September 22, 2016

Communications With Authorized Sellers and Customers Key to Enforcement Program


As stated in a recent post, we recommend that companies adopt a three-step approach to tackle unauthorized online sales. Not only will the brand owner benefit but authorized sellers and customers benefit as well.

Step one is to revise company policies, procedures, and agreements. Step two is to implement a graduated enforcement system designed to actually crack down on and stop the unauthorized sales.

Finally, step three—the focus of this post—is to create and implement a communications strategy targeting both authorized sellers and customers.

Communication with authorized sellers

For companies actively working to stop unauthorized online sales, it is beneficial to be candid with their authorized distributors about their enforcement efforts.

Obviously one of the main issues with unauthorized sellers is that they cut into authorized sellers’ sales. However, they can also upset the authorized sellers such that they might try to negotiate lower prices or ignore minimum advertised price policies (MAP policies).

Thus, it is likely in the best interests of a company to communicate to its authorized sellers that (and how) the company is actively working to protect them.

Companies should reiterate their commitment to aggressively identify, stop and remove unauthorized sellers. This might include providing specific details of the actions they are taking to stop these sellers and protect their own authorized sellers.

It is also helpful to share data (i.e. measurable results) from the enforcement program.

A company can also demonstrate that a small number of one-off sellers are not materially impacting sales.

Communication with customers

There is also a lot of benefit to communicating to customers the issues associated with buying products from unauthorized sellers.

Specifically, it is important to communicate that going through unauthorized sellers is simply not a reliable method of purchasing the company’s products:

For instance, the products might not come with certain services and benefits; they likely lack quality controls, and products purchased through unauthorized sellers could very well be damaged, expired, altered, counterfeit or possibly dangerous (depending, of course, on the type product).

Communications—whether to sellers, customers or both—can take on a variety of forms. For example: press releases, emails, presentations at distributor meetings, videos, talking points for sales representatives or guarantees or anti-diversion policies published on a company’s website.

In sum, a company that invests the time and money to aggressively stop unauthorized sales should not overlook this key step of communicating its efforts to its authorized sellers and customers.

It is certainly important to educate both groups. But it is particularly key for a company to ensure that it is keeping its authorized distributors happy and aware of the steps the company is taking to protect them.