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Guest blog: getting value from the manufacturer - dealer relationship

Car makers and their dealers can have a happy marriage together says Jonathan Francis, MD of Tresell if they follow four simple steps. If they don’t divorce could be imminent.

Car-makers and their dealers, computer companies and their resellers, financial service companies and their agents; they just don’t get on. They have a long-standing common love – the brand – but like many old married couples they seek points of difference, love to bicker, and have conversations characterised by misunderstanding and lack of individual responsibility.

The upshot of this dysfunctionality is marketing and communication inefficiency. The lack of mutual understanding, common purpose and intertwined business practices means marketing strategies are ineffective and most marketing initiatives are half-heartedly put in to practice.

Like many modern warring couples a lot of time and money is spent in patching up differences, in large part the brand owner clarifying, cajoling, correcting and consoling the channel owner. In one recent client study, Tresell quantified more than half the time and money spent on channel communication was spent on remedial action of this sort.

Faced with these seemingly intractable problems, most just decide to make the most of a bad lot, some have affairs (with other channel owners) and some divorce (through direct sales channels).

Our experience suggests that this marriage can be made to work, and there is a chance for a long and happy life together. There are four main areas to address:

1. Keep it steady and simple
Strategic goals must be clear, long-lived and met
This creates belief in the business model, encouraging channel owners to plan ahead, invest and achieve a predictable income stream

2. Make life predictable
Communicate little, communicate clearly, communicate predictably
Channel owners receive reams of uncoordinated and often contradictory commands from the brand owner. Better co-ordinated, predictable and less-frequent communication results in more action and better results.

3. Understand life on the other side
Stand in the other person’s shoes
Most people in the brand have never experienced life in the channel. Most people in the channel have never experienced life in the brand. Swopping shoes, everyone swopping shoes, can have dramatic effects.

4. Talk, listen, respond
All of the three areas above involve talking more, listening more and responding more. Formal mechanisms for achieving these things are a precursor to effective channel marketing and communication.

Simple stuff. Like any marriage, from the outside it looks simple. Getting it right means addressing these issues every day, with commitment, thought and a lot of love. Every couple is different, and every solution is different. But a solution there is.

> jonathan.francis@tresell.com
 

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