Action planning between distributors and manufacturers has increasingly become a requirement by manufacturers. Normally, manufacturers drive the process because they are looking for ways to drive higher sales growth from their distributors. While joint planning is often viewed by the distributor as a necessary evil, it can actually be a constructive opportunity for the distributor that understands the process.
Here are five ways to make the process more effective.
Once you understand that joint planning is about driving sales growth, you can then quickly identify the best way for you to coordinate growth activities with the manufacturers. Distributors that are viewed as either "Not Growing" or "Not Growable" are the distributors at risk of losing the lines they represent.
For instance, if a manufacturer has a gap in its product line or the distributor could benefit through a promotional activity, identify the issue as part of the meeting and identify new sales dollars associated with the action.
A more effective approach is to move the meeting venue to the manufacturer. Before you start fretting over the costs associated with travel, rest assured that a well-planned meeting at the manufacturer site can pay serious dividends. When you move the meeting to the manufacturer, not only do you have significant input on the agenda, but you will gain access to higher level decision makers. Normally, senior managers are invited to attend and your issues move to the top of the agenda. It is your opportunity to get commitments from senior management on items your local sales manager could never make.
In advance of the meeting, sit down with your leadership team and discuss the upcoming meeting. As a team, identify the critical issues that would help you to grow faster. List everything you can think of including discounting, more sales and promotional support, but also things such as new products, additional territory and product requirements. Not only should you list the objective, also attempt to associate a sales growth figure with each initiative. And, don’t forget to back out things such as lost customers and large, one-time orders.
Then, prior to the meeting onsite with the manufacturer, send the agenda to those who will be in attendance. Although it may not seem comfortable, set the agenda and meeting with the highest ranking member of the management team that you can.
This credibility is what you will need in the event your local sales manager wants to add distribution or make a change in your territory. With all of the turnover in manufacturers today, it is all the more important to be in regular dialog with the manufacturer’s team.
By proactively engaging the manufacturer in the planning process, you will not only be able to drive a more balanced agenda, but the outcome will tend to be more substantial. Obviously, if you are a less critical distributor to the manufacturer, the manufacturer may be less enthusiastic. But I have yet to meet a manufacturer that isn’t highly interested in distributors that want to grow with them.
Here are five ways to make the process more effective.
1. Understand the manufacturer's reasons for planning
The major reason manufacturers request joint planning is that they want to drive new sales growth. And the reason manufacturers are so enamored with sales growth is that the investment community demands top-line growth from them. If the manufacturers you represent are publicly traded, more than likely, their management team is focused on top-line growth.Once you understand that joint planning is about driving sales growth, you can then quickly identify the best way for you to coordinate growth activities with the manufacturers. Distributors that are viewed as either "Not Growing" or "Not Growable" are the distributors at risk of losing the lines they represent.
2. Understand planning can benefit both parties
Joint planning doesn't have to be a one-way street. The best distributors not only actively participate, but actually bring ideas to the session. This not only makes the planning session more productive, but allows the distributor to actually drive the agenda. Given the assumption that the manufacturer is looking to drive new sales growth through the planning process, the distributor has a great chance to identify growth opportunities tailored to its needs.For instance, if a manufacturer has a gap in its product line or the distributor could benefit through a promotional activity, identify the issue as part of the meeting and identify new sales dollars associated with the action.
3. Move the venue to the manufacturer
Normally, manufacturers begin their joint planning sessions in November and finish in January. Of course, during this time, the manufacturer is very focused on completing its planning sessions and send out field teams to manage the process. The problem, of course, is that your session will more than likely be rushed and it will take place with only the sales representative of the manufacturer at your office.A more effective approach is to move the meeting venue to the manufacturer. Before you start fretting over the costs associated with travel, rest assured that a well-planned meeting at the manufacturer site can pay serious dividends. When you move the meeting to the manufacturer, not only do you have significant input on the agenda, but you will gain access to higher level decision makers. Normally, senior managers are invited to attend and your issues move to the top of the agenda. It is your opportunity to get commitments from senior management on items your local sales manager could never make.
4. Plan for the planning session
An excellent way to make the session useful is to draft a meeting agenda in advance. This helps to set meeting expectations and will help you as the distributor gain a productive outcome. Normally, distributors fail to plan for the session, so very little of the time is spent on the distributor’s issues.In advance of the meeting, sit down with your leadership team and discuss the upcoming meeting. As a team, identify the critical issues that would help you to grow faster. List everything you can think of including discounting, more sales and promotional support, but also things such as new products, additional territory and product requirements. Not only should you list the objective, also attempt to associate a sales growth figure with each initiative. And, don’t forget to back out things such as lost customers and large, one-time orders.
Then, prior to the meeting onsite with the manufacturer, send the agenda to those who will be in attendance. Although it may not seem comfortable, set the agenda and meeting with the highest ranking member of the management team that you can.
5. Follow up with monthly actions & goals
Finally, follow up on the actions agreed during the meeting with a monthly update. This will not only keep the manufacturer on track with its commitments but it will keep you and your team focused on meeting your growth goals. And, keeping the manufacturer apprised of your progress and obstacles to meeting your goals will help you gain immediate credibility with the management team.This credibility is what you will need in the event your local sales manager wants to add distribution or make a change in your territory. With all of the turnover in manufacturers today, it is all the more important to be in regular dialog with the manufacturer’s team.
By proactively engaging the manufacturer in the planning process, you will not only be able to drive a more balanced agenda, but the outcome will tend to be more substantial. Obviously, if you are a less critical distributor to the manufacturer, the manufacturer may be less enthusiastic. But I have yet to meet a manufacturer that isn’t highly interested in distributors that want to grow with them.