How manufacturers and distributors can work together to manage the relationship.
Much has been discussed over the years about fostering a healthy relationship between the manufacturers of material handling equipment and the distributors who resell the products. All of this advice—open communication, establishing common goals and training, to name a few—in the end should result in a trustworthy, mutually profitable relationship. Under normal circumstances, these principles work fine and the relationship trots along until there is the proverbial bump in the road. The true test of the distributor-manufacturer relationship is in dealing with a difficult customer. Of course, difficult customers come in all different shapes and sizes, but highlighting a few examples allows for discussion of ways to manage the distributor-manufacturer-customer relationship.
Customer Won’t Divulge Details
The end-user wanted a product for lifting and tilting three different items. They requested CAD drawings of the product to determine themselves if it would work. After signing a non-disclosure agreement, the manufacturer provided the drawings. Once they were ready to place an order for a prototype, the manufacturer involved the local preferred dealer.
The end-user patterned their design after the manufacturer’s product but had many special requirements. The customer would not reveal any details of their application, so the manufacturer was unable to help with the design work. It was simply shown what to build based on the customer’s drawings. After receiving a purchase order from the dealer, the manufacturer built the items as specified. After the customer received them, they gave feedback and asked for changes to the design; the manufacturer obliged them and reworked the units accordingly. The units were sent out and again came back with more requests for changes.
It is very frustrating to both the distributor and manufacturer when the end-user refuses to divulge information or refuses to accept advice. The distributor-manufacturer relationship was stressed due to the units being reworked so often. The many design changes constantly required more quotes, and it became a challenge for both the manufacturer and distributor to keep up. Clear communication is essential in these circumstances. Involve the customer as much as possible to develop trust so they become more willing to open up.
Customer Expectations Are Unreasonable
An end-user purchased a product and was unhappy with a particular attribute. The end-user passionately complained to the local dealer, who was sympathetic to their appeal. The dealer, in turn, contacted the manufacturer to relay the zealous complaint, not realizing that the end-user’s expectations were unreasonable. Through clear communication among the end-user, dealer and manufacturer, the issues were worked out to a reasonable solution.
It can be tempting for a manufacturer in these situations to simply tell the dealer the end-user’s expectations are unreasonable so the dealer needs to take care of the problem. This approach may work for the dealer as well. In this situation, however, the end-user was a significant customer to the dealer. A big-picture approach is necessary to see that putting the dealer in a difficult situation will only result in losses against future sales. We like to call this the “give a damn” approach. Put the needs of your dealer and their customer first. They will appreciate your discretion.
Customer Requirements Keep Changing
An end-user purchased a standard product which they significantly modified to conform to their unique manufacturing process. They asked if the manufacturer could duplicate their custom unit. After reviewing the details, the manufacturer decided to move forward with the project and reached out to the local preferred dealer.
The project quickly became much more detailed than originally expected and grew in complexity. A fourth party became involved to source the control package as the complexity grew beyond the original scope. After several quotes were revised, the cost of the project grew as well as the amount of time that the manufacturer and distributor had invested into the project. It was decided by the manufacturer and distributor that further design changes and subsequent quotes would be met with increased pricing to cover the expenses of the parties involved.
The end-user balked at first but eventually accepted the increased pricing. They quickly stopped making design changes. Scope creep is a common problem—not just in our industry but throughout the business world. One of the keys to dealing with the situation is to treat all parties involved with respect and maintain open lines of communication. It is tempting in these situations to ignore or postpone the situation, but this ultimately makes the problem worse.
These are only a few examples of difficult customers. Through disciplined partnership between the distributor and manufacturer, a mutually beneficial conclusion can be reached for both parties and, most important, for the customer.
|Meet the Author
Nathan Andrews is vice president of Morse Manufacturing Company, located in East Syracuse, New York, and on the Web at www.morsemfgco.com.