Should the emergence of Blockchain cause you to rethink your Sales Distribution Model?


As we enter a new age with the emergence of Blockchain encryption offering opportunities for greater transparency in Supply Chain and reducing inventory management risk, are companies planning for an end to end approach to the supply chain? Often supply chain optimisation is the realm of the buying team, focusing on supplies into the company. But are companies taking the same approach to managing their sales, dealers, distributors or partners?

Mark Spragg Managing Director of Where Now Consulting says: “The quality and integrity of supply chains can have a profound impact on businesses and yet countless companies have not invested in front end sales processes and systems. Many companies we work with have strong electronic ordering capabilities for their suppliers but very elementary CRM or sales reporting capabilities beyond basic product traceability.

In today’s competitive, global business environment companies have multiple channels to reach their customers ranging from direct sales through to wholesaler and agency channels, this will often include one or many web based channels either managed by the company, its agents or distributors. Each channel provides greater opportunities for market penetration, targeting specific customers or segments but increases complexity. Creating the framework for success in each channel provides increased opportunity for growth and also reduces reputational and financial risk. As customer expectations for quality and transparency increase with technologies like Blockchain, the increased media and public attention on Data protection breaches and unethical business practices, mean that the failure to understand how external organisations are interacting with your business can cause major damage to your brand, just look at the impact of Cambridge Analytica on Facebook in recent weeks.

There are however some simple steps that can be taken:

Manage your channels

Your distributors and wholesalers are extensions of your business. You would not leave your business to run itself. Creating leadership and processes to manage channels is key to success. Regular contact with your channels both physically and virtually with aligned goals and clearly understood roles not only increases sales but also increases the customer experience.

Training and support materials

It seems obvious, but developing effective training programs for channel partners is often overlooked or underfunded. The channel partners are often the only connection the end customer has with a brand. A poor experience either at the sales or delivery stage can be both costly and damaging to the reputation.

Partner Selection

Whether selecting a retailer/dealer, wholesaler or agent ensure you have a clear view of what type of partner you are looking for, the capabilities they should have and most importantly their business culture and ethics. Too often agents or dealers are “signed up” by the sales team based on the opportunity of an order.  Sometimes turning that order away will be better than taking on a partner that does not align with your brand, culture or ethics.

Manage Conflict

Channel conflict exists for most businesses, even businesses only trading with a direct sales force will have conflict between sales teams or with web based channels. Being clear about where each channel is expected to trade and understanding each of your channel partners business models will reduce conflict. When conflict does arise be open and fair. Most importantly be ready to step in with your partners in the event of unfair practices between your channels. Such practices lead to dissatisfied and confused end customers.

Use incentives carefully

Incentive schemes for Channel partners can help to grow sales or improve the customer experience. Schemes are needed that deliver both. The major car manufacturers deploy a variety of schemes creating incentives on volumes sold, showroom and marketing materials through to the quality of the service facilities creating a framework that encourages both growth and customer experience.

If you would like to know more about this topic I will be more than happy to discuss or to respond to questions via email or instant messaging.