5 Key Drivers of Distributor Satisfaction

The Indian retail market is predominantly unorganized as organized retail just accounts for close to 10% of country’s annual retail business. All the major industries like FMCG, Pharma, Building material, Plywood, Sanitaryware, Tyres etc. are primarily unorganized and require state or region level distributors to penetrate their products, given the way the markets are structured and operated. This coupled with high competition intensity in these industries, makes it extremely important for manufacturers or brands to ensure satisfaction of their distributor network.  

The following are the key factors that affect distributor satisfaction:

ROI & Market Support: For majority of distributors, return on investment is the sole defining factor of their intent to continue with a brand’s distribution. However, return of investment does not come overnight and is a factor which is nurtured over time. A brand’s involvement with the distributor to grow it and the market support provided is highly valued by distributors. The market support is usually in terms of:

  • Support towards key accounts, high-take off point of sales, converting competition outlets
  • Increasing infrastructure like cold storage capacity, display shelves, point-of-sale material
  • Help by brand in growing distributor’s business to uncharted territories
  • Support on legal issues
Ordering & Logistics: This occupies the majority everyday time of the distributor. Distributors develop a comfort level with brands which automate and develop systems which are easy to use as well as save time for the distributor. Ordering & logistics includes:
  • Ease of ordering, accuracy of order delivered
  • Booking to delivery cycle
  • Timeliness & accuracy of products delivered
  • Ease of Quality of service by transporters
  • Support by logistics in resolving issues
Commercials: Apart from keeping standard terms of trade at par with other competitors in the market, the following aspects play a critical role in terms of defining distributor satisfaction:
  • Timely & clear communication of policies
  • Process of raising & processing claims, communication on deduction
  • Monthly account statement, redemption of promotions, credit policy
Care & Concern: One of the most important considerations for choosing a brand to distribute is the relationship between the distributor and the management team on the brand side and how is he treated. Care & concern includes a lot of aspects, some of them are as follows:
  • Responsiveness by sales, finance and logistics in resolving issues
  • Ease of access to company managers
  • Ease of registering complaints
  • Timeliness of addressing concerns
  • Frequency of visit by on-ground sales force
Training: Distribution businesses are typically traditional in nature and hence there is minimal or no investment on training. Training support equips distributor management to function more efficiently & effectively and hence is one of the factors in defining distributor satisfaction. Distributor training programs are developed around the important elements of day-to-day operations like:
  • Sales planning, financial controls, managing external environment
  • Cost management, Cost - service optimization
  • Vehicle, warehouse planning and storage practices

The above key drivers can lead to highly satisfied distributors who would intend to have a long-term association as well as would be likely to recommend the brand to other distributors.  

If case you are looking to conduct Distributor Satisfaction Surveys, then Channelplay is a market research agency which carries relevant experience across various distribution intensive business segments. Please feel free to leave a message in the form at the end of this page or visit our website.

Topics: Market Research

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