“The Distributor is My Client”
Any reasonable person would tell you that this statement has a built-in contradiction. In a live survey that I conducted during one of my lectures in front of a large and experienced crowd of exporters, around 67% believed that if a locally-based company that develops or manufactures products and solutions works with a distributor or other channel partner abroad and issues them an invoice, then the distributor is that company’s client.
A few exceptions aside, this is a mistake. The client, marketing-wise, is not necessarily the entity fronting the bill, rather it is the entity using the product or service, or at least benefitting from it. Will the distributor continue ordering your products if the end user stops ordering from them? Probably not. The needs of the end user dictate the chain of value to the client – from the company developing or manufacturing a product to the distributor acting as a distribution channel, which together with additional services or products knows how to bring the solution and value to the end user.
Saying that the distributor is not the client does not mean that the distributor is not important – on the contrary, the distributor is very important – since it acts as your sales channel, and is in essence your business partner, through which you can reach more than one client and which can provide clients with an entire range of complementary products and services, without which the client will not purchase your product, such as support, implementation, integration, and other complementary solutions.
Why are all these definitions so important? The reason is that they embody a marketing mistake of the first-degree, whereby there is no need to dive deep and become acquainted with the end users, get to know what they are like, what they prefer, their needs and special pains, and one can settle for choosing good distributors that will deal with the headache of entering the target market and maintaining client relations. However, if your company is perfectly fine with ‘hiding’ behind the distributor and not getting to know the end users, where do you get the confidence and knowledge to develop products tailored to your target market? Also, how will the company choose the right distributors, which know how to reach your target customers, if the company itself has no clue about its customers and their characteristics?
In that context, it is often asked whether and how can a relationship be maintained with end users if a given territory already has independent distributors that are reluctant to expose their clients to your company? We will discuss this issue at length in a separate post.