Companies that have had some export success selling though distributors often reach a point where their sales growth flattens or stalls. They wish their exports were a strategic part of their business, with predictable double digit growth quarter after quarter, but they aren’t sure how to get there.
This series outlines the key steps needed to truly move your distributor export business to the next level. But warning: this is not an easy process, and requires some investments that may take a little time to pay back, as well as a bit of faith. Take comfort that many companies have made this shift, and have never looked back.
In this installment, we examine another step that Exporting 201 take to move their export business to the next level: enhance your processes.
Most Exporting 101 companies experiment with different approaches to see what works. They find their distributors from trade show contacts, internet inquiries, or government agency introductions. They end up in markets because new distributors take them there. They choose their business models based on what their distributor or other local partner tells them makes sense. They experiment with pricing, rush orders, credit terms, and whether or not to grant exclusivity.
All of this may make sense when a company starts exporting or is just testing the export waters, and Exporting 101 companies learn a lot along this journey.
What most companies find, though, is that this leaves them with a legacy of ad hoc decisions. They can’t explain how or why certain distributors were appointed. Distributor training is cobbled together, and delivered inconsistently. They meet with distributors as time and schedule permits, and business reviews happen sporadically.
Not every in the organization pulls together, because there are conflicting priorities and gaps in role clarity. People relay on institutional knowledge to get things done, and it’s often a challenge for new people to get up to speed. Distributors often find Exporting 101 companies hard to deal with, because there’s little predictability on how to get things done or how to get issues resolved.
To make the jump to Exporting 201, companies need to make the decision that they will not be all things to all distributors. They standardize their processes, carefully focusing on the things that maximize their sales and empower their best distributors. They map their processes, identifying roles and timelines. You can download a free sample here of one way to map those out.
They have clear, consistent processes for entering new markets, recruiting and vetting new partners, for training distributors, for providing marketing materials and translations, for special orders, pricing, and returns, business plan reviews, and many other key aspects of their export business. They document these processes, and train new team members on them. They also train their distributors to help them to work more effectively.
And, just as importantly, they measure key aspects of these processes. They review what works and what doesn’t. They evaluate how much various steps cost, whether there is a good return on these steps, and regularly re-assess how to eliminate or reduce costs and improve overall returns.
They know, for example, how much it costs to support their direct salesforce vs. their indirect sales channels. They are clear about which functions their distributors perform, and what a reasonable margin is for those activities. They can point to the precise metrics that characterize their best distributors, and to those driving their own business excellence, such as on-time delivery, order fulfillment, and support and service satisfaction.
To make the move to Exporting 201 and catapult your export sales, take time to formalize your processes. Standardize them, memorialize them, and train regularly on them.
Original article reproduced with kind permission of Doris Nagel from Globalocity