In an Innosuisse project, the Bern University of Applied Sciences and the University of Applied Sciences Grisons investigated how digital tools and platforms can improve cooperation between exporters and international distribution partners. The aim was to optimise the selection, qualification, motivation and evaluation processes of distribution partner management. The project team developed an innovative consulting tool with which the export promotion organisation Switzerland Global Enterprise supports exporting companies

In today’s globalised and digitalised world, exporting is essential for many companies. In fact, many companies in Switzerland conduct a large part of their international business through international sales partners, especially if they are too small to set up their own sales offices abroad. However, the management of these partnerships causes difficulties for many companies. There is often a lack of a systematic approach to selecting partners, training of distributors is neglected and conflicting goals arise. These factors can lead to dissatisfaction and frustration among distribution partners, which can have a negative impact on business. In a survey of 155 Swiss SMEs, over 70% of the companies questioned rated the management of foreign distribution partners as a major challenge. Working with international distribution partners has several aspects that need to be taken into account. It is difficult to find partners with suitable expertise. In addition, they often show little commitment to the exporters’ products. Customer information is not shared, and staff turnover makes cooperation difficult. Cultural differences pose further hurdles. These challenges require a clearly structured process for working with distributors in order to overcome them successfully

Focus of the Innosuisse project

An Innosuisse project of the Bern University of Applied Sciences and the University of Applied Sciences Grisons focused on how the process of distributor management can be improved and how digital applications can contribute to optimising the four critical sub-processes – selection, qualification, motivation and evaluation of international partners (Figure 1). The project proposes a structured approach in which the company’s internationalisation strategy is analysed and thus the concrete requirements for the sales partners are elaborated. Central sub-processes were clarified through best practice examples and tools were developed to support companies in implementing the process

Figure 1: MIPd – Managing International Partnerships – The four sub-processes of sales partner management

Optimisation of the sub-processes of sales partner management

The first sub-process, the selection of distribution partners, includes the creation and refinement of candidate lists, the development of a business plan with the potential distribution partner and the conclusion of a cooperation agreement. The search for a partner can be both active and passive and includes the analysis of the internationalisation strategy and the definition of the division of tasks between exporter and distribution partners. Passive search means that potential distribution partners contact the company and the company checks the interested parties for their suitability as distribution partners. The selection of distribution partners is often a challenge, as companies resort to an unstructured selection, the cooperation with consultants is difficult and the insufficient definition of search criteria leads to undesired results. IT applications such as content marketing and marketing automation can play a crucial role by increasing the company’s visibility abroad and thus supporting the passive search for suitable distribution partners

Subsequently, the qualification and training of partners becomes important. Here, ‘pain points’ become apparent in the form of a lack of knowledge and skills among the sales partners as well as an unsystematic transfer of know-how. To optimise this process, a careful analysis of the division of tasks between exporter and distribution partner and a determination of training needs is necessary. E-learning platforms, augmented reality and virtual reality are examples of IT applications that can systematise the transfer of knowledge and thus facilitate the qualification of partners. Through these applications, partners can specifically deepen their knowledge of the exporter’s products, its sales strategies and market trends. In addition, augmented reality and virtual reality can be used to create realistic simulations of sales scenarios. Partners could thus gain hands-on experience and improve their sales skills without any direct impact on the actual business. Such technologies enable efficient and repeatable training that prepares the sales partner’s employees for successful cooperation and systematises the transfer of knowledge

The next step is to motivate the channel partners. A common stumbling block in this area is the insufficient proactive selling of partners because they usually represent the products of several suppliers. To optimise this, it is advisable to define clear objectives and plan targeted motivation measures. Here, IT applications such as e-commerce platforms and portals can promote motivation through suitable incentives and support the involvement of partners in the supplier’s sales process. An example of such an incentive is access to a broader customer base: by using e-commerce platforms and portals, distribution partners can gain access to a larger customer base. This can increase their sales opportunities and boost their motivation, as they have the potential to expand their reach and enter new markets. E-commerce also enables better transparency in the distribution process. Distributors gain access to real-time data on their sales figures, inventory levels and customer behaviour. This transparency enables them to monitor their performance and optimise it in a targeted manner. Another incentive is efficient order processing: the use of e-commerce platforms simplifies order processing and logistics processes. This means that distributors can work more efficiently and spend less time on administrative tasks. This allows them to focus more on sales and customer service

Finally, partner evaluation is an essential part of managing international distribution partnerships. Companies face the challenge of setting appropriate evaluation criteria and measuring the success of the partnership. By structuring and simplifying evaluation processes and criteria, IT applications such as an online NPS (Net Promoter Score) can help companies to effectively evaluate their partnerships and adjust them if necessary. It is important in this last step that it is a mutual evaluation and not solely the manufacturer in Switzerland evaluating its distribution partners abroad

Conclusion

By carefully optimising these four sub-processes with the support of digital applications, companies can significantly increase efficiency and effectiveness in managing their international distribution partners. The Innosuisse project demonstrates how the use of modern technologies and a strategic approach can significantly improve the cooperation between exporters and their international distribution partners, leading to higher customer satisfaction and ultimately to successful international business

More information

Research Group International Management

Institute of Marketing and Global Management at BFH Wirtschaft

Swiss Institute for Entrepreneurship at the UAS Graubünden