Three Proven Tactics to Increase Dealer Sales
We’ve worked in several vertical markets, and all of them share common attributes of the dealer/brand dynamic that challenge conventional wisdom. We view the dealer as that critical last mile between a brand and the end customer or consumer. We believe the dealer should be the hero of your brand. Brand heroes are most likely to increase dealer sales.
First, the dealer has control of customers’ perceptions of the brand. This makes marketing managers cringe, but a dealer has the advantage of a one-to-one relationship with the end customer. And they’re very skilled at influencing what the customer buys. Customers may walk in with specific brands in mind, but it’s the dealer that either reinforces or redirects that brand preference. Dealers have told me how they do this: By a simple pause after a customer mentions a brand, followed by a statement like “we could do that, but we’ve had great results with (alternative brand)….”
Second, dealers don’t think like brand managers. They might represent dozens of brands. They wear a lot of hats, and only one of them says marketing.
Third, and this is very important: Dealers care about more than money. In the kitchen and bath space, they are often designers and craftsmen. By virtue of doing a good job they’ve grown into operating as dealers. Dealers care deeply about sales and money is important, but it isn’t the most important factor.
Our research tells us that the manufacturer/dealer relationship is most effective when it works for the dealer AND the brand. Obvious, right? But in reality the heavy lifting of this relationship belongs to brands because they’re in a position to implement the necessary processes that make everything work. And, they’re the ones who stand to reap most of the rewards.
Always keep this in mind. You can’t just check this off your list and forget about it.
Let’s talk about the trap many brands fall into.
They assume incentives are the most effective tool to grow dealer sales, and that’s where they start. It’s also where they usually fail. Remember, money isn’t most important to dealers.
Here’s What Works.
We have three strategies to grow dealer sales. Most brand managers know them, but they rarely implement them in a systematic way, or in the right order. They are:
- Communicate with your dealers
- Train your dealers
- Then, and only then, incentivize your dealers
I’ve numbered these for a reason. Do them in this order.
Strategy #1: Communicate with your dealers.
According to our 2015 survey of kitchen and bath dealers, only 52% of dealers said that brands ask for input. Of those who were asked, they felt their input was valued. I‘ve been part of numerous marketing efforts that fell flat because dealers were left completely out of the loop. It didn’t matter how strategically sound the efforts were, they failed for one simple reason: The dealer had no idea what was coming. I’ve toured dealer facilities and seen materials still in shrinkwrap. When I asked the dealers they would say, “that stuff just showed up—I don’t even know what it is.” This is an expensive lesson for brands to learn. Worse, many never seem to learn it.
Many brands think that they’ve set up lines of communication with their dealers, but in reality they have just delegated a task to their sales rep.
In our research, we asked dealers which brands do a good job of supporting dealers and which ones do a poor job. We were surprised to find many brands showing up on both lists. 21% of the brands mentioned were on the good and bad list. What does this mean? Often, sales reps are entirely responsible for dealers’ perceptions of brands.
Many brands make the mistake of routing all communications through sales reps. Even if the sales rep is excellent, this is still dangerous. Dealers become attached to the rep and not the brand. Brands receive filtered, inconsistent feedback, and have no guarantee that communications to dealers aren’t filtered – the messenger may not want to deliver bad news.
Brands need to build communication and feedback mechanisms into their dealer channels so that dealers play a meaningful role in their marketing.
So when it comes to communication here are two tips: Never surprise a dealer, and always ask for feedback that can be factored into planning.
Strategy #2: Train Your Dealers
Brands often make a leap in logic. They assume dealers understand their brand, products or plans through the process of osmosis. Dealers are busy. If you want them to get you, you have to train them.
Start with this mindset: You’re competing with other brands for your dealer’s attention. In our research dealers mentioned 80-plus brands they represent.
The more effectively you train them, the more likely it is that your brand will be top of mind when it’s time to make a sale.
There are three tiers of training:
First, your brand. Dealers should understand, in a crystal clear manner, your brand promise. If you are unsure of this, it’ll get a lot murkier once it reaches the dealers. You have to be able to deliver this brand message more clearly and concisely than Brand X, Y or Z.
Second, your products. Dealers need accessible, organized, detailed information about your products – specifications, features and benefits, options, add-on products, financing, warranties, and the like. They won’t remember all of this, so you have to deliver it in a form they can put their fingers on immediately.
Finally, your marketing. Don’t assume dealers understand how they fit into your marketing plans. Share your game plan and timeline, and show them clear, tangible ways they can build on your planning to drive traffic into their businesses, increase consideration of your products, and close sales.
There is no single best way to train dealers. Use the right channels to deliver the right information:
- In-person training for complex or technical information. Manufacturer controls venue, and dealers are free from distractions. This is requires the greatest investment, so you may need to allocate resources according to dealer performance – top tier dealers get trained at off-site locations; lower performers receive training from a rep.
- Webinars/web meetings for product news and updates, as well as sharing information about marketing programs.
- Video, online content for a range of information, and to reinforce info delivered through other channels. This is a great way to provide detailed product spec sheets and installation info.
Training isn’t a “one and done” activity. Follow every training event with communication that reinforces the key points, reminds trainees where to find important information, tests them to see how much information they’ve retained, and seeks their feedback about the training.
All training should be interactive. Involve the dealers. Ask questions. Reward the ones who are paying attention.
Strategy 3: Offer the Right Incentives the Right Way
If you’ve followed steps one and two–communicate and train–your dealers know your brand and products. You’ve demonstrated that you’re invested in their success–and they’re invested in you. Step three, incentivizing them, activates that investment and boosts sales. You’re no longer fighting to be top of mind, or even in consideration. You’re the go-to brand, and the incentive is a nice reminder that you’re putting your money on the dealer, and her future.
Here’s an exercise to help you formulate an incentive strategy.
Jot down the reasons you want to incentivize your dealers–the more detail, the better. Here’s a short list to help you get started:
- Jumpstart growth of a new product category
- Improve placement and promotion of specific SKUs within dealer showrooms
- Increase your footprint in the dealer showroom
- Lift participation in brand-driven promotions
Notice that “increase sales” and other equally vague phrases are absent from this list. Of course you want to increase sales, but to effectively incentivize your dealers you have to break your goals down into tangible, manageable, and measurable tasks.
Once you’ve got that list, get out a second sheet of paper. For each incentives goal, list the dealers you want to include. Start with broad categories, then add examples. See how you’re moving away from a very general notion of rewarding dealers for doing their job toward incentivizing them to perform in ways that benefit your brand? Ways that are customized to address dealers’ specific strengths, weaknesses, and capabilities. Not all dealers perform equally or offer your brand the same advantages, so why offer them the same incentives?
Incentives fall into three categories:
- Recognition
- Access
- Material things
There’s no priority order to this list. No one incentive is most valuable to all your dealers.
Dealers seek recognition because it shows that brands are paying attention and appreciates them, and because it may place them among an elite peer group.
Recognizing dealers doesn’t have to be complicated, but it should add value to your relationship with the dealer. Preferential placement in advertising for high performing dealers – recognition that increases the potential for sales leads – is tangible, valuable and aligns with brands’ sales objectives.
Your brand heroes crave the opportunity to offer feedback. Access matters to them more than almost anything – they truly value is the opportunity to help brands make them more effective at selling products. They want a direct line to product managers and maybe even the C-suite. They want brand support for pitching large projects. They want influence that has value beyond money. This is where a dealer advisory board can be a great tool.
Then there are material goods. Cash, product terms and discounts, maybe a cruise–these are the things that create short-term incentives but rarely have a lasting effect. Spreading cash or its equivalent around can have an immediate impact on your goals, but in all seriousness, do you think you can buy dealer loyalty for a few hundred dollars? The corollary to this is that if you can, these are probably not the dealers you want as partners.
The exception to this is when the reward puts them in an elite group, and they get a trip to an exotic location, where they get access and recognition.
A Final Word About Making This Work
Avoid these pitfalls:
Don’t give up too soon. It may take a while for an incentive program to build momentum. Especially if work needs to be done to mend a damaged relationship.
Don’t focus only on sales. This needs to be viewed as a long term investment and not a get rich quick scheme. Yes, the goal is sales, but the sales need to be profitable and sustainable.
Don’t fail to follow through. It’s important that your dealers see you’re committed, even if you’re not seeing the results that you hoped for.
This can yield immediate benefits, but the real value is mid- to long-term brand loyalty, mindshare and increased sales.
Do it right, and you’ll turn an underutilized dealer base into your most valuable asset.
