Question

Topic: Research/Metrics

Distributor Retention Rate Determination

Posted by Anonymous on 8/5/2008 at 9:24 AM ET 250 Points
I want to determine the retention and penetration rate of our distributors (B2B Safety, security and product identification). To what extend a distributor maintains our market share compared to his total sales and to comparable / competitive products. I was thinking: our sales related to the total sales for a given period combined with our sales compared to competitive products and sales of all safety and security id compared to the total sales. In this way I can see the changes in absolute and relative figures. But this seems rather simple. Is there a more scientific method or formula?
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RESPONSES

  • Posted by Frank Hurtte on 8/5/2008 at 9:50 AM Member
    Pieter,
    I believe you are onto something with the formulas.

    Here are a couple of additional thoughts:
    1) Many distributors hold their numbers pretty close to the vest. You may not get accurate reporting on the competitive products portion of your equation.
    2) Many of the small and mid-sized safety distributors aren't all that good about about categorizing their product sales. (Strange but true) You may need to provide them with some help - especially with larger manufacturer-competitors who make products that cross over a couple of categories.
    3) Many manufacturers have found it worth while to incent their distributors for actions like; using your product as the lead line, only displaying your product at their sales counter, and eliminating marginal brands. This is usually done via rebate.

    Good luck with your work... if I can provide additional help knowledge based distribution is my strength.
  • Posted by Peter (henna gaijin) on 8/10/2008 at 10:44 PM Accepted
    As said above, distributors probably won't readily provide this data.

    If it is a retail location, you can get a feel for how much share you have by looking at what sort of share of their retail space your product gets. Retailers generally will display the more popular products with more space. Of course, this isn't totally accurate, as suppliers can pay for better placement.

    One way to get an this number would be to survey the customers of the distributor to find out what they are using. This will also tell you how that distributor is doing as compared to other distributors the customers can go to for these products/services.
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