For a dealer program to be considered successful it must result in a “win-win” environment. Dealer programs seen as a “failure” have a typical flaw: they are incredibly one sided, and generally to the benefit of the vendor or initiator.

In the win-win situation the vendor or program initiator expects to receive additional distribution, system installation and service capability, use of excess monitoring capacity, spread of brand name, rigid or fanatical devotion to the corporate identity or to close a territory option to a competitor. The dealer hopes to receive lower cost product, better quality of monitoring, the recognition of a brand name for credibility, access to training, leads that result in sales, financing of sold contracts, and the intangible aspect of belonging.

When neither side gets what they want the program is a total failure. The dealer must consider prioritization of no more than two or three factors that are essential in a contractual relationship with an expected business result and the initiator should reduce their expectations to the two or three issues of greatest benefit to focus their attention upon as well. The dealer must be prepared to follow the program rules if they wish to remain a member. This is quite often the most difficult challenge for the independent entrepreneurial dealer. The program initiator must be willing to listen to what dealers are presenting or requesting, which might require modifying the initial priorities. For the program to be successful, both sides must feel they are reaching some of their objectives and be willing to concede a portion to compromise for mutual benefit.

My advice for dealers considering joining a dealer program is:

1 Demand to see and read all documents and contracts. Have a lawyer review them for you if you don’t understand actual or possible implications. Remember, the vendor or initiator will be entitled to hold you to terms of the signed contract

2 Know what you’re going to get: reduced price products, monitoring services, identity sharing, access to training, image and marketing materials, ability to attend special meetings, etc. Know what you’re not going to get as well – specific products, identity, etc.

3 Will there be sales quotas? Will they be units, dollars, response time, etc.? Who will be doing the measuring and when? Are the projected quantities realistic in your business and market environment? Failure to perform can be seen as a breach of the agreement.

4 Understand which are voluntary and which are mandatory. Know what the penalties are and how or when they will be enforced. Will you be given time to bring results into an acceptable range, can you negotiate reduced levels of performance or is termination the only option?

5 Know what you must comply with relative to use of name, identity, image as an affiliate and be sure you are comfortable with giving up or modifying the use of your own. This is commonly the most demanding issue for the vendor as they are very sensitive toward improper representation of their name and reputation. Corporate brand names are very closely controlled and enforced; don’t expect to be creative.

6 To get maximum value be prepared to participate in training, industry activities, dealer meetings, etc., as a member of the program. This should be one of the primary reasons for going into a program to begin with so participate.

7 Meet as many people in the structure of the program as possible. Be comfortable with them. Can you trust them? Do you feel comfortable with them outside of the business relationship in a social situation, such as a dealer reward trip or program? Speak with other program members or participants to get their feelings.