A manufacturer reports how one of his reps turned what could have been a disastrous situation into something that made their relationship even stronger.
“A one-man operation that had always been one of our top performers hired a new outside man to take some of the load off himself and to allow the agency to grow. Unfortunately, he hired the wrong person. Almost from the beginning, I noticed a fall-off in the follow-up, and we were not benefiting from the same attention to detail that we once did. It took three months before the rep fired his new man, but during that time the relationship had been damaged.
“Rather than let things go and have the relationship deteriorate even further, I give the rep credit for giving me a call late one day and owning up to his mistake. I was a little taken aback when he said, ‘Look, I blew it. I made a mistake. I admit it and want to start over.’ Just the fact that he realized how important the relationship was made an impression on me. It’s been a good six months now, and there have been no problems. Things are as good as they’ve ever been.
“If I could offer any advice to other manufacturers, it would be that when things appear to be going south with what was once one of your best reps — don’t give up. Address your concerns head-on; give the rep another chance. It’s my belief that that approach is much better than having to go out and hire a new rep.”
One Vote for Synergy
“I know I’m a small fish in a big pond when it comes to gaining the attention of successful reps,” one manufacturer wrote recently. “But I’ve had excellent luck when I take a close look at the other lines he represents. I’ll research his entire offering and determine if there’s a void — which would represent a niche we could fill with him. Then I contact some of his other lines, which is really pretty easy since we’re non-competitors. I do that to determine their level of commitment. The bottom line is that commitment to a line is what we’re looking for. If we can learn that the rep is committed to his other lines, we feel we’re a shoo-in. It all comes down to synergy and determining if we can assist the rep in presenting a more complete line card to the majority of his customers. This is an approach we’ve successfully followed whenever we seek new representation.”
Another Vote for Synergy
A second manufacturer voiced a similar appreciation for synergy when he explained to us why he signed on with a rep firm that had just taken on new ownership. “We went through a long and comprehensive rep-search process to ensure we had the best chance of making the right choice. The agency we ultimately signed with impressed us with their enthusiasm, professionalism, and most of all their desire to have quality personnel in place to market and sell top lines. We looked at it this way: if they were going after the top lines and getting them, we’d be in pretty good company if we went to market with them. We did just that, and although it’s only been a year, to say we’re satisfied thus far is an understatement.”
Putting Some Teeth Into the Term “Value-Add”
In the words of one manufacturer, “Buzz words come and go, but one that’s stuck around for a while is ‘value-add,’ especially as it applies to independent manufacturers’ representatives. Too often when I ask a rep what makes him different from the competition, he’ll say ‘My value-add.’ Generally when I hear that, I take a breath to calm myself and then ask for a definition of ‘value-add.’ Many times what I get in return are just words — no real facts.”
That’s why when one of his reps introduced the concept of monthly strategic sales analysis meetings, he was especially impressed. “This concept emanated from one of my very best reps, so I shouldn’t have been surprised. At the end of the process, however, I’d say I was more gratified than anything else. I was gratified and satisfied that I had made the right decision with this rep several years ago, and I was pleased that he offered the measurements that were needed to convince me that he was doing more than was expected in the territory.”
Without going too deeply into the details (we’ll save that for a later issue of Agency Sales magazine) the rep’s approach is to engage the principal in a monthly conference call that included the major players from the rep firm and the principal’s office. Using a series of prompts to get the conversation moving, the rep would ask questions of the principal pertaining to what he was doing with major accounts in the territory. Then he’d update the principal concerning all of his agency’s activities with all customers and prospects. The meeting would end only when action plans (complete with who was responsible and dates by which certain actions should be taken) were mutually decided upon.
According to the manufacturer, “Consistently I’ve been left with the impression that there are no stones being left unturned. I’m convinced this rep is providing the ‘value-add’ we all want from our reps.”
A Proactive Approach to Joint Sales Calls
Manufacturers and their reps generally agree that properly planned joint sales calls can be effective in solidifying relationships and ultimately closing the deal. But one manufacturer has taken the joint call to a proactive level that has worked well to establish relationships with higher level personnel at many customer locations. According to this manufacturer, “I’d have to say that one of the major strengths the rep possesses is the ability to establish, nurture and maintain relationships at the decision-making buying level, especially with their larger customers. However, we’ve found that by putting our top executives on the road with a rep, we often have doors opened to us at a higher level than ever before. I think it’s a little bit of intimidation. They may be a little intimidated to meet our CEO without their top executives present. We’ve tried this several times and it’s worked well enough for us that we’ll continue with the process.”
Patience Pays Off
One of the chief benefits that’s cited over and over when it comes to contracting with reps is that they’re able to hit the ground running. They’ll get the business much faster than a manufacturer’s direct sales force ever could. However, one manufacturer cautioned about having expectations that were over and above what anyone could achieve. “From day one, both the manufacturer and the rep have to agree that their relationship has to work for both of them. Sure, there are times when a rep will go overboard in his desire to obtain your line. That may open the door for the manufacturer to dictate terms of the relationship that just aren’t going to work long-term. Ideally, it’s the rep and the principal who think both short- and long-term who will maximize their relationship. Basically, what I’m saying here is to be flexible during the first year of the relationship. Learn what works for both of you while benefiting the customer at the same time. It’s only then that you’ll have a good chance for a profitable long-term relationship.”
You’re Not Alone If You’re Considering Reps
An interview with the rep who is serving a one-year term as the chairman of his industry’s rep association was enlightening. It provided some real-world credibility to what rep associations have long been saying — “There’s a definite move on the part of manufacturers to either turn their sales operations over to reps or to incorporate reps into their blended sales strategies. There are a number of contributing factors to this trend, not the least of which is the ever-increasing cost of maintaining a direct sales force. Added to that, however, is something I’ve heard from a number of manufacturers, and that is the difficulty they’ve had over the years in keeping personnel in a given territory. One manufacturer in particular let me know that during the last 10 years, the longest period of personnel continuity he’s enjoyed in any one territory has been three years. That’s what’s drawn him to the concept of using independent reps.”
The Importance of Continuity
As a follow-up to the preceding item on the importance of continuity in the territory, another manufacturer justifiably boasted to us concerning the lengthy tenures with several of the rep firms he committed to years ago. “We’ve got a couple of firms that we’ve worked with for more than 30 years, and several more have been with us for more than two decades. If I could point to anything that has contributed to our long-standing success with these firms, I’d lead off by saying we’ve worked very hard at sustaining the relationships we currently enjoy. If anything, I’d compare it to a marriage. Most of us can relate to that analogy. When something goes wrong and you begin picking on each other, that’s the first step in a downward spiral. We’ve avoided that tendency by employing open communication with our reps. When they or we have a problem, we throw it on the table immediately, discuss it and come up with a solution. We don’t allow anything to fester.
“If I could add any additional elements that have contributed to our success, they would be our mutual appreciation for the importance of face-to-face contact with customers, our respect for our philosophy of partnering and a true appreciation for each other’s problems.”