“… till death do you part,” said the priest to the just-married couple.
It does not matter which religion you are. Marriage symbolizes the declaration of love between two people that are willing to commit to their union for the rest of their lives.
Marriage relationships have seven known stages:
1. The Honeymoon stage. It is characterized by passion and strong feelings of romance. Sadly, this stage passes quickly.
2. The Realization stage. The couple learn things they might not have known about their spouse’s strengths, weaknesses, and personal habits. Conflicts occur and differences become visible.
3. The Rebellion stage. Self-interest overtakes marital interest. You both believe you’re right and you feel the desire to want to change your partner.
4. The Cooperation stage. You realize that it takes hard work to make marriages happy and stable. There is a lot at stake — mortgage, kids, and careers, all resulting in a distance between the couple that can cause the marriage to feel more like a business partnership.
5. The Reunion stage. The children have grown, your careers are solid, and finances are no longer an issue in your marriage. So, theoretically, there is no room for conflict.
6. The Explosion stage. The “Empty Nest Syndrome”. Events such as a job loss, parents’ declining condition and death, and your own health issues can cause a desire to escape.
7. The Fulfilment stage. If you’ve made it to 35+ years of marriage — Congratulations! You have survived some of the toughest challenges in life, and remained strong and committed to each other.
Okay. Now, after realizing in which stage of the journey you are… Or, if you’re thinking about getting married… Or you didn’t survive and got divorced… Let’s take this discussion to the business arena.
When talking about marriage, it always reminds me of the manufacturer-distributor relationship.
At first, you work very hard together to get the first few sales, but once you pass this phase and your brand gets traction, you are both on a roll. Honeymoon!
As you go along, when both sides try to win market share while maximizing their profit margins, your relationship is always at risk.
After a few years, once you achieve considerable market share, you see year-over-year growth, you get return sales, and introduce new features to stay ahead of the game. Things are stable in a sustaining mode.
But nothing lasts forever.
Your distributor may lose interest in your brand due to a shift of focus, dealing with a new brand that generates more revenue. As a result, you’ll see a gradual drop in quarter-to-quarter sales.
It can be a drastic change that leads to a crisis like a change of ownership in one of the sides, a change of regulation that impacts your product, or even a price war.
Like a broken marriage, divorcing your distributor takes time, needs careful planning, and takes its toll. There are assets in a stake that need to be addressed.
The two most important assets to take care of are:
1. Your local legal representative and regulatory approval.
Normally, the manufacturer holds a regulatory clearance with FDA and CE approval. But in other countries, there is a choice whether you or your distributor will apply and hold the Regulatory approval.
Even if you predefine it in the distribution agreement, a regulatory approval transfer is very hard to accomplish.
It is recommended that, in order to mitigate this problem, you, the manufacturer, apply and hold the regulatory approval of your product. Yes, it costs money and may involve a third party, but it’s worth it.
2. Customers.
These are the “kids” in the divorce story. On the one hand, they “belong” to the distributor, but, on the other hand, they’ve already got used to working with your brand. And it is in your interest that they keep using it, going forward.
For this reason, distributors are always reluctant to give away their customer base. You, the manufacturer, have different ways to address that, and have direct contact with your end-users:
– Events and webinars are a good way to collect customer information.
– Licensing your product.
– Installation reports as a precondition to receiving a manufacturer warranty for your product.
– Placement or rental agreements.
– Certain technical support tasks that can only be done by the manufacturer, such as software upgrades.
Don’t get me wrong — saving your ‘marriage’ should always be your top priority. This is always true, whether with your spouse or with your business partners.
But if you both reach the Point of No Return, do everything you can to break away in a friendly manner.
I know. It’s super hard, but achievable. I know this from personal experience.