Miele and the merits of indirect sales

The white goods manufacturer ditched direct sales in its professional division - and achieved 17 consecutive years of growth.

by Adam Gale
Last Updated: 25 Jun 2018

There are all sorts of innovations you might associate with a manufacturer of dishwashers and washing machines. Something to do with valves, for instance, smart sensors or a funky electronic display.

But what about sales strategy?

 In 2001, Miele UK hired Les Marshall as sales and marketing director of its professional division (think laundry to hotels and care homes, dishwashers to pubs and restaurants). His mission was simple: transform the business from direct sales, which was how the company operated in other countries, to a partnership or dealer model.

Selling exclusively through dealers would bring with it obvious advantages – mainly access to hundreds of sales representatives and engineers, with local knowledge and relationships that would allow them to deliver better ongoing service than a remote head office. But it would also come with a risk – these partners would now carry Miele’s brand in their hands.

Marshall spent months out of the office, visiting potential partners, finding out what they would need to make this work. The dealers wanted help with finance and training, marketing and website design, but above all a commitment from Miele not to sell directly against them.

For his part he told them his terms too: partners would need to undergo Miele training, and commit to delivering full service during and after the sale.

After whittling the number down the number of dealers to about 40, Marshall invited them all to a meeting to launch the partnership.

‘I had representatives from a lead generation company, a finance company, a training company, our service trainers, about seven or eight speakers who could support these companies. At the end of the presentation, I knew that if everyone said thanks very much and walked out the door, I’d have failed.’

They didn’t walk out, and the partnership eventually grew to account for 80% of Miele’s professional sales, with the remainder being national accounts where it made sense to have a single point of contact.

Though the company won’t disclose divisional revenue, the now-retired Marshall says the professional division has grown every year since 2001. (A perusal of Companies House shows the overall UK business grew turnover from £57m in 2000 to £154m in 2016, with a predictable dip during the recession.)

The German parent company tried to copy the model in other countries, but largely found the dealer networks were either undeveloped or already in similar arrangements with other firms.

Marshall says the most important reason the strategy worked in the UK was that Miele kept to its word and never once sold against its partners. ‘Every now and again, a competitor of ours would call dealers together and try to copy the model. They’d give it a go for a few months, but then a nice lead would come into the office and rather than give it to the dealer they’d keep it, and the whole thing fell flat. You’ve got to be consistent.’

Image credit: Miele

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