Distributor Selection: Mastering the Blueprint Phase

In my recent article I presented a Simple Guide to Selecting and Engaging Distributors using the A-B-C of Route to Market.

As a reminder of the A-B-C of Route to Market, my aim is to simplify the world of RtM into a series of three steps that any RtM practitioner can execute. I would like the message to be actionable by all professionals, be they small business owners trying to find new export markets, commercial heads of large multinationals or RtM management consultants.

Regarding distributor selection, for example with a new market entry, it is vital to use a systematic approach. Where many companies make a fundamental error is that they go straight to distributor selection. This often results in choosing the wrong distributor partner and the market entry fails to meet expectations.

Fortunately using the A-B-C to Route to Market offers the recipe for success.

distributor selection blueprint

The first step is the Assessment Phase – or Where to Play as we sometimes call it. I described this is my last post and article.

The next step is the Blueprint Phase, or “How to Play” as we sometimes call it. Here we define our RtM Strategy, Market Entry Plan, design our internal processes and select our preferred distributor.

Blueprint Phase Overview

The blueprint phase for distributor selection involves developing a detailed strategy and plan for identifying, evaluating, and engaging with potential distributors to deliver growth or, for example, ensure successful market entry. This phase builds on insights gathered during the Assessment Phase and sets the foundation for execution and the Catalyst Phase.

We will consider the External Market, Internal Perspective and then the Distributor Selection. The order is important.

External Perspective:

RtM & Channel Strategy: Outline the specific channels (e.g., retail, e-commerce, direct sales) that you wish to target and within which you have a ‘right’ and opportunity to compete. Your Model Distributor Design (from the Assessment Phase) will have guided your targeting of Candidate Distributors in your Long List. Further define the roles and responsibilities of distributors within your overall distribution network (e.g., national, regional, niche) that now best fit with your market and RtM strategy.
Distributor Selection Criteria: Further develop a comprehensive set of criteria for evaluating potential distributors. As a reminder, key factors may include market reach, financial stability, operational efficiency, technological capabilities, sales and marketing expertise, and cultural alignment. See below. Create a scoring system or framework to objectively assess and compare potential distributors against these criteria.
Market Entry Plan: Develop a detailed market entry plan that outlines how selected distributors will be integrated into your distribution network. Include timelines, milestones, and key performance indicators (KPIs) to track progress. Plan for initial marketing and promotional support to help distributors successfully launch your products in the market.

Internal Perspective:

Sales Strategy: Define clear sales targets and performance metrics for distributors. Ensure these are aligned with your overall sales goals and market growth objectives. Develop a plan for regular performance reviews and adjustments based on distributor performance and market feedback.
Operational Alignment: Align internal departments (sales, marketing, logistics, finance) with the distributor strategy. Ensure everyone understands their roles and responsibilities in supporting the distributors. Establish processes for efficient communication and collaboration with distributors, including regular meetings, reporting systems, and feedback mechanisms.
Risk Mitigation Plan: Identify potential risks associated with distributor relationships, such as supply chain disruptions, market fluctuations, and regulatory changes. Develop strategies to mitigate these risks. Create contingency plans to address any issues that may arise, ensuring minimal impact on your market entry and operations.

Distributor Partner Selection:

We now come to Distributor Selection.

Selection Process: Implement a rigorous selection process based on your criteria and framework from above. We call this a Micro Assessment of candidate distributors. Conduct thorough due diligence, including site visits, reference checks, financial analysis, and capability assessments. Validate your shortlist (from the Assessment Phase) of the most suitable distributors and engage in detailed discussions to understand their business models, capabilities, and potential challenges.
Incentive Programs: Design incentive programs to motivate distributors and align their goals with your business objectives. This could include performance-based bonuses, sales targets, marketing support, and training programs. Ensure that incentive programs are attractive enough to motivate high performance while being sustainable for your business.
Training and Support: Develop comprehensive training programmes for your distributors to ensure they understand your products, brand values, sales processes, and customer service standards. Plan to provide ongoing support, including marketing materials, sales tools, and technical assistance, to help distributors succeed in the market.

By carefully planning and executing the Blueprint Phase, businesses can effectively select and engage distributors who are well-equipped to drive market entry and growth. This strategic approach ensures that the foundation is set for a successful and sustainable route to market.

You are now ready to execute Distributor Engagement – the Catalyst Phase - with your chosen distributor partner. I will deal with this in a future Article.

As I mentioned in a previous Article, it should now be clear why you should not rush straight to distributor selection.