Many relationships between manufacturers and brokers likely fall into the “it’s complicated” category. The last decade has been one of change for companies and their brokers leaving many wondering exactly how to proceed from here.
While every partnership with a broker has its own nuances, I’ve relied on my time in the field working both as a broker and alongside clients who are brokers, to develop the following tips to help you and your company benefit from our experience.
1. Measure your brokers with the same metrics you measure your sales team.
If you’re going to measure your sales team on their sales performance, do the same with your brokers. Hold them to a performance target. They need targets to be held accountable to and it’s a chance for you to communicate clear expectations of sales levels. But, also be prepared to take action if targets aren’t being met.
2. Keep roles clear. Your broker is the customer/market expert. You are the product expert.
You hired the broker to penetrate the customer—you believed they had the experience, time, scale and local market knowledge to get to the customer at a deeper level. You are the product/category expert, with a deep carnal knowledge of your competitive position, unique product features and benefits, and programs that can be leveraged to gain and keep distribution. Let the broker be the customer expert while you stay abreast with what’s going on with the product.
3. Your broker should be treated like an extension of your sales organization—there is little value in withholding information from them.
If you’re concerned about sharing information with your broker, something is broken. There’s a fine line between what’s confidential and what’s necessary market knowledge. Frankly, those manufacturers who expose more derive great benefit from the broker’s extra perspective.
4. Establish clear priorities and stick to them.
One of the greatest challenges that brokers have is when manufacturers come to them with multiple priorities—and then, change those priorities frequently. That’s just poor and inconsistent management, and when you do it, you’ll get poor and inconsistent results. You wouldn’t do it to your organization, would you? So, it’s important that you don’t do it to your broker. Keep in mind that the squeaky wheel doesn’t necessarily get the grease, and the most scattered surely doesn’t get the most attention.
5. Expect your brokers to manage the administrative side of the business—this includes customer contracts, trade promotion management, etc.
There’s a level of trepidation out there with second and third-tier manufacturers not to ask their brokers to do too much. If a broker says no, I promise that you will find another broker who will do it and deliver results.
6. Be present, but be meaningful. Have a reason to show up in their office, and make the time investment significant.
If you’ve got enough time that you become a presence in the office, do you really need the broker? Get down to business in your meetings—communicate clearly to your broker and let them do their job.
7. Establish reasonable and measureable retail priorities. Be mindful that what you can/cannot affect at retail will vary by customer.
You have to be realistic in your expectations. Also consider how much your brokerage and commission dollars can support.
8. If you decide that the performance of the broker warrants a change, be honest with yourself on your influence on that performance before making the change.
If all organizations are perfectly designed to achieve the results they’re getting, then simply changing brokers will not typically yield a fundamentally different set of long-term results. There is a delicate balance of performance influencers that are typically managed and controlled by the manufacturer—brokers are only one component. Don’t ignore yellow lights in other areas.
9. Understand where you rank within your broker organization based on revenue and profitability.
Ensure that the resources against your business and your expectations are commensurate with your ranking.
10. The broker is an important part of the customer relationship, but not the only part. It is important that the customer recognizes you as the person that makes, markets and sells the products.
Plain and simple, the customer needs to know who you are. The customer needs to know that as the representative of your company that you’re available for any questions, challenges or opportunities.