A Vote for Small Firms


“No one shoe fits all.” That’s why whenever we hear from a manufacturer that he has specific criteria when selecting a new rep, we ask the inevitable question: “Why?”

One manufacturer that has been using reps for close to 75 years wasn’t going to budge from his belief that only small to mid-sized reps could do the job he was expecting. Here’s his reasoning: “Thankfully, we boast long tenure among our reps. We’ve got any number of firms that have been with us for more than 25 years. When the occasion does arise that we’ve got to replace someone, however, the first thing we look for is the two- to five-man operation. It’s been our experience with our products we manufacture and the markets we serve that the agencies that are on the smaller side tend to give us the attention we’re looking for. It’s not exactly the ‘big fish in the small pond’ philosophy; rather, it’s more like we’ve found these folks are great at establishing and maintaining relationships. That’s a talent that works well for us. Someone could try to prove me wrong, but we’ve got a lengthy track record of success to look back upon. I’m not changing until proven wrong.”

Working on the Relationship

The previous manufacturer’s comments regarding the length of tenure he enjoyed with many of his rep firms reminded us of a conversation with another manufacturer who volunteered some of the reasons why a rep and a manufacturer stay together for extended periods of time: “In my view, an extended period of time working together can be achieved when the manufacturer and the rep have continued to work diligently at sustaining the relationship. It’s much like a marriage. If the little things go wrong and you start nitpicking at every little grievance, then those little problems become big ones, and that can be the beginning of the end.” Added contributors to the strong relationships, he continued, were mutual response and appreciation for each other’s problems, effective two-way communication, personal contact and a true sense of partnering.

The Key Is Flexibility

If one manufacturer has strong feelings about the size of the rep firm he goes to market with, another feels just as strongly about the technical capabilities of his outsourced sales force. One manufacturer that produces fairly sophisticated high-tech products maintains that when he has a need, he looks for a rep who is capable in a general sense, rather than one that might be considered a specialist. “Although my agents do need a certain level of technical ability to sell our products, it’s not really as high as someone might expect. When I have to replace a rep or otherwise fill a void in a territory, I look for reps that have a fairly wide range of competence — those who can move quickly from one sales situation to another. Keep in mind that no two sales situations are alike. As a result, when you have people whose primary strength is that of being technically able, they tend to look for ways to make the customer conform to their conditions rather than to evaluate a situation and adapt to it. That’s why I look for flexibility, and I find it with generalists.”

Fine-Tuning Training Programs

Those words, “No one shoe fits all,” came up again in a conversation with another manufacturer when it came to manufacturer-supplied training programs for reps. According to this manufacturer, “When we put a training module together, we keep in mind that no two of our reps are the same in terms of what they know and how they operate. As a result, when we have a training message that’s important to communicate, we attempt to work with some level of generic knowledge and then move on from there.” To identify that “generic knowledge” level, he surveyed his rep sales force. “We put together a written test for every agency that sells our products. We were very careful to let the test takers know that the results would be kept anonymous. Following the administration and review of the results, we felt we were provided with a very clear picture of how and what our reps needed to better represent us. And, just as important, the test allowed them to let us know what they wanted from us in terms of training. We’ve tailored our training efforts to those test results and we’ve been very pleased with the results in the field.”

Signing a Check With a Smile

While happily reporting on the upswing in business for the past year, one manufacturer put forth a philosophy any independent manufacturers’ representative would love to hear. “I wrote a check for $240,000 to one of my reps last October,” he said. “In one month, he sold what would normally be one-third of his annual sales. That caused me to write him a check for $240,000. It took a little more ink and it took me a little longer to write, but it’s something I did without hesitation — and with a great deal of pleasure.”

Let Reps Sell

Last month in this column, we reported some of the initial findings of a survey conducted on sales force productivity by Robert Nadeau, managing principal of Industrial Performance Group. In those preliminary results, he reported on the findings of an online survey of more than 700 salespeople from a variety of industries. The number of respondents is now well over 1,000.

According to Nadeau, “We found that salespeople work long hours — an average of 49 hours per week. No surprise there. But we also discovered that a lot of their time is consumed by activities that have nothing to do with sales. In fact, on average, salespeople spend less than half their time selling. They spend most of their time traveling or performing various administrative tasks.

“Established benchmarks give us a good measure of the optimal utilization of a salesperson’s time. Research shows that peak sales performers spend the majority of their time — 85 percent — engaged in a specific set of revenue-generating activities. They spend the remainder of their time on activities necessary for the day-to-day operation and management of a sales territory.

“Our survey results indicate that the average salesperson only spends 41 percent of his or her time engaged in revenue-generating activities — well below optimal utilization.

“The most troubling finding is that salespeople spend an average of 22 percent of their time — nearly one-fourth — dealing with problems and mistakes, looking for information and expediting orders.

“Reducing the amount of time salespeople spend performing these non-revenue-generating activities would give them more time to sell. As a result, manufacturers, reps and distributors can easily obtain double-digit growth with low risk and no additional sales and marketing costs.

“Giving salespeople more time to sell may seem like an amazingly obvious solution. However, it’s a solution that most sales managers haven’t paid much attention to in the past, largely because of how they measure sales force performance.

“Sales force performance is usually measured in terms of productivity. Measures of productivity define the relationship between how many dollars were brought in per salesperson compared to the cost of supporting that salesperson.

“While measures of productivity are important, they do not tell the whole story. In fact, productivity numbers can create a false sense of security by masking ineffective sales force utilization. Your productivity numbers might look good, but you have no way of knowing if your salespeople could be doing even better. The results of our survey clearly indicate that most salespeople could be doing better — a lot better — if they had more time to sell.”

Learning From Reps

“I had just invested a lot of time and money in my new website. As a result, it was a hard pill to swallow when several of my reps told me I had missed the mark.” That’s how one manufacturer described his experience when he listened to his rep council tell him why the effort had been fairly misdirected.

“I’ve had a good history of listening to what my reps tell me. That’s why when they said the website I had worked long and hard on wasn’t doing the job for them, I knew I had better pay attention. My biggest mistake was not consulting them from the beginning. My thinking was that the site was being put together for my and my customers’ needs, not necessarily for them. My mistake was not considering their needs. Among the things that got my attention was their desire to have a link running from their respective sites directly to mine. And once there, they provided me with a number of tips on how to make the site more useful — for them and their customers. Once again, I should have included them in the loop — like I usually do in other matters. I won’t make that mistake again.”

Calls to Action

Speaking of rep councils, another manufacturer who has enjoyed the benefits of a smooth running rep council for seven years points to what he refers to as “calls to action” as a key to its success.

“At the very beginning several years ago, we were diligent in our note-taking during our council meetings. One thing that was missing, however, was assigning a task to an individual and then giving a date by which something had to be reported on or a task completed. Finally, after hearing from our reps that they didn’t know what had happened with all their suggestions, we made it a point to set a date by which something has to be done or at least a reason given why a task was not completed. In addition, one individual was assigned the task. Since then we’ve had accountability, much more has been accomplished, and our reps and we are much more satisfied with the relationship.”

End of article

Jack Foster, president of Foster Communications, Fairfield, Connecticut, has been the editor of Agency Sales magazine for the past 23 years. Over the course of a more than 53-year career in journalism he has covered the communications’ spectrum from public relations to education, daily newspapers and trade publications. In addition to his work with MANA, he also has served as the editor of TED Magazine (NAED’s monthly publication), Electrical Advocate magazine, provided editorial services to NEMRA and MRERF as well as contributing to numerous publications including Electrical Wholesaling magazine and Electrical Marketing newsletter.