Understanding 5 Key Elements of Distributor Satisfaction - Divergent Insights

Understanding 5 Key Elements of Distributor Satisfaction

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If we talk about Indian retail market, it’s largely unorganized. It’s a well-known fact that organized retail constitutes to hardly 10 % of India’s retail business. Almost all the key industries including Pharma, FMCG, Building aterial, Sanitaryware etc. are mostly unorganized and need distributors to enter their products as per the structure and operation of market. It’s evident that being a manufacturer, you need a strong network of distributors to be in business. These industries witness high competition intensity and hence it becomes imperative for manufacturers or brands to ensure contentment of their distributor network.

In this article, we will discuss the main factors that influence distributor satisfaction:

Return on Investment:

Return on Investment is the main objective and motivating factor for any distributor to work with a brand. Return on investment is not something that can be achieved overnight; it has to be nurtured by a company over time. The market support is usually in terms of:

  • Support towards managing the key accounts, increasing sales, better conversion against competition
  • Enhancing infrastructure like point of sale material, display shelves, cold storage facility
  • Legal assistance
  • Assistance by brand in growing distributor’s business to unexplored regions

Logistics Management:

This consumes most of the time of a distributor. Distributors build up a comfort level with brands which automate and build systems that save cost as well as time for the distributor. Ordering and Logistics include several factors and the most important one is the ‘ease of ordering’. Timeliness and accuracy of the order delivered too are of paramount importance. Ordering and Logistics also include quality of service by transporters. Support by logistics in resolving issues is another factor that needs to be taken into account to ensure the highest satisfaction levels of distributors.

Commercials Handling:

A company needs to keep standard terms of trade on parity with other competitors in the market. Apart from this, there are several other factors that play a crucial role for enhancing distributor satisfaction. One of the major factors is timely and clear communication of policies. Communication on deduction, process of raising and processing claims are among the key differentiators that are decisive in ensuring customer satisfaction. The discussion about commercials as an important aspect affecting distributor satisfaction will not be complete till the time we speak about monthly account statement, credit policy and redemption of promotions.

Addressing Concerns

The relationship between the distributor and the management team of the brand is quite important. For a distributor, this relationship is one of the most important considerations. The way a brand treats its distributors matters a lot. Concern and care include a lot of aspects like responsiveness by logistics, finance and sales teams for resolving issues, access to the authorities of companies, easiness in registering any type of complaint etc. Apart from these factors, promptness of the brand in addressing various concerns of distributors also holds significance. Majority of distributors also consider frequency of visit by on-ground sales force too as a vital aspect.

Training Support:

Distributors normally have a traditional mind set and hence there is no huge investment on training; even if some sort of training exists, it’s just minimal and basic. Training support prepares distribution management for smooth and efficient functioning thereby establishing itself as one of the defining factors of distribution satisfaction. Distribution training programs are meticulously designed around the essential building blocks of routine operations like financial controls, sales planning, management of external environment, cost-service optimization, cost management, vehicle, warehouse planning and storage practices.

All these above mentioned main drivers can ensure highly satisfied and happy distributors who would look forward to having a strong and long-term association with a brand. Moreover, such satisfied distributors will act as a word-of-mouth mode of advertising by recommending the brand to other distributors as well.

Being in business, you need to rely upon professional market research companies to carry out this task of conducting Distributor Satisfaction Surveys for you in order to endow you with the most potent weapon to fuel the growth of your business.