Choosing the right distributor or channel partner is one of the most important decisions when entering a new market. A strong partner can accelerate growth, build local credibility, and open doors that would otherwise take years to access. But what happens when that partner begins to underperform? In Sweden, where trust, long-term relationships, and business reputation are highly valued, handling such a situation requires both tact and strategy.
Many companies hesitate to act, fearing they will lose market access if they confront or replace a partner. However, allowing underperformance to continue can damage your brand, weaken customer relationships, and limit long-term growth. Here is a step-by-step approach to addressing this challenge effectively.
1. Diagnose the Root Cause
Before taking action, it’s important to understand why your partner is underperforming. In Sweden, the reasons are often more complex than simple lack of effort.
- Market fit: The partner may not have the right network or industry connections for your product.
- Incentives: Commission structures or margins may not be motivating enough to prioritize your brand.
- Resources: Your partner might lack the sales team, technical knowledge, or marketing capacity needed to support your product properly.
- Focus: They may be juggling too many competing brands, reducing the attention given to yours.
By clarifying the root cause, you can decide whether the issue can be solved through support and adjustments or if a more drastic change is needed.
2. Review the Agreement and Performance Metrics
Swedish business relationships are usually built on well-defined agreements. Reviewing the contract will help you understand both your expectations and their obligations.
- Did the agreement include clear sales targets and performance benchmarks?
- Are reporting requirements and communication routines being followed?
- Is there a clause covering exclusivity, termination, or performance-based reviews?
If your agreement is vague, it will be harder to enforce change. This highlights the importance of setting up strong contracts from the beginning with measurable goals and regular checkpoints.
3. Open Transparent Communication
Swedish business culture values openness, directness, and fairness. Avoiding confrontation may seem easier, but it usually leads to further underperformance. Instead, initiate a constructive conversation.
- Present your concerns based on data and facts, not assumptions.
- Invite your partner to explain their challenges in meeting agreed goals.
- Work together to identify practical adjustments, such as training, co-marketing support, or revised incentives.
Often, underperformance can be improved when the partner feels supported rather than accused.
4. Provide Targeted Support
Sometimes the solution lies not in replacing the partner but in strengthening their ability to succeed. Consider whether your company can provide additional resources that address their weaknesses.
- Offer sales training to improve product knowledge and selling techniques.
- Invest in joint marketing campaigns to increase demand generation.
- Provide technical or customer support from your own team to fill capability gaps.
These initiatives not only improve short-term performance but also demonstrate your commitment to a long-term partnership.
5. Implement a Performance Review Period
If the situation does not improve, formalize the process by setting a defined review period. This gives your partner a fair chance to demonstrate change while protecting your interests.
- Agree on specific, measurable goals for the next 3–6 months.
- Document progress and hold regular review meetings.
- Make it clear what the consequences will be if targets are not met.
In Sweden, this structured and transparent approach will usually be respected, even if it eventually leads to ending the partnership.
6. Prepare an Exit Strategy
If performance continues to lag, you must be ready to act. Continuing with an underperforming distributor or channel partner can damage your market entry far more than replacing them.
- Review termination clauses in your contract carefully to avoid legal disputes.
- Identify alternative distributors or consider direct-to-market options.
- Ensure a transition plan to maintain customer service and brand presence during the switch.
Ending a relationship in Sweden should be done professionally and respectfully, preserving your company’s reputation and leaving the door open for future opportunities.
Turning Underperformance Into an Opportunity
An underperforming partner is not necessarily a dead end—it can be a chance to strengthen your market strategy. By diagnosing problems, reinforcing agreements, improving communication, and offering targeted support, many issues can be resolved. If not, replacing the partner may open new doors for growth and stability. The key is to act decisively, while respecting the values of transparency and fairness that define Swedish business culture.
Struggling with your distributor or channel partner? CE Sweden can help assess the situation, mediate improvements, or guide you through a smooth transition.
