I am often asked what is the single most important thing that should be done after selecting a new distributor.

Before I answer this question, let me recap the process of distributor selection.

The three phases of Distributor Selection are:

• The Assessment Phase
• The Blueprint Phase
• The Catalyst Phase

These phases follow the process that we call the A-B-C of Route to Market. This model simplifies the world of RtM into a series of three steps that any RtM practitioner can execute.

Back to the question.

The single most important thing that should be done after selecting a new distributor is to keep your distributor honest. What do I mean by this?

There is a tendency to relax after the deal is done with a new distributor. A lot of effort has been expended in the process and now we can relax a little. Let the distributor do their work. Keep out of their way.

No. I repeat no. This will result in relative failure.

Now is the time to establish the correct behaviour. Now is the time to ensure that the habits that form immediately after engagement are winning habits. After all, we also call this phase ‘How to Win’.

How do we do this?

The answer is Joint Business Planning and Joint Action Planning.

Overview - Joint Business Planning & Joint Action Planning

Joint Business Planning (JBP) and Joint Action Planning (JAP) are essential for fostering strong partnerships between companies and their distributors. JBP focuses on strategic alignment by setting shared long-term goals, conducting market analysis, and establishing mutually agreed-upon sales and revenue targets. It involves detailed planning of investments, resource allocation, and the identification of strategic initiatives that drive growth. Regular review mechanisms are also established to assess progress and make necessary adjustments, ensuring that both parties remain aligned and committed to their common objectives.

JAP, on the other hand, translates the strategic goals from JBP into specific, actionable steps with clear responsibilities and deadlines. It emphasises tactical execution, setting short-term objectives and performance metrics to track progress. Resources are allocated effectively to support each action step, and support systems are provided to facilitate efficient execution. JAP allows for real-time adjustments based on feedback and changing market conditions, ensuring flexibility and adaptability. Regular communication and a continuous feedback loop help refine the plan, ensuring both parties stay coordinated and focused on achieving their mutual goals.

I will now deal with each in more detail.

Joint Business Planning (JBP):

1. Strategic Alignment:
   • Shared Vision and Goals: Ensuring both parties have a common understanding and commitment to long-term objectives.
   • Market Analysis and Positioning: Comprehensive evaluation of market trends, customer needs, and competitive landscape to identify growth opportunities.
2. Sales and Revenue Targets:
   • Mutual Agreement on Targets: Setting clear, realistic, and mutually agreed-upon sales and revenue goals.
   • Performance Benchmarks: Establishing key performance indicators (KPIs) to measure success and progress towards targets.
3. Investment and Resource Allocation:
   • Shared Investments: Determining the necessary investments from both parties in marketing, training, technology, and infrastructure.
   • Resource Planning: Allocating resources such as sales teams, marketing budgets, and technical support effectively.
4. Long-term Relationship Building:
   • Strategic Initiatives: Identifying joint projects and initiatives that drive growth, such as new product launches or market expansion.
   • Review Mechanisms: Scheduling regular reviews to assess progress, address challenges, and make necessary adjustments.

Joint Action Planning (JAP):

1. Tactical Execution:
   • Detailed Action Steps: Translating strategic goals into specific, actionable steps with clear timelines and responsibilities.
   • Task Assignments: Assigning tasks to individuals or teams within both organizations to ensure clarity and accountability.
2. Short-term Objectives:
   • Milestones and Deadlines: Setting short-term goals and milestones to track progress and maintain momentum.
   • Performance Metrics: Defining specific metrics to measure the success of each action and monitoring these regularly.
3. Resource Deployment:
   • Resource Allocation: Ensuring the necessary resources, such as personnel, budget, and technology, are allocated to complete each action step.
   • Support Systems: Providing access to support systems and tools to facilitate efficient task execution.
4. Flexibility and Adaptability:
   • Dynamic Adjustments: Allowing for real-time adjustments based on feedback and changing market conditions to keep the plan relevant.
   • Problem-solving Mechanisms: Establishing processes for addressing issues promptly to mitigate risks and maintain progress.
5. Communication and Coordination:
   • Regular Updates: Scheduling regular check-ins and updates to discuss progress, share insights, and coordinate efforts.
   • Feedback Loop: Creating a continuous feedback mechanism to refine the plan and improve outcomes based on input from both parties.

The Key Documents: Joint Business Plan (JBP) & Joint Action Plan (JAP)

JBP Overview

Each party needs to be clear about what is expected of the other. Like any new business arrangement, a plan is needed. The JBP is a shared strategic document that provides a roadmap to delivering the elements agreed in the Trading Terms & Conditions (TTC) between the Producer and the Distribution Partner (DP). It is long-term in nature and details the joint ambition, and what each party needs to do to fulfil that ambition.

Elements of JBP

• Outlook: The JBP is strategic and long-term in nature and focused on investments and big-ticket items.
• Timeline: Covers the term of the TTC between the DP and Producer, usually in annual or quarterly buckets.
• Management Level: Agreement should be made at senior level, Producer CEO and DP CEO/Owner.
• Reviews: Pre-planned, structured, and diarised every quarter, at senior level.
• Roles & Responsibilities: The JBP must define the role that the Producer and DP play, across all business activities, including, for example, demand planning, order capture, and fulfilment, demand creation, advertising and promotion, credit management, RtM execution, and activation, etc.
• Targets: The JBP should set out the key annual numbers agreed in the TTC, including, for example, volume, profit, share, brands, launches, etc.
• Investments: There should be clarity on Producer and DP investments, front and back margin, incentives, etc.
• Territories: There should be clarity on which areas a DP covers, e.g. nationwide, city-specific, or a certain zone, channels, key accounts, etc.
• Data: There must be clarity on the collation, exchange, management, and reporting of data.
• Service Level Agreements (SLAs): This clearly defines the levels of service both parties expect.
• Continuous Improvement: The JBP embodies a philosophy of collaboration and a willingness of both parties to improve, train, and execute better to deliver joint success.

JAP Overview

A JAP is a shared operational document that details the cycle of activities needed to deliver the elements agreed in the JBP between the Producer and the DP. It is short term focused and should detail the specific monthly actions and activities that must take place, including what each party needs to do to execute the plan.

Elements of JAP

• Outlook: The JAP is Operational in nature focused on short term actions.
• Timeline: It is usually a rolling 12 monthly cycle plan, taking account of the TT&C period with a particular focus on the next three months of the plan.
• Management Level: The JAP is developed and managed at the Operational Management level.
• Reviews: Pre-planned, diarised monthly review meetings, with shared minutes and actions.
• Roles & Responsibilities: The JAP will clearly define the roles of individuals responsible in both organisations for all business activities. For example, these include demand planning, order capture and fulfilment, demand creation, advertising and promotion, credit management, RtM execution and activation, etc.
• Targets: The JAP should set out and break down by month (by territory, channel, geography, segment, etc.) the specific detailed targets that will deliver the Key Targets agreed in the JBP.  For example, these may include territory volume, brand distribution, listings, Point of Sale Material (POSM) placement, merchandising, planograms, promotions, pricing, out of stock rate, availability, etc.
• Investments: Details of the amounts and timing of investment and supporting business cases within the JAP timeframe should be included. A monthly breakdown of the incentive targets to be achieved should also be detailed.
• Territories: The JAP sets out how the entire market is mapped, which overall areas the DP covers and how each of the areas/territories are covered, who specifically covers them, and details the service model to ensure clarity on who covers specific channels, key accounts, etc.
• Data: The JAP provides the operational rules, protocols, processes, requirements and methods of data collation, exchange, data security, including the overall process for management of data.
• Service Level Agreements (SLA’s): The JAP must define the areas and the agreed expectations that come under the SLA, e.g., order fulfilment, data exchange, inventory, payment terms, reporting, etc,
• Continuous Improvement: The JAP will translate the philosophy into the areas of measurable collaborative improvement, for example, Training for DP staff in planning, logistics, finance, sales execution, or focusing on SLA areas and targeting improvements jointly with specific plans reviewed monthly, etc.  

By focusing on these key aspects of Joint Business Planning and Joint Action Planning, businesses can ensure effective distribution execution leading to stronger distributor relationships, better alignment, and enhanced performance. And that means increased sales.

Back to the question I posed at the beginning of this Article. JBP and JAP is the single most important thing that should be done after selecting a new distributor.

• It will keep your new distributor honest.
• It will quickly establish the required performance-related behaviour.
• It will establish a Winning habit.

That is part of ‘How to Win’. Good luck

We’d love to hear your thoughts!

Have you implemented Joint Business Planning and Joint Action Planning with your distributors? Please share your experiences, challenges, and successes in the comments below. Let's discuss how these strategies can drive your distribution success!