Most manufacturers have a love/hate relationship with their brokers. That's because most brokers support several different brands and only have a limited amount of time to give yours the attention it needs.
Brokers and distributors provide a valuable service, allowing small organic and natural companies to grow quickly and compete across different channels and retailers. But few manufacturers have any real insight into their broker's day-to-day activities.
Some manufacturers effectively give the broker the “keys” to their company and expect them to manage all aspects of their success. This is a huge mistake! The relationship should be a true partnership.
If you want to get the most out of the relationship, you need to take a more proactive role in directing your broker’s efforts. This will dramatically improve your sales while helping you better understand your customers.
Maximize broker effectiveness
Establish KPIs (Key Performance Indicators) for each of the 4Ps (promotion, pricing, placement, product).
Clearly define your distribution, pricing, merchandising and promotion objectives and goals. Identify specific target stores to maximize your opportunities and grow sales. Focus on stores where your core customers shop. Develop a scorecard to track and monitor your broker’s progress.
Develop a scorecard.
Include your objectives and set goals with specific timelines to achieve those objectives. The scorecard should be a written agreement between both the broker and the manufacturer. The goals need to be measurable and revisited on a regular basis.
Communicate your expertise to the broker/distributor.
You are the passionate expert for the category in which you compete. Arm your broker with relevant consumer and product information to help them make the sale and strengthen their relationship with the retailer. Selling is either relationship-based or fact-based. The more you support your broker, the better job they will do for you.
Schedule regular follow-up meetings with your broker and even attend retailer meetings with them when possible. This illustrates your support for the broker as well as your commitment to the retailer.
Own all communication with the trade and your broker.
This includes all selling and marketing materials, business reviews and business intelligence. You should control the message and image you want your brand to convey.
Key benefits of doing this include:
- A unified and consistent message/communication to the trade.
- Retention/ownership of all insights for use across all aspects of brand development including business reviews and category reviews.
- Full access to all data intelligence. You choose the insights that best address your needs.
- You become the category expert focusing your full attention on growing your brand and supporting retailers.
- You “own” your customers. This plan allows you to communicate directly with them. When you satisfy their needs, they remain loyal to you.
- You help guide your broker so that they are less distracted by the many other brands and categories they support.
You spent a lot of time building your passionate natural brand. Shouldn't you also keep your hand on the steering wheel as you navigate the sometimes-turbulent waters with your broker?
Daniel Lohman is the owner of Category Management Solutions (CMS) which provides innovative strategic solutions for natural and organic CPG companies interested in gaining a significant competitive advantage.