Building Dealer Loyalty to Your Brand
Dealers have no loyalty to brands.
Those aren’t my words, and that’s not my sentiment. But representatives of the two dozen manufacturer brands I met with at the National Kitchen & Bath Show (KBIS) in Las Vegas believe it.
Strongly believe it.
But before we accept this as an inarguable truth, consider two things:
One, loyalty means different things to different people.
And two, in my experience there are extraordinarily loyal dealers.
So, where does this perception of lack of loyalty come from? And how can brands create the kind of loyalty that matters to them and dealers?
What brands really mean by “loyalty,” and why most won’t earn it
Loyalty is an emotionally charged word. Lacking loyalty – or worse, being disloyal – implies betrayal. Which is a pretty intense emotion when you consider that we’re conducting commerce. But whatever your perspective on the concept of loyalty, it’s what brands want from their dealers.
In this context, loyalty means exclusivity. Never mind that this is not possible unless your brand generates so much business for your dealer that you can demand an exclusive relationship. A few brands manage this; what they have in common is putting a tremendous amount of effort and resources into consumer awareness. This takes uncommon discipline and carries a staggering price tag. Most brands lack the resources, discipline, and patience to reach this pinnacle.
There’s a solution. And then there’s a better solution.
In the absence of exclusivity, brands can structure sales tools and point-of-sale requirements so that they attempt to stand out from other brands in the category clutter. And they can place language in dealer agreements that requires a certain distance between any competition. But, do you really have the ability to monitor and enforce this? Particularly when there’s a better way to create loyalty.
First, ask some hard questions
Where does your brand fit into the purchase process? Does your product drive the purchase; like cabinets or appliances in the kitchen and bath category, or are you the subfloor adhesive? The answer to this question determines how you should proceed and what kind of support a dealer will want. And it gives you a more realistic sense of the kind of brand loyalty you can command (Subfloor adhesive? Not so much.).
Next: Who is the leader in your category? What is their brand position? What level of awareness does the brand have? Can you differentiate your brand from the category leader?
Be careful: Don’t be too fixated on your competition. Focus on your customer and their needs. Be aware of your competition and don’t imitate them. Imitating a brand leader only benefits the brand leader.
Second, don’t assume it’s only about margins
Dealers care about sales,. They care more about their reputations. In most dealer categories, these people are experts at what they do. Assuming they only care about the commission they make ignores the role their advice plays in the sales process. They have spent a lot of time learning about their customers and their market. The more you actively support their expertise – and by extension, reputation – the more likely you are to command their loyalty.
Invest in brand and product training to support dealer expertise
Brands often spend a lot of money and time concocting lofty brand positioning statements and brand promises.* They spend less time educating their sales teams and dealers about what the brand stands for and what it means to their customer.
Why is this important? I’ve talked with brand folks that say it’s the dealer’s job to sell the brand. And that means putting forth the effort to learn the brand. After all, the brand pays them, right?
Wrong. Dealers talk about and sell brands they understand and believe in. If you create that understanding and nurture that belief, you are well on your way to setting yourself apart from others in your category.
Get out of your bubble and involve your sales team and dealers
Listen to people on the front lines. This is a smart use of your resources for several reasons. First, they know stuff you don’t (and can’t). Often brands live in a bubble and have a skewed perspective of the real world. The people who embody the last link between your product and consumers may burst that bubble in surprising and valuable ways.
Second, it demonstrates to them that you value your relationships with them and want their input.
Third, when you roll out any marketing or sales support program your dealers and sales people will already have bought in. They helped create it, so they’re more likely to support and utilize it.
Make their job easier
If you want loyal dealers, give them tools that make it easier to sell your brand:
- Customizable sales materials, that help them differentiate their business from others
- Meaningful incentives
- Real-time leads
These are things that don’t do the dealers’ job for them, but set them up for success.
So, go earn your dealers loyalty. But don’t expect miracles overnight. If you’re looking for instant, unconditional loyalty we suggest a puppy.
*Most brand promises and positioning statements are self-important riffs on being the best that never explain in tangible terms what this means to dealers, consumers or anyone else who encounters the brand. They’re often indistinguishable from competitors’ positions or promises, and set a vague-but-lofty standard that the brand never bothers to achieve. If this describes your brand promise or positioning statement, fix it. Or get rid of it.