Final word: Luke Chapman

Final Word from Business Performance Group's Luke Chapman.

0

In the UK we saw a dramatically different start to the year than usual for the whole channel. For the first time the ‘first week peak’ did not materialise and so far I’ve seen little evidence of recovery as I write in March.

If we are to successfully address the challenges of the current hostile economic environment we have to wake up and recognise that we need to alter the ‘top down’ approach that dominates the marketing strategies in our channel. We must recognise that customer spend profiles are changing and usage requirements have altered dramatically – we are now required to deliver a much wider range of goods and this trend will continue to increase. We need to ensure that we are able to anticipate and influence the trends within our markets.

Having worked closely with dealers of all sizes, I continue to be surprised and frustrated at the extent of ‘top down’ strategies and policies that their supplier trading partners seek to impose on them. In general, dealers are at the end of the supply chain, the final frontier with the end-user. They are usually smaller businesses than their suppliers, namely the national wholesalers or manufacturing groups.

Dealers are often led by skilled and motivated salespeople, but maturing companies are rarely large enough to generate the sort of creative tensions that can challenge established practices and traditional strategies and systems. Generally, however, they are good at staying close to their customers – usually a few that dominate their sales. 

Dealers are uniquely sensitive to their customers’ needs. This sensitivity is far too often under-exploited by suppliers that frequently provide mediocre marketing programmes that are insensitive to end-user needs and desires; they simply miss the point! In addition, dealers are often offered business support schemes that fail to respect their value, not to mention their ability to administer the deal. Brand owners in particular are often very poor at justifying themselves, with the result that many so-called ‘white label’ or ‘own brand’ equivalents can thrive and undermine margins for all.

Of course, getting the best out of the dealer/supplier relationship needs to involve some leadership from bigger organisations with their better exposure to the best marketing and business technologies. But the relationship must be two way if it is to benefit all parties; the dealer knows the customer and any supplier would do well to tap into that knowledge and understanding so that product development and marketing propositions are always relevant to the ultimate customer’s needs.

It is in the interests of all suppliers to recognise that to get the best out of their relationships with dealers they need to listen, to provide support and training and to make sure that everything they offer is relevant to the customer and understood by the dealer as well as practical and profitable for all concerned. A way forward would be for brand owners to collaborate with dealers in the development of product and marketing strategies. Active research amongst dealer-nominated customers, sharing the feedback, would not only improve products and strategies but would also serve to create greater ownership of the brand on the part of the dealer.

Dealers need help to implement viable programmes using the best techniques and technologies to develop an intimate knowledge of their customers’ requirements. When this has been achieved, suppliers can ensure that they can understand the information that is coming from the bottom up so that they can shape their support programmes and marketing strategies accordingly. 

Teamwork is the way forward. If we are going to survive and thrive we must focus on the customer, and their needs and wants must be understood throughout the supply chain – and it starts with the dealer.