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April 9, 2015

Best Practices for Distributor Relations: The Distributer Survey

Posted by under Business Advice

One thing that wineries can agree upon is the importance of their distributor relationships. Yet, negotiating the U.S. three-tier system has its share of obstacles, especially for small-to-midsize wineries. To help these wineries navigate the system, over the next several months, I’ll be publishing some of my insights as a wine industry consultant in a series of “Best Practices for Distributor Relations.” Our first topic: The Distributor Survey.

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Winery owners often are not on the same page with their distributor partners

When well thought out and reasonable sales goals are not being met, I find that it is often because winery owners and distributor executives are not on the same page. There is typically a lack of communication, direction and understanding between the two parties. This can result in products being sold versus brands being built.

Distributor’s unique perspective and risk avoidance strategy

Distributors deal with many brands and therefore have a unique perspective of how a market reacts to a brand. While this feedback could be incredibly useful to a winery owner, even when asked, distributors often are hesitant to share their observations and impressions with winery owners because they don’t want to jeopardize the relationship. A distributor’s impression of a brand will definitely influence their commitment to it.

Winery owners need all the facts so they can have a successful distributor relationship

Winery owners need reliable information about how their products are being received in the market to realize their full potential. Too often busy owners rely just on case sales, sales of competing brands or the impressions of their sales people for this information.

Distributor Survey: The information you need for results

One effective way for a winery to get invaluable information is for an experienced third party to ask a small set of trusted distributor executives about their brand performance and perceptions.

The interview often provides winery owners with:

  • Invaluable feedback on how the brand is being received by the marketplace,
  • Insight into the distributor’s level of commitment,
  • A channel for increased  and improved communication,
  • Feedback to ensure that the sales managers are presenting the information to the distributors as intended, and
  • A tool to measure the success of the sales and marketing approach.

Often I am asked why distributors are likely to share their honest feelings with a third party. Two factors are key:

  1. A guarantee of anonymity – this comes from being interviewed by an experienced neutral party and by combining the responses. Anonymity offers the distributors the freedom to speak their minds.
  2. A trusted interviewer – a good interviewer will have an appreciation for their responses and an understanding of the challenges distributors face, market knowledge, and often a familiarity with the people interviewed themselves.

A good interviewer, with the required expertise, will be able to translate feedback into both actions to improve brand performance and programs to overcome the winery’s challenges.

Distributor survey in action

As a consultant, I often am asked by my clients to find out why their brand is under-performing. I once worked with a small up-and-coming winery, who despite being told that “everything will be fine overtime” was not meeting their expected sales forecasts.

After finding that their sales and marketing plan was sound, we decided to initiate a distributor survey to better understand “the whys” of the problem. After interviewing key executives from their distributor network, I aggregated and analyzed the feedback.

We were able to distill that the winery owner and the distributors’ expectations were not in line. This was resulting in brand messaging not being communicated to the market the way the winery intended and the distributor selling the product on price versus a way that built loyalty with customers.

The next step was turning this knowledge base into specific actionable tactics. Ultimately, we were able to work with the winery and the distributors on communication and training issues that got to the heart of the problems, issues that would not have been apparent and resolved without having implemented the survey.

Palmateer Wine Group has developed an in-depth distributor survey and an approach for this initiative that has proven to be very successful. We would be happy to work with you on implementing a distributor survey.

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  • palmateer wine group
  • san rafael, ca
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