RTM: Your reseller channel in Europe has changed completely in the last four years, hasn’t it?

CR: Yes. In 2000 Trimble acquired Spectra Precision resulting in over 500 resellers selling into the surveying and construction markets in Europe. Of course, most of them only understood part of the enlarged Trimble-Spectra portfolio, most were non-exclusive and a lot of them were quite small. 

RTM: Sounds a familiar picture!  Were most of the resellers’ running lifestyle businesses?

CR: A lot of them were. There was a mix of older style resellers  used to serving an established user base with more traditional products and services, who were perhaps less keen on finding new customers; and an entrepreneurial group with a more youthful mindset.  

RTM: Some suppliers would see this sort of diversity as a good thing. They would argue that it enables you to properly cover the waterfront.

CR: I’d argue the exact opposite!  We had little idea of their real skills or market segments. All of which meant that our market knowledge was limited. We couldn’t drill down and do any serious comparisons between resellers within a country or between countries. This meant that we had little idea of where we might have gaps and weaknesses. To cap it all, we also had a mixed business with some direct selling in a number of European countries .

I think having a diverse range of partners also makes it hard to build any real traction with them. If they all behave differently, and perceive you as a supplier in a different way, then account management is much harder. And it is impossible to expect them to project a consistent image of your brand to the market.

Running distribution on this scale is a major investment. And, with such a diverse mix of capabilities and attitudes, it is certain that a fair proportion of this was not targeted optimally.

RTM: So how did you benchmark them?

"We had little idea of their real skills or market segments."

CR: Well it was fairly rigorous with a lot of elements. It covered everything from the resellers’ financial history, credit status and payment behaviour through to who their people were, their skill sets and levels of training. We took a very detailed look at which market segments they were selling into and with which products.  By default, we also gained a clear picture of what they were not selling within their portfolio, and of which market segments were not being addressed. We also had a history so we could look at their own objectives setting and how they performed against their plans. We could also look at the history to see how aligned they were to Trimble.

RTM: I suppose you looked at their skills level.

CR: Yes, and in depth. We analysed the personnel within each reseller organisation as to their capabilities and skills in areas such as sales management, solutions demonstration,  technical support and service. Some of this was subjective, some was objective.

We also analysed their marketing activities, looking at everything from planning, investment and follow through. We were particularly interested in how they projected themselves and our brand.

CR: Based on face-to-face interviews with their management teams, we compiled a SWOT analysis – strengths, weaknesses, opportunities and threats - for that organisation in the marketplace.  And we also sought to really understand how we fitted into their objectives and market segments. This data was particularly helpful to our national, regional and European  sales mangers as it brought clarity in a very rigorous way.

RTM: So how did you use this process to compare them?

CR: We assigned values to each of the core elements: their sales capability, the segments they covered, their marketing capabilities and ambitions, their training and support status, their financial capability and the SWOT. So you would end up with a mark out of 100 for each reseller.

RTM: And you took it further than that?

CR: Yes, we wanted to score them at a more subjective level. Here we looked at alignment/cooperation and what we called quality.

So, on the former, they were grouped into four broad categories. Firstly, those who understood our products but had no real commitment, secondly, those who actively promoted and sold our brand,  thirdly, those who engaged in business planning at least one year ahead, and, finally, those who engaged very proactively with Trimble on their current and future business strategy.
By quality we meant: the quality of their management, whether they really did the things they said they would do and whether they were managing their business effectively.
 
RTM: So were you able to start doing international comparisons?

CR: Well yes, but cautiously. We ranked the top 40 resellers into four quartiles and we carefully assessed how they were being scored. It might be that, say, a northern European Trimble manager was scoring high, whilst a southern European manager scored low. 

RTM: It all sounds a very time consuming and intrusive process.

CR: It was certainly time consuming!  We operated it tentatively in one region in late 2003 and then rolled it out across the rest of Europe during the middle half of 2004. Trialling allowed us to gauge how best to approach and work with the resellers to obtain quality input. We were concerned at the very start as to how the whole process would be accepted. In the end, when they saw value to themselves in rationalising and documenting this information it was a very cooperative project.

RTM: So what did they get out of the process?
 
CR: We learnt that we needed to be pretty open with people to develop their trust. And, to get this, you have to deliver to the resellers information as well as the usual expectations of great products, appropriate discounts, excellent customer fulfilment and after sales support.

Basically, we give the senior sales manager or managing director the majority of sales information that we have that relates to his business. For example, we provide a weekly update to dealers. This includes a list of exactly what they purchased in each week in detail, exactly what orders are on the system, and any product difficulties with deliveries (order by order), along with a calendar month summary that builds through the year. We also list their engagement with us on support and service queries and their order status. 
So the reseller managers have a clear picture of issues which might affect their business, such as how they are doing against target, how many orders have been placed, how many technical queries their staff  have put in, etc.  This is something they value very strongly because most of them can’t get this from their own organisations.

RTM: How do you use these findings across Europe? 

"We took a very detailed look at which market segments they were selling into and with which products." 

CR: We compare and check one country’s breakdown with another.  Why are different market segments being addressed in some countries and not in others? Does this reflect the market or the resellers’ comfort zone?  Are we addressing all the segments in each country that we can?  Often, market segment coverage is related to capability and confidence, and, with some focused training, we can open up the horizons.  In 2004 we engaged a specific training program in sales process which has been widely taken up by our resellers and has improved confidence. 

RTM: So how has the reseller base changed?

CR: Since 2000 we have reduced our resellers significantly. Now we have around 120 across Europe. As a direct result of the benchmarking process we have slimmed down a little more. Actual cancellations were minimal – less than ten of significance. The vast majority of those who departed just decided that this market was not the future for them. Some smaller resellers merged to form larger organisations, some became sub-dealers. We sold sections of our direct business to some to create larger businesses.

We encouraged mergers, as we need partners who have sufficient critical mass and financial backing to handle our more complex products and to build local solutions.  Overall, the whole process was surprisingly friendly. We based it on a lot of communication over 2-3 years.

RTM: So what are the real benefits of benchmarking?

CR: I believe that there is a significantly higher degree of trust as a direct result of the necessity to be open and honest.  An interesting outcome is that we all now speak the same business language, both internally with our own teams, and externally with the resellers. 

A major benefit is that we have much better market visibility at a European level internally.  Four years ago it was very hard for the European management team to have a clear picture of what was really going on in each region. Now we can produce serious, actionable business plans attacking real market segments. This means that we now focus on the right resellers to develop their capability, competence and skills, not only in existing markets, but also for new market opportunities.

RTM: And sales are up?

CR: Yes. It would be nice to attribute this to better benchmarking, but it is, of course, only a part of the overall developments we are implementing. Certainly, it is true that we clearly know who is selling what products to which market segments. We also know where the opportunities are by segment and territory, and that we are working with partners who have the desire, the competence and the financial strength to grow.

It has given us the precise data we need for decision making.