What are the current problems facing lubricant dealers? How to deal with it?

January 24, 2024

What are the current problems facing lubricant dealers? How to deal with it?

Lubricating oil dealer problems

In recent years, with the slowdown of economic growth and the transformation and upgrading of the manufacturing industry, the competition in the lubricant market has become increasingly fierce, and the more intense competition has made many problems in dealer management continue to emerge, which are mainly summarized in the following four aspects.

1. Imperfect dealer selection mechanism

Compared with foreign lubricating oil enterprise, our country lubricating oil enterprise has not established a perfect dealer selection mechanism, the evaluation on dealer selection, because of the lack of standardized and unified implementation standard and system, and still stays in the qualitative stage, it is too random to deal with, it will easily lead to the "humanization" management. Most lubricant companies do not carefully analyze the causes of market changes and find countermeasures, but hope to increase market sales by adding dealers, resulting in a relatively short period of time, it is impossible to carry out detailed understanding and research on the alternative dealers in the local market, only after visiting a few dealers, subjective haste to determine. In addition, some dealers who did not meet the company's requirements were hastily established as authorized dealers, which laid a hidden danger for the future development of the local lubricant market.

2. Insufficient training of dealers

With the continuous subdivision of the industry, more and more kinds of lubricating oil matching with it, more and more requirements for the sales personnel's abilities and qualities are becoming higher. However, due to the low late starting point for the development of lubricating oil industry in our country, the lack of compound talents who understand both product technology and marketing, has led to a serious shortage of training for dealers, so that the dealers can not learn excellent experience in the industry. Unable to learn lessons from the industry, unable to obtain the company's latest business philosophy and industry cutting-edge information, affecting the sales performance of dealers. In addition, some lubricant companies and dealers do not pay attention to training, resulting in training into work relaxation, can not guarantee the training effect.

3. There is a serious problem of the dealer's transshipment

Due to the fierce market competition, lubricant enterprises, especially well-known lubricant brands, have a large number of dealers in the same region in order to improve their market share, especially the nature of FMCG automotive lubricants, which determines that they must adopt intensive channel marketing strategies. On the one hand, due to the increasingly fierce competition in the lubricant market, the growth rate of the underwriting volume agreed between lubricant companies and dealers is often higher, and different rebate or promotional business policies will be implemented in different periods of the year according to the sales situation. During the promotion period, lubricant companies will encourage dealers to purchase more products and discount the purchase price of products in various forms. The discount range is generally different for different markets and customers. The difference in price and sales volume is the two direct reasons for dealers to take the initiative to sell goods, and the local dealers in order to regain the local market and complete the underwriting volume task. Will lower the selling price, loss of profit, if the profit has not been guaranteed, dealers will often give up the distribution right, seriously affecting the continued growth of the local market. On the other hand, lubricating oil enterprises on the behavior of "there is no law, law enforcement is not strict, violation of the law is not investigated", for example, some lubricating oil enterprises stipulated that the discovery of channeling goods will be the corresponding punishment for channeling dealers, but due to the difficulty of investigation and evidence collection, national anti-monopoly laws and regulations and other reasons, often the channeling behavior is not strictly investigated. In the current situation of increasingly frequent online sales activities, the phenomenon of dealers channeling goods is becoming more and more serious, which seriously affects the healthy development of the market and the normal operation of lubricant enterprises.

4. Lack of dealer evaluation system

One of the most important contents of the distributor management of lubricating oil enterprises is to conduct timely assessment and evaluation of distributors, which is not only closely related to the overall sales ability of lubricating oil enterprises, but also a large amount of information and data that can be obtained through assessment and evaluation. Through sorting and analyzing these data, the distributor structure and policies can be adjusted and modified to improve the overall channel efficiency. Enhance the vitality of the dealer system to achieve the survival of the fittest. At present, most lubricant companies either do not establish a dealer evaluation system, or use traditional dealer evaluation methods, such as giving subjective weights to evaluation indicators to give an overall evaluation of dealers. Although this method is simple and easy to use, the construction of evaluation rules is completely subject to the marketing management level of enterprises and the degree of cognition of dealers. It can not provide a good in-depth analysis of comprehensive performance, and there is a large subjectivity and arbitrariness in the assessment score, resulting in the evaluation results often difficult to objectively reflect the business status of dealers.

Dealer management countermeasures

Through the analysis of the above problems, we know that China's lubricating oil enterprise dealer management problems are mainly concentrated in the dealer selection mechanism, training system, channeling management and performance appraisal and evaluation of four aspects, the following will be in view of the above four aspects of the problem, put forward the corresponding countermeasures.

1. Improve the dealer selection mechanism

For the long-term healthy and sustainable development of the local market, various factors such as the comprehensive strength of the lubricant enterprise itself, marketing strategy, product line and the resources owned by the enterprise are the first things to be considered when choosing a distributor. For example, for domestic industrial lubricating oil leading enterprises, product variety, positioning and visibility, then direct sales to customers "terminal" dealers is the best choice. On the contrary, for domestic small and medium-sized private car oil and lubricant enterprises, the product variety is small, the grade and popularity is low, then the "wholesale" dealers may be more suitable for cooperation. On the contrary, only the qualitative judgment of dealers is to be avoided in the implementation of the selection and evaluation process, especially to avoid the influence of sales personnel's personal supervisor opinions on the evaluation of dealers is too large, interfering with the objective evaluation of dealers. Therefore, the development of a quantitative access evaluation system to conduct an objective and comprehensive evaluation of dealers has become the most important link in the development of the dealer selection system. In the actual sales, the dealer selection evaluation table can be developed, and the evaluation content can refer to the following seven aspects: The matching degree between the enterprise product policy and the distributor's sales mode, the distributor's understanding of the product, the distributor's expected degree of cooperation, the distributor's financial status and management level, the distributor's promotional policy and marketing technology, the distributor's warehousing and logistics capabilities, and the distributor's other comprehensive service capabilities. According to the above items, each candidate dealer is scored according to weight and weighted total score, so as to find the right dealer.

2. Establish dealer training system

Principles of dealer training system

To build an excellent dealer training system, we need to follow two basic principles, one is the systematic principle, dealers participate in countless kinds of training, but can leave a deep impression of few, the reason is that these training always in a certain point, lack of systematic, very scattered, so lubricant companies in promoting dealer training, The system should be put in the first place to avoid the waste of resources caused by scattered courses. Although lubricant enterprises provide free training for dealers, dealers also invest in human, material and financial resources, and lose the opportunity cost of developing business. The second is the practical principle, dealer training is different from theoretical research, so the training lecturer must be a market practical operation experience, in the front line of sales personnel rather than academic theoretical experts or scholars. Front-line sales personnel because of their rich practical experience and close to the market trading techniques and close to the living cases, in the training often can be closely combined with theory and practice, so as to be more guiding and educational significance, more popular with dealers. Lubricating oil enterprises can select the core backbone of clear thinking and first-class eloquence from the front-line sales personnel to form a training group, and regularly train dealers. Simulating some difficulties or problems that may be encountered in actual sales, conducting field simulation and "rehearsal" to solve the strategy and plan, and timely correcting and reviewing the shortcomings and problems in the exercise process are the key points to improve and perfect the current training content, to avoid the "one-word" and "spoon-feeding" training methods of the lecturer. Only the implementation of the systematic and practical principles of training can make the training have practical guidance and promotion significance in the sales actual combat, so that the training content can be transformed into the strategy and means of sales actual combat, and the sales performance can be effectively improved.

Dealer training system ladder

The distributor is an independent business organization with self-responsibility for profit and loss. The training system ladder of the lubricant company to the distributor should not be limited to the product. Specifically, after the distributor has mastered the company's product knowledge and solved the short-term sales problem, how to improve the operation efficiency of the organization, clear the future development direction, and how to develop in the long term has become a more important issue in the training. Specifically speaking, the first level is product, customer and sales skills knowledge training, the purpose is to let dealers deepen the understanding of the company's products, customer industry, improve sales skills, stimulate sales enthusiasm, so as to increase product sales in the short and medium term. The second level is the efficiency skills training, the purpose is to help dealers improve the organizational efficiency in personnel, logistics and financial management, and continue to increase product sales. The third level is the highest level of training, often only for the dealer's senior management, the purpose is to provide guidance and motivation for the long-term sustainable development of the dealer, clear future direction, to build core competitive advantages. Through the above multi-level training, it can not only improve the level of sales skills of dealers, but also greatly strengthen the closeness between lubricant enterprises and dealers.

3. Optimize dealer channeling management

Reasonable price system

The price system is the main aspect of the game between lubricant enterprises and distributors. The scientific price system can reflect the wisdom of lubricant enterprises' channel management. When designing the price system of lubricating oil enterprises, the most important thing is to reasonably design the product price difference from the customer level and product attributes, and the excessive price difference is often the root cause of channeling. Usually the design of the price system follows the following principles: First, the channel level increases from top to bottom, and the price difference increases successively, especially for automotive lubricants, the closer the dealer to the terminal, the higher the requirements for the price difference. Second, due to the different characteristics of direct selling customers and dealers, the price system should be formulated separately, usually the price of direct selling customers is lower than that of dealers, but the difference between the two is not easy to be too large. Third, the price gap of promotional products is determined according to product attributes and life cycle, but it is necessary to consider the principle that the price difference of similar products in similar regions should not be too large.

Promotion policy specification

When China's lubricating oil enterprises are facing the pressure of sales, in order to promote the sales of products, they often adopt annual and phased promotional policies, including direct price concessions, gifts, rebates, providing promotional expenses and other forms. Good promotional policies to promote the enthusiasm of dealers and sales to increase the role of huge, but in the sales practice, many companies due to ill-considered, often make this promotion into the immediate, regardless of the long-term behavior of killing the goose, such promotion is extremely harmful, but also the main reason for the goods. Therefore, in the promotion need to guard against: first, the price of direct profit margin is too large, the imbalance of regional prices lead to dealers to supply to the outport; Second, the first-level dealers will discount, rebate, marketing promotion fees and other promotional policies into price sales, or directly to the secondary dealers, only sales and not management, secondary dealers do not focus on direct sales and turn to product wholesale; Third, too many gifts lead to an increase in inventory, and dealers fold into the price of goods. In addition, the promotion policy is closely related to the business policy, without rigorous, reasonable and scientific business policy, the implementation of the promotion policy is difficult to guarantee.

Strict business policy

Business policy is not only the embodiment of the interests of dealers, but also the rules of behavior of dealers. Lubricating oil enterprises and dealers often agree on sales behavior through annual distribution agreements or purchase contracts, and clarify the purchase and sale price of products, the scope of sales, and the punishment of channeling goods. In order to prevent transshipment, lubricant enterprises must agree the following terms with dealers: First, whether to allow first-level distributor distribution, and the preconditions for distribution; The second is the distribution price, requiring first-level dealers shall not arbitrarily change the distribution price or use other ways to reduce the price of distribution; Third, lubricating oil enterprises and primary dealers, secondary dealers signed a tripartite agreement, primary and secondary dealers are clear and accurate to understand the flow of products, at any time for reference, it is clear that the primary dealer for the secondary dealer's cross-over behavior to bear joint and several liability; The fourth is to establish a regular inspection and inspection system and the identification and punishment system of channeling goods, and effectively punish channeling goods dealers in accordance with the requirements of the system, and compensate and appease the channeling goods dealers.

Realistic sales target

When formulating annual sales targets and business policies, lubricant companies usually formulate stepwise rebate policies according to the level of sales targets, and the better the completion, the higher the rebate. When the sales target is too high for the dealer to achieve, or when the market situation changes and the dealer is difficult to achieve the target, the dealer usually does not enjoy the rebate, and the rebate is usually calculated by the dealer into the operating cost, in order to obtain a high rebate and prove its sales strength to the lubricant company. To drive dealers to achieve sales targets by means of channeling goods, which is a very common phenomenon in the actual sales of lubricants.

The high sales target set by lubricant enterprises, sometimes not only can not motivate dealers, on the contrary, it will bring many side effects, which requires lubricant enterprises to fully understand the market and based on the reality of the market under the premise of setting sales targets, can not rush forward, set realistic and achievable goals, can not force dealers to underwriting volume indicators. Dealers often choose between not meeting targets and not signing agreements. After the indicator is developed, it does not mean that it can be completed. Lubricant enterprises and dealers should pay attention to the implementation of sales activities and the realization process of underwriting volume indicators. If the actual sales volume gap is large, the dealer's underwriting volume indicators can be analyzed and evaluated in the middle of the year, and the indicators need to be revised if necessary.

Trust and loyalty of manufacturers

The "integrity and loyalty" relationship between lubricant enterprises and distributors is the basis for the establishment of long-term and stable cooperation, but due to the interest game and human nature, the two sides often cannot give each other full trust and loyalty, the most direct manifestation of the destruction of trust and loyalty relationship is the behavior of transshipment, especially the malicious transshipment behavior doped with personal emotional factors is more destructive to the market order. The occurrence of malicious transshipment is often due to the lubricating oil enterprises can not control the behavior of transshipment in the market in a timely manner, can not deal with fair and just, ignore the report of transshipment or deal slowly; Of course, there are also dealer reasons, such as dealers do not believe that lubricant companies can deal with the phenomenon of evil by evil, contradictions between dealers or malicious market destruction, dealers are too profitable, dealers do not maintain the lubricant company brand and product image of the responsibility. In order to avoid the occurrence of such incidents, lubricant companies need to establish the concept of integrity and loyalty, treat all dealers equally, do a good job of dealer investigation, pay attention to dealer reputation, take commitments seriously, deal with problems in cooperation in a timely manner, and inform the other party even when they are unable to deal with the problem, and strive for each other's understanding. The relationship of mutual trust and loyalty between lubricant enterprises and distributors is the fundamental guarantee and basis for long-term cooperation between the two sides and jointly making the local market bigger and stronger.

4. Establish dealer performance evaluation methods

Lubricant enterprises can quantitatively investigate and evaluate the plan of adding or reducing channel members and optimizing channel structure through dealer performance evaluation, so as to improve the overall sales performance. There are many methods for dealer performance evaluation in management science, among which are more typical

Author:

Mr. James

E-mail:

sales@cn-lubricantadditive.com

Phone/WhatsApp:

+86 13783582233