At the risk of sounding like a broken record, it’s been a tough year for lots of companies, and indeed entire sectors. When business is slow, we’ve all got an imperative to look for new opportunities. But you have to be smart about it.
In the past, I’ve seen manufacturers or their distributors see declining sales from their B2B resellers and look to find revenue growth by reaching out and offering to sell to and service the end users directly. To reiterate: I’ve seen it before — and because time is a flat circle, I’m seeing it happen again. Honestly, I get it. I understand why manufacturers or distributors would be motivated to do that. Frankly, I’ve had opportunities cross my desk where I’ve been tempted to do it too.
But bear in mind that reaching out to your customers’ customers carries significant risks that offset the value of the prize you’re hoping to win. I’d like to bring up a point that often seems to get lost in the strategy meetings that lead to the decision to poach your B2B resellers’ customers. Consider two likely reasons why your reseller is buying less from you: Either they don’t like you anymore, or their own customers are buying less. If you learn that your resellers don’t like you anymore, find out why, and go work on that. For the rest of you, read on.
Suppose your resellers are buying fewer products from you, and it’s because their customers are buying less from them. In that case, hopscotching over your resellers to try and get the business directly is probably not going to work. Have some faith that your reseller partners know what they’re doing and are doing everything in their power to maintain their own client relationships and explore new growth opportunities themselves. I assure you that if business is slow for you and slow for them, they are working hard to get more business — just like you are.
First of all, if your resellers’ customers are buying less because they have less money to spend, going to them direct doesn’t mean they’ll suddenly find the money to spend it with you. It’s wishful thinking. Second, and most importantly, going direct to B2B end users and cutting your resellers out of the equation burns a bridge that you will never be able to rebuild. Simply put, it will blow up in your company’s face.
Again, I’ve seen that happen before. Not to me, fortunately. But I’ve always believed that the only thing better than learning from your mistakes is learning from other people’s mistakes. One of my fleet installers purchased cell signal boosters from me and another brand from another distributor. That other distributor went out and started knocking on the doors of commercial fleet customers, offering to service them directly. My customer — one of my largest fleet services accounts — found out, and that was the end of their relationship with that brand.
One of my best friends has an axiom about precisely that scenario that you should take away and meditate on: “You can collect the wool from your flock as many times as you like, but you can only skin them once.”
Closing out, now that I’ve underlined that I understand the temptation to grow your revenue by reaching out to your customer’s customers and why it’s ill-advised, I’ll offer a solution or at least a suggestion: Have a dialogue with your B2B resellers. Find out what you can do to help them grow their revenue.
Your resellers are your partners, so actually partner with them. Ask them what they need to be more successful and find a way to leverage that for them. If you’re going to expend resources on prospecting and generating leads, do it for their benefit. I do this all the time as a matter of course: When I find or hear from an interested commercial end user, I qualify them and hand them off to one of my resellers who is a good fit for what they need.
As the TV commercials keep reminding us, we’re all in this together. So if you want to grow your revenue as a distributor, help your resellers grow theirs.