"Large distributors are not necessarily a good choice if you are an SME entering India. Your bargaining power is low and you will not always get the attention needed. Also consider your product match carefully. Sometimes a local dealer will include a premium product as a profile product, but in reality focus on selling cheaper versions."
– Kunal Singla, DI India
This part of the toolbox is relevant when you have selected your target market and are in the process of screening for a new potential distributor.
Many partners are found at trade shows or other events. Sometimes, it’s a lucky match, but, other times, choosing the first partner available leads to halfhearted market entries and unfruitful partnerships. Regardless of where you have met your potential partner(s), time spent in the beginning to ensure the right match is often saved in the long run if unsuccessful partnerships can be avoided. The tool recommends focusing on fewer partners to make them truly successful.
It seems obvious, but successful partnerships require you to see and treat your distributor as a real partner. The partnership must benefit both parties, and your partner should genuinely understand your value and the possibilities this association represents from a long-term perspective. You must have a clear idea of the qualifications your partner should possess and how you jointly can make use of each other’s strengths.
The tools presented can help you assess whether the candidates you have found are good matches for your company and can assist you in developing successful partnerships.
PARTNER ROLES
Before initiating cooperation with a distributor, it is of key importance that your company clearly defines how to structure the work process with a future partner. Through this exercise, you will analyze the entire sales channel and define desired roles and responsibilities for you and your partner, respectively. The partner role template provides you with a tool that addresses this task.
Without a clear definition of roles and responsibilities before initiating partner screening, it is difficult to evaluate potential partners’ relevancy during the screening process. This tool helps break the sales channel into phases and establish a clear picture of who is responsible for which tasks within each phase.
The analysis is based on the principle that all functions, which you believe your company does best, should be carried out by your company. Likewise, all functions for which the partners are best suited should be carried out in the local market. Remember to challenge yourself—and adjust the division of labor to the dynamics of the particular market.
Please refer to the matrix, where the stages of the sales process have been divided into the sales, delivery, and service phases. Adjust the phases so they fit your business. For each phase, decide who is best suited to deliver each task listed and mark it with a C for company, P for partner, and E for external 3rd party supplier/sub-supplier.
The template can also be used in meetings with your local partner to present your ideas and understand which roles your partner is interested in taking.
• Break the sales process into overall phases (marketing, sales, delivery, after-sales service, etc.)
• Only include absolutely necessary phases
• Define roles and responsibilities; decide whether you or your partner is most suitable to undertake each defined task/responsibility
Download Partner Roles tool template
Download Partner Roles tool example
PARTNER PROFILE
Selecting the right partner (agent, distributor, importer, dealer) in a new market is crucial for your company’s success. Preparing a clear partner profile can help you in this process.
Based on how you anticipate sharing the partner roles and responsibilities, you can develop a partner profile to clarify your company’s exact demands regarding new partners, some of which will be general, whereas others will be more specific. Through the Partner Profile tool, narrow down these demands and rate the importance of each.
The general demands will typically include topics such as sector and industry knowledge; size of the organization; complementarities of product portfolios; and language skills (a shared work language). To avoid making the list too comprehensive, list only absolutely necessary demands.
The market-specific criteria vary from country to country, but examples include personal contacts; ability to provide financing locally; the size of the partner’s sales staff compared to the size of the country; and others.
• Define clear requirements for a future partner and prioritize the requirements by degree of importance (1–3)
• Spend sufficient time discussing the criteria based on your experience with previous partners and expectations for the market.
Download Partner Profile tool template
Download Partner Profile tool example
PARTNER EVALUATION AND SELECTION
The Partner Evaluation tool helps you structure your partner assessment by benchmarking potential partners against each other—or against your requirements.
Whether you’re evaluating a partner you met at a trade show or five potential partners in a given country, this tool helps you structure information and provide a solid foundation for making your decision.
Partner due diligence
If you are assessing a partner you have met, this tool can help you benchmark the partner against your criteria. Often the tool can also help you define different questions to clarify with the partner to understand the match’s potential.
Open partner search
If you are approaching a new market and looking for the best partner, the following steps are recommended:
Step 1: Prepare a profile of your company to send to potential partners either directly or through an external consultant. If the latter is chosen, conduct a comprehensive briefing of the external consultant to ensure alignment and shared understanding of the task.
Step 2: Conduct a wide screening. You can find partners who match the partner profile here. Often, no partner will match all criteria, so be specific on “need to have” criteria and “nice to have.” Develop a short information profile on each identified company.
Step 3: Conduct a fine screening by going into detail through interviews, during which you can use tools from the next section of the toolbox to understand how your partner would approach the market if entrusted with a task.
Step 4: During the final evaluation process, use the Partner Evaluation tool. Sometimes you will not end up choosing the partner with the highest score due to personal chemistry or other factors. However, the tool can help you make an educated choice; bring it back to the office so colleagues can contribute to making the final selection.
Download Partner Evaluation and Selection tool template
Download Partner Evaluation and Selection tool example
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