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Question Of The Month
By: Staff
Issue: 2007nov
QUESTION OF THE MONTH
A SUPPLIER ASKS:“One of my distributors asked me to go on an end-user call with her. I did and showed a product the end user liked. Later in the week, another distributor called me and claimed she “owned” that end-user account so she should be told what was shown, receive samples and know the price discussed. Do I work with and support the first or second distributor or both? What would you do?”
DALE LIMES, MAS
SENIOR VICE PRESIDENT OF SALES
HALO/LEE WAYNE CORPORATION
UPIC: LEEWAYNE
Nobody owns a client relationship unless there is an exclusive contract. Even then, it’s up to the buyer to honor the agreement—not other distributors. The dilemma for this supplier is how to communicate this without offending a valuable customer. Ask, “If I went in on the call with you, then the other distributor called and said the same thing to me, how would you expect me to answer?” The shoe-on-the-other-foot scenario should get the message across.
If this doesn’t work, explain the sanctity of our supply chain—that distributors, not end buyers, are customers to suppliers. To abuse this by supplying information presented by a distributor to another distributor is an ethical bridge that cannot be crossed.
JOEL SCHAFFER, MAS
CEO
SOUND LINE, LLC
UPIC: 1SOUNDLN
There’s a moral and legal question here. I’d leave the legal issue up to your lawyers. From the moral side, I’d give the advantage to the distributor who took you in. I’d also give a heads up to your real partner in this sale and let them figure out how to get the sale with you. This is no less a service you’d give to the other guy if he or she was the one who brought you in.
Years ago, in a similar situation, I declined working with two other distributors after I went in on a sales call and stirred the pot of interest. The buyer asked the others to bid and identified me as the source. Since it was a custom product and I was not bound to give a price to any other distributor. I chose to protect the one who brought me to the dance. The buyer chastised me for not giving others the pricing. I explained our distribution policy and how important it was for us to be loyal. She accepted the argument, and I got the order.
The more buyers get away with this behavior, the more we lose control of our distribution channels.
ALLAN H. CHASE, MAS
CEO
ARC PROMOTIONAL DESIGN
UPIC: ARCPROMO
I understand there is pressure for suppliers to be even-handed when dealing with distributors, but this one is easy. You work with distributor No. 1 and explain to distributor No. 2 that another distributor invited you on the sales call, and anything discussed is confidential. You explain that you would extend the same respect had distributor No. 2 invited you on the call. Distributors who don’t understand this are detriments to the industry.
JIM DOYLE
PRESIDENT
POSITIVE IMPRESSIONS INC.
UPIC: POSIMPThe distributor who owns the client has no business asking about this sales call. If he or she owned the client, this issue would never have come up. In order to truly protect the supplier/distributor model, suppliers should never share discussions or transactions with competing distributors. It is grossly unfair to put a demand like this on a supplier you count on and respect.
MARSHA LONDE
CEO
TANGO PARTNERS
Clearly distributor No. 2 does not own the end-user account since the account chose to allow distributor No. 1 to present. If distributor No. 2 is so certain she owns the account, she can ask her property, the client, for details. She has access to the supplier’s line; let her select what she’d show the client.
Doctors don’t have patients; patients choose their doctors. No one owns a client; the clients determine with whom they’ll do business. Distributor No. 1 chose to partner with a supplier—a smart decision. Why would that supplier now chance offending this good distributor to accommodate a demanding and irrational one?
ROD FRENCH, MAS
PRESIDENT
SALES PROMOTION IDEAS, INC.
UPIC: SPIPROMO
Stick with the one who brought you to the dance. Distributor No. 1, who set up the end- user call, obviously had enough contacts to get the meeting, which suggests distributor No. 2’s claim to own the account might be an exaggeration.
The end user certainly is free to tell distributor No. 2 what took place at the meeting. This is the same end user who decides who they see and who they buy from—even if distributors wish it were otherwise.
TERRY NEWMAN, MAS
PRESIDENT
THE NEWMAN GROUP
UPIC: NEWIDEAS
I own all the orders I sell until clients elect to place them elsewhere. Is this the state we are in, when distributors can claim ownership of an accounts? Would end users tell who owns them? Tell the distributor to get a better understanding of our industry.
PAULA S. GOSSETT, MAS
PROMOTIONAL CONSULTANT/ACCOUNT EXECUTIVE
BROWN & BIGELOW
UPIC: BROW0001No one owns an account. If distributor No. 1 can secure a meeting with the client, then distributor No. 2 should be ashamed. Distributor No. 2 should take a lesson from distributor No. 1 by creating partnerships with suppliers and proactively setting up presentations.
As a supplier, you should return the trust distributor No. 1 placed in you by bringing you into that account and give them an exclusive for that particular item at that particular account.
ROBERT L. JOSEPH
VICE PRESIDENT
IDEAS FOR YOU, INC.
UPIC: IDEAS4U
No one in this industry owns any client, no matter what their relationship or how long he or she has been dealing with that client. The only exception would be when there is an exclusive contract between the parties that states that the distributor is the sole and exclusive distributor for the client.
The supplier should support distributor No. 1 with whom he or she first made the presentation. No information needs be disclosed to distributor No. 2. If it truly owns the client, the client will willingly tell it all about the meeting’s details.
KAREN FOLEY
VICE PRESIDENT
FOLEY ENTERPRISES, INC.
UPIC: FOLEY
Although distributors like to think we own our clients, they’re free to buy from whichever distributor they choose. We don’t own them. The supplier should work with the distributor who asked for his help with the end user.
QUESTION OF THE MONTH
A DISTRIBUTOR ASKS:“A supplier billed me $300 for additional shipping and handling 45 days after I received the initial invoices. I had already charged my clients for the jobs, and most of the invoices had already been paid. When I called the supplier to find out what happened, he said there was a glitch in the system and nobody was charged properly. He explained that the invoices I recently received were for freight charges that should have been billed from the beginning. I apparently “owe” the supplier for these charges, but I have no way to bill it to my clients. What would you do?”
WHAT’S YOUR ANSWER? E-mail answers along with your name, title and company name to Question@ppa.org by November 30 for possible inclusion in the February 2008 issue of PPB magazine.
ONLINE EXLUSIVES:
JIM CUSTER, MAS
CEO
RESULTS BY OBJECTIVE INTERNATIONAL, INC.
UPIC: ROI
It is very arrogant to say you own any account. If distributor No. 2 showed 51 percent of the voting stock of the client company, it may have a point. Otherwise, the first line is accurate.
Ethics would say too bad for distributor No. 2, and for the supplier to honor your relationship to distributor No. 1, since there may have been some value-added creativity by them.
Distributor No. 2 should focus on where it can add value to the client’s business. I hope the client will have high ethics and respect the integrity of working with a value-added distributor and not shop the item. It would help the client in the long run to have the best ideas and reward the provider of those ideas.
GARY M. MURPHY, CAS
PRESIDENT
IMAGE WEST
UPIC: IMAG0007
You should politely inform distributor No. 2 that nobody owns an account. Don’t discuss the conversation and further particulars from the meeting. If distributor No. 2 had such a strong position with the account, this possibility would/should have never manifested itself.
TED PENDLEBURY
SALES
GEIGER WEST
UPIC: geiger
The supplier cannot ethically discuss or divulge what went on in the first meeting. If there’s a problem, it’s between the two distributors. If distributor No. 2 asks the supplier for an end-user call, for pricing or for anything above-board, there’s nothing wrong with the supplier working with him or her.
Is it ethical for the supplier to let distributor No. 1 know that distributor No. 2 is making such claims, or does he keep quiet? I suggest he keeps it to himself.
DAN NELIS
OWNER
PROMOTIONAL PRODUCTS, ETC.
UPIC: STOR9283
I’m surprised the supplier didn’t suggest distributor No. 2 call distributor No. 1. How silly to think that anyone owns an end user.
HOWARD GREENBERG, CAS
VICE PRESIDENT
HLG PROMOTIONS PLUS, INC.
UPIC: HLGPROMO
You were an unknown entity with no chance of success with this account except for the distributor who brought you in. You owe your allegiance to that distributor. If the account belongs to the other distributor, let him figure it out. Just because there are other character-deprived people in business doesn’t mean you must be too.
TOM WELLER, MAS
PRESIDENT
RED OAK ADVERTISING
UPIC: ADVSPECS
If a distributor owned an account, the customer would mention that they had an exclusive agreement. The distributor who took you into the account would have been aware of the situation. If the customer was receptive to the presentation, work with the distributor who took you in on the call.
JOSEPH G. SCOTT, MAS
VICE PRESIDENT
SCOTT & ASSOCIATES, INC.
UPIC: SCOTTASC
As a promotional consultant, I expect my supplier partners to not divulge my product ideas. If the other promotional consultant actually owned the account, the opportunity would not have existed for someone else.
TERRY MULLIGAN
OWNER
MULLIGAN MARKETING GROUP INC.
UPIC: MULL0001
No one owns accounts. The supplier may tell distributor No. 2 what went on at the meeting, but they’re not obligated to do so. And I am a distributor.
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