerce that are commonly used in both international and domestic trade contracts. They are intended primarily to clearly communicate the tasks, costs, and risks associated with the transportation and delivery of goods.
AMT APR/MAY 2019
109