Last week, I had the privilege of speaking at the Fenestration Day Conference in Illinois. The goal was to share with the group some unique approaches to find success. Not too hard, hey? In a business that has tried everything under the sun, what could we possibly come up with that would allow our attendees to leave the conference better than they came?
It did not take long to realize what that was…since there were manufacturers, distributors and dealers in the room we talked about something that is crucial for all their success…trust.
I shared some statistics with the group…consider this:
A recent survey of 750 manufacturers and 500 distributors revealed that 82 percent of manufacturers and 92 percent of distributors believe that sales performance and profitability are being negatively impacted by problems in the working relationship.
49 percent of manufacturers and 42 percent of distributors said the overall level of commitment in their working relationship is very low.
51 percent of distributors and 34 percent of manufacturers indicate that there is a low level of cooperation in the working relationships.
There was silence in the room. People tried to understand these shocking statistics. So fast forward to now, what does this tell us about you and your business relationships? If you are a manufacturer, then think about the relationships that you have with your current distributor clients. Nine out of 10 of those believe that their sales are being negatively impacted by you! To you distributors, think about your manufacturing partners for a moment. Eight out of 10 of them think that you are the problem.
In either case, it is amazing the vicious circle that ensues. Now complicate this even further…63 percent of distributors and 73 percent of manufacturers indicate that high quality two way communication is virtually non-existent in their relationships.
So you have two people that don’t trust each other and they cannot even tell each other that they don’t trust each other. So what do they do? Manufacturers set up more distributors and distributors add more lines to their arsenal. And the distrust cycle starts…
So how do you stop it? How do you control this out of control cycle? There are a couple of simple things that you can do right away. Having been in this cycle at various times for 30 years now, I have seen some pretty crazy stuff go on. But I have also seen some very successful partnerships. Here are some keys to improving your relationship with your manufacturer or distributor:
Review the definition of “partnership.” I was shocked when I was able to finally get this concept in my head. When you think about partnerships, what do you think of? Probably the same thing I thought…a mutually successful relationship…right? Only half right: “each incurring liability for losses and the right to share in the profits…” This is the true definition of partnership. So think about the last time you agreed to share in the losses? Everyone wants to share in the profits, right? But the losses? Ummm, not so much. If you truly want to improve your relationships, then at least you should have the conversation about how losses will be handled.
Seek first to understand, then be understood. I have this on the bottom of all my e-mails, as I am a true believer in this. We all know someone that we talk to and they don’t even listen to us, they are too busy formulating a response in their mind. Do yourself a favor, slow down and listen fully to the person talking to you.
Set clearly defined goals with a plan of execution. Only 17 percent of distributors indicated that they have this from their manufacturer. Eight out of 10 distributors do not have a goal or a plan of execution. And it’s safe to say, a dollar value goal is not a goal, unless it has clearly defined plans to accompany it. Trust me on this as I have been on the receiving end many times of a dollar goal without a plan to get me there. So the next time you get in the car and have a destination in mind, don’t plan the route, just drive. That is how successful it is to have a dollar goal without a clearly defined plan to get there!
If you attended Fenestration Day, I hope that you enjoyed our discussion and more importantly, I hope it encouraged you to improve your business relationships through trust. If this is your first exposure to it, just know that while painful, it is so powerful if you can grasp on to this concept!