There is clear evidence, from many sectors, that dealers who use strong supplier brands in their sales and marketing tend to do well.  

Orange, for example, found that in towns where there was an Orange retail store, sales of Orange products were higher than in towns where Orange did not have a presence. Interestingly, it found that phone dealers located near the Orange store also tended to sell disproportionately more Orange products.

Take another example. Working with a large supplier of surveying equipment, I  found that a dealer which wrapped itself in its supplier brand saw sales grow more than fourfold in three years and achieved higher than average profitability.

Or look at the automotive industry.  BMW has followed a long-term strategy of getting its dealers to subsume their own identity, and to present themselves as part of the BMW brand experience. This tight, Teutonic brand control occasionally irks BMW dealers, but they put up with it because they know that their margins, thanks to the power of the brand, are the highest enjoyed in the industry.

However, many dealers are loath to use their main supplier’s brand. I recently came across a case where a dealer was pitching for a $1 million order. Some 80% of this was product from one manufacturer and most of the rest was dependent service revenue. Yet the dealer did not even show the supplier’s brand in the pitch.

So how can you get your dealer channel to include and use your brand?

A good starting point is to sit them down and objectively do the maths with them. Here is a formula I used recently to persuade a dealer network to wrap itself in the manufacturer’s brand:

• Estimate the percentage of your total revenue from product sales, A.
• Add to this number, the percentage of your product sales which comes from the main supplier, B.
• Estimate the percentage of the rest of your product sales which is dependent upon the sale of product from the main supplier and add this, C.
• Estimate what percentage of your services revenue comes directly or indirectly from main supplier product, add this, D.
• Finally do the sum A + B + C + D ÷ 4.

Then refer them to the diagram (see below).

Let’s assume they end up in the 60% plus window.  I find that what often follows is a frank discussion.  Maybe you, as the supplier, need to admit that being this dependent has its drawbacks, as well as its advantages for dealers. You can mull these through with them and then suggest that, as they are in this position, why not take advantage of the upside and use a powerful supplier brand to build their credibility and win new customers?

In my experience what really electrifies them is if you can bring up an example of a dealer who has done precisely this, and who, as a direct result, has enjoyed huge success. 

Dealer resistance to all this will vary from sector to sector and industry to industry. I was recently working for a heavy engineering client whose dealer chain couldn’t wait to exploit the supplier brand, as this was the strategy that the supplier’s largest competitor had adopted long ago.  In other industries there may be more resistance.  But even in industries where resellers have resolutely maintained their independence, such as IT, a very large number of dealers have built their business on an Oracle, a Cisco or an IBM.  They could be a lot more effective if they were prepared to unleash the brand power behind such names.