Your company may use a partner, channel, distributor or representative (rep). They all may follow slightly different selling structures. But call them what you want. If they are bringing in new profitable clients, then you love them.
I’ve talked with many young, growing firms who manage an international distributor program as a way to quickly expand into new international markets. There is a strong case to be made for this approach. The costs are low – much lower than setting up a local subsidiary, hiring staff, making local connections and managing local compliance and tax regulations. Distributors already have local network connections. They know how to sell into their local market. It can be a great early-stage market entry approach to help rapidly expand your company’s global footprint.
Now that was the Disneyland Version of international partners. For most companies, their distributor outcomes are more mixed with some partners performing beyond expectations, others selling literally nothing, and some requiring high levels of staff support that eat through any profits they may have produced. While I cannot guarantee your success with all partners, here is my advice to improve your partner success rate:
1. Proactively recruit your international representatives.
Once a company signals that they are doing business internationally, foreign agents of many types will want to be your exclusive distributor to their home country or region. But just because a Brazilian agent approaches you does not mean that they are qualified, connected or otherwise the best representation available.
It make take a little more work upfront, but it is definitely worth the time and energy to proactively seek out Brazilian rep options. Then it is just as important to properly vet these potential partners for their reputation, connections, legal standing, etc. As I’m sure you all know from your own experiences, partner turnover is costly.
2. Develop a close relationship with your partners.
This may sound counterintuitive to some. After all, the less time spent with a rep means less support costs. But that’s the Accountant’s Approach to international expansion and a self defeating one at that. Strong channels mean much higher sales potential, which normally outweigh the costs by many fold.
Instead, try to arrange to visit each rep at least once a year in their home market. This will set you apart from the majority of other companies your distributor represents. A rep likely represents a few dozen to a few hundred products. You want to make sure that your products are top of mind when he or she is talking with potential clients.
It also helps greatly if your business relationship with a rep grows in complexity and integration between your companies. If the relationship is basic and remote, then when either side falls on tough times or the first sign of challenges, they will leave the arrangement. It is much better to have reasons to stay and strengthen your channels.
3. Work together to decide on the right in-country messaging and supporting materials.
International representatives have every reason to help you figure out the best way to communicate with local potential buyers. It is not unusual for buying and selling patterns to shift significantly from market to market.
The place to start is with your company’s current marketing assets. What can be used without any alterations? Is there anything that can be easily created by you or your country rep to suit their selling process? It may be something as simple as a localized phone script or a few slides changed in the sales slide deck. Try to keep any localization changes simple at this stage and plan for more involved marketing if your company eventually sets up a foreign subsidiary.
4. Find individual (and group) motivational tools.
As business leaders, we already know that our employees are each motivated by different triggers. Joe, your customer service manager, may want an extra week of vacation time instead of its equivalent cash bonus OR he may prefer a paid executive coach to mentor his career as reward for professional success. Partner-specific motivation is an area of channel management where creativity pays off.
You may have two competing distributors – one in Sydney and the other in Melbourne – who have a cultivated rivalry. Buy an obnoxiously large trophy and offer the trophy plus bragging rights to the distributor who sells the most of your products by the end of the fiscal year.
Your rep may be motivated by title promotion. Honestly, I would call a rep a Chief Selling Officer of Thailand if they doubled their Thai sales this year. It’s relatively easy to change and costs nothing. This may be useful in combination with other incentives.
Sales departments have been using the “President’s Club” motivator for years. Those who exceed quota are invited often with spouses to a luxury trip paid for by the company. There may be some creative version of this concept that could work for high performance channel partners.
Regardless of your approaches to building your international selling team, I hope that you find some of these ideas useful. It’s best to just keep an open mind and an eye towards creative solutions. A strong network of international sales will help propel your company towards greater growth and profitability.
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