MANA recently completed a new survey of associate members on the subject of outsourced sales force management. As usually happens with any such effort, the results were a mixture of good and bad news for all concerned. It should be noted that while the survey was not statistically accurate, close to 200 of the 1,500 associate members responded. This represents an excellent return of more than 13% for this type of survey.

Before explaining the “good news-bad news” scenario, let’s offer some general information gleaned from the survey. To put things into perspective, it’s useful to understand that:

• Fifty percent of the companies responding reported that they had fewer than 25 employees, while 20% reported an employee population of 101–250.
• Nearly two-thirds of the respondents said they have been in business more than a quarter of a century, while 10% answered they had been in business for five years or less.
• Thirty-five percent had annual sales of under $5,000,000, and 14% had sales of more than $50,000,000.
• Surprisingly, almost three-quarters of respondents said they generated some business from exporting and more than one-half bring in some products from offshore to augment their domestic production.
• Roughly half of the respondents had used reps 10 years or more, and a similar number indicated that they were happy with the level and quality of communications from their reps to the home office.

Based on the survey, it’s safe to say that many of the manufacturers have quite a bit to learn about effective rep sales force management, however. Many have not or will not take the time to at least attend a one-day MANA program that will help improve their sales results. It is also clear from the responses concerning house accounts, rep councils and co-insurance that MANA still has plenty of work to do in selling its “Partners in Profits” (PIP) philosophy.

In conclusion, manufacturers should note that MANA offers excellent resources at its headquarters that will help manufacturers to develop PIP and improved sales results.

Now, here’s a little more detail on the “good news-bad news” we found.

Good News

• Eighty-four percent of the survey respondents reported that they worked with written contracts with their reps and more than half (53%) of them said their contracts followed the MANA guidelines.
• Almost 70% of the manufacturers said they had a complete marketing support plan in place for their outside sales program and almost 90% stated that they consistently invest in new product development, which is the lifeblood of any successful company today.
• Fifty-two percent of the respondents indicated that they were sharing the cost of developing a missionary territory with their reps. In addition, while we did not ask the question, it’s logical to assume that many of those who said they did not do so operated in that manner because they did not have to — they have existing business that their reps share. Many MANA associate members are well-established companies that no longer have any territories with no business.
• Fewer than 30% of all respondents required written reports from their reps. As a result, it looks as if most successful manufacturers are beginning to understand that call reports detract from results.
• Sixty-eight percent of all respondents said they give their reps one or two months’ notice when scheduling territory visits. Only 7% said they gave one week’s notice or less.
• More than 90% of respondents said that top management of the company is fully committed to the rep method of going to market. However, one might question that number in view of some of the specific answers to survey questions.

Bad News

• Only 38% of respondents thought enough of the value that MANA provides to have been members of the association for three years or more.
• Surprisingly, only 28% said they had ever attended a MANA seminar. Obviously, the association has work to do here!
• While one-quarter of the companies paid commissions upon invoice, a full two-thirds of all respondents only released commissions after payment by the customer. This might beg the question, “Which manufacturers do you believe are the reps’ emotional favorites?”
• As previously mentioned, nearly one-third of all manufacturers admitted that they did not have a complete marketing support program to complement their field sales effort.
• An example of lack of commitment to the rep method of going to market can be found in the answer to the question: “Do you co-insure your reps against product liability lawsuits?” Only a surprising 34% of the respondents answered in the affirmative. This represents a much lower percentage than MANA has been quoting based on strong anecdotal evidence to the contrary. It’s clear that most manufacturers are not concerned with their reps ending up on the opposite side of a product liability lawsuit.
• Two major disappointments contained in the survey are that only 13% of respondents said they used a rep council, and a whopping 80% of the companies admitted to having house accounts. Both of these responses provide further evidence that 90% of those responding that they were totally committed to the rep method of going to market may not have been frank. The house account philosophy flies in the face of all modern marketing and sales philosophies that see the rep as an account manager and customers’ solution specialist.

The Problem With Rep Councils

An apt follow-up to the rep council item above is found in a communication we received from one manufacturer that was dissatisfied with his rep council ventures. According to the manufacturer, “Whenever we’d conduct a meeting, we’d find that several of our members would attempt to force discussion into a direction that was way too negative. It’s my opinion that they had their own agenda and were bound and determined to complete it no matter what we said.”

Manufacturers and reps that tout the council experience respond this way to that opinion: “There’s nothing wrong with efforts to go off in the wrong direction, but there are possible solutions when it goes too far. For instance:

• Don’t ever consider that it’s a problem when someone is being outspoken or what we might consider ‘constructively’ critical. But keep an eye on the individual who only brings up problems and never offers a solution. Chances are it is they and not your company that is the problem.
• Before you conduct your first meeting, make sure that it is you, and not they, who are in charge. It is the manufacturer that should set the agenda and conduct the meeting. It’s you who went to the trouble of creating the rep council and hosting the meeting. Take advantage of the opportunity — you’re entitled.
• Be wary of how you populate your rep council. It might be wise to keep your distance from those that have nothing but negative reputations.”

Who Pays the Way?

The subject of the rep incurring travel expenses when attending trade shows and training sessions — at the manufacturer’s request — was addressed by a number of regional sales managers, all of whom had long histories with their reps. We’re not saying this is what most manufacturers do, but in this conversation the manufacturers generally didn’t cover travel to trade shows. Their thinking was typified by one manufacturer who maintained, “Sure we’re looking for the reps’ assistance in manning the booth and speaking with prospective and existing customers, but they’re going to gain certain benefits by their attendance. First, we know they’re going to develop leads that will grow into business. Hence, they’ll realize an increase in their bottom line. In addition, since the shows we’re speaking about are generally attended by other manufacturers they’re looking to make contact with, chances are they’ll be able to add to the offerings on their line cards. That’s not to say we won’t pick up a few meals and some entertainment. Overall, our reps haven’t disagreed with our approach on this front.”

When it comes to training, however, the manufacturers realize they’re the prime movers. As a result, “We’ll go further in paying the rep’s way. We’ll usually contact our reps well in advance and offer to pay their travel to and from the job site to watch the installation and testing of a new product. Usually the presentation is conducted with the assistance of our own engineers. We’ve found that by doing it this way, the reps are familiar with them and much more receptive to taking the time for the training.”

He concluded by saying, “We know how trying it is for the rep to make himself absent from the territory. That’s why we only make this kind of offer when we feel it’s truly innovative and believe it will be worthwhile for them and for us.”

A Vote for the “High-Touch” vs. the “High-Tech” Sales Call

One of the manufacturers we’ve contacted for the series of articles on the “Perfect Principal” offered this take on the continued importance of the in-person sales call: “Too many people today believe that we can get everything we need from the Internet and other sources to make the most effective first-time sales call. That’s just not the case. I believe nothing takes the place of the good old-fashioned face-to-face meeting to allow you to get a handle on what is truly important for the customer. I’ve noticed over the years that it’s those reps who sell best that are the ones who operate this way. I’d add that reps who believe as I do probably have more experience in sales than the others. The new and younger reps tend to think that everything they pull off the Internet is of value and true. That’s just not the case. The Internet may provide you with a valid starting point, but that’s all it is — a beginning.”