Empowering channel partners to drive sales growth in 2020 Part 4: Earning loyalty of channel partners

Your channel partners sell for you and earn through margins. You run a high-margin scheme once in a while to push sales during a slump. While it gives your sales a temporary boost, it negatively affects your bottom line. Sounds like a familiar situation, doesn’t it?
What if there was a way to drive your sales for a longer period of time without over-shooting the sales promotion budget?
Just take a moment and think about how loyal your channel partners are to you. Do they swear by your products or do they easily get swayed by the margins offered by competitor companies?
The FMCG distribution scenario in India hasn’t changed much over the years. While there has been some growth of Modern Trade and E-commerce, close to 90% of the retail is still dominated by General Trade- the mom & pop outlets. Products go from the brands’ manufacturing facilities to their distribution center, on to the C&F agencies. From there, the products are sold to distributors and wholesalers and then finally to the retailers. The distributors and retailers become the contact point between your products and the end consumer. They have the power to influence how consumers feel about your brand.
Let’s take an example of any FMCG product, say, for example, a baby bathing soap. You are the manufacturer of ‘Brand N’ of baby soap. There is a ‘Brand J’ which has been the market for the longest and has the highest market share, thus a much higher brand recall. Now consider the following scenarios, assuming that the retailer has stocked both the brands of baby soap.

Scenario 1

Customer: Please give me Brand J of baby soap.
Retailer: Hands over Brand J

Scenario 2

Customer: Please give me a baby soap.
Retailer: Hands over Brand N

Scenario 3

Customer: Please give me Brand J of baby soap.
Retailer: Hands over Brand N. Why don’t you try this?
Customer: But I always use Brand J, it suits my baby.
Retailer: This one is made of natural ingredients, completely safe for the baby.
Customer: Its priced higher, not in my budget.
Retailer: The price justifies the quality. You only want the best for your baby, don’t you? The demand for this brand has increased a lot and all my customers are extremely satisfied with it. Do try it once!
Customer: Ok, sounds good. I’ll try it!
Now, in scenario 1 is your regular retailer. He’s getting around the same margin from all brands and will sell what the customer demands.
In scenario 2, it seems like Brand N is currently running a promotional scheme, so the retailer is pushing the brand wherever possible. That consumer was an easy target as they didn’t have any preferred brand. The retailer will only continue to do so till the time the promotion runs.
But scenario 3. That customer was surely not as easy conversion! Why did the retailer go through so much of an effort? Higher margin? Not likely.
It is important to understand the difference between the retailers in scenario 2 and 3. In scenario 2, the retailer was simply selling a more profitable brand. But in scenario 3, the retailer was selling a brand he truly believed in. A brand he is loyal to. Loyalty doesn’t come from higher margins. It comes from engagement with the brand. The higher the engagement, the higher would be the motivation to sell.
So, who would you call an engaged channel partner? The partners who actively participate in your channel partner programs. They continuously interact with the brand and have the motivation to sell your products as their own.
Result Size: 945 x 887 ​ If you’d like to know more about how to keep your channel partners engaged, then do check out other blogs “how to keep the retailers motivated“. and “the right way to reward”.

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