Two manufacturers took center stage to describe via “best practices” how much they value their marketing partnerships with manufacturers’ representatives at NEMRA’s 37th annual Conference in New Orleans earlier this year. As part of a presentation describing progress that has been made in that association’s ongoing effort to streamline and facilitate the work done between manufacturers and their reps, the manufacturers described their efforts in servicing reps.
Their best practices came to the fore when NEMRA’s Manufacturers Group (NMG) described the next phase in its ongoing project aimed at eliminating wasteful practices in the channel. Consultant Tom O’Connor, The Farmington Consulting Group (FCG), Farmington, Connecticut, who is conducting the project, Eliminating Wasteful Activities in the Representative and Manufacturer Sales & Marketing Channel, for the NMG, explained that three major areas remain as major contributors to waste between reps and their manufacturers:
- Sales order entry process — “Even today our process remains too slow, error prone and labor intensive. In addition, our channel has been too slow to adopt e-commerce activities.”
- Sales activity reporting process — “Manufacturers continue to struggle with sales systems that do not engage the electrical rep. Reps have been unable to link their sales systems across multiple manufacturing partners with a single customer relationship management (CRM) solution.”
- Training — “There is a continued need for improved professional sales management and product training.”
Two manufacturers were held up as examples of those who were taking positive steps to eliminate wasteful activities in these and other areas. Both Ferraz Shawmut and Pass & Seymour/Legrand were cited for their best practices with manufacturers’ representatives.
Creating a Rep-Friendly Position
Ferraz Shawmut, Inc., Newburyport, Massachusetts, has created a position — sales channel process specialist — whose job it is to “drive every dollar of non-value activity out of the processes between the manufacturer and its independent electrical manufacturers’ representatives.” According to Ken Hooper, the manufacturer’s senior vice president of sales and marketing, “The creation of this position was the natural extension of our effort to improve service to our agents.”
The specialist, who reports to the company’s vice president distribution sales, is responsible for improving all “critical-to-service” processes that exist between the manufacturer and their channel partners, e.g., reps and distributors.
The individual in this position will be expected to recommend improvements in all, but not limited to, the following:
- Sales reporting.
- Pricing management, including the special pricing authorization (SPA) process.
- Commission reporting, including point-of-sale (POS) and point-of-transfer (POT) reconciliation.
- Marketing and sales communication to sales team and external channel partners, including new product communication.
- Web-based customer self-service offerings.
- Electronic commerce communication/electronic data interchange (EDI).
As the position was described at the NEMRA meeting, the person in that position should have “a very strong orientation toward the existing systems, a thorough understanding of the process flow between manufacturers and manufacturers’ reps, and be a skilled problem solver.”
At the same time the manufacturer was establishing this position in its organization, it also made a suggestion for reps. “ Manufacturers’ representatives should also establish a channel process specialist function which could be an additional responsibility given to the most qualified inside sales/customer service person to work with each manufacturer’s channel process specialist on streamlining their quotations, sales order entry, expediting, RGA, etc., processes.”
A Website That Works
Functionality is the key word for Pass & Seymour/Legrand, Syracuse, New York, when that company’s website (www.passandseymour.com) is described. “We always considered reps as our own employees. As a result, we see to it that they have the same web-site access as an employee of the company. They receive real-time sales reports with drill-down capability to the item number.”
That’s how the manufacturer’s website was initially described at the NEMRA Conference. More to the point and in more detail, a white paper generated by the NMG study explained that manufacturers and reps receive countless telephone inquiries that should be easily accessed online, reducing operating costs for manufacturers and reps, thereby:
- Improving customer service for manufacturers and reps.
- Increasing sales revenue opportunities.
The study continued: “There are great disparities between the user-friendliness and information availability among manufacturer websites. Pass & Seymour is constantly touted by reps as having the best-practice website. As echoed by one rep: ‘P&S is the best at customer service. They listen to their reps, they listen to their customers, and they act. They open their books and streamline their systems; everything you need to know you can find on their website. All their people are great to work with. They are just a world-class organization. If every manufacturer did what P&S has done on their website, huge costs would be taken out of the rep and distributor channel.’”
Another rep noted, “P&S’s website is so accessible, which makes it so much easier to conduct transactions and avoid sales calls (to the manufacturer). Manufacturers need to continually enhance their website. Reps need to continually encourage customers to use manufacturer websites that allow them to:
- Check stock and pricing.
- Obtain quote information.
- Enter sales orders.
- Check delivery-tracking information.
- Obtain product information and spec sheets.
- Enter returned goods authorization (RGA).
- Request samples.
- Request material data safety sheets (MDSS).
- Conduct training.”
Principals Must Sell the Rep
While acknowledging how important it is for the rep to continually sell himself and his agency to his principals, one manufacturer turned the tables a bit with this opinion: “We pride ourselves on the fact that we’ve been able to align ourselves with the number-one or two agency in the majority of our territories. That hasn’t been an easy task, however, and it’s taken a considerable sales effort on our part.”
Here’s why it’s so important to this manufacturer to be partnering with the top rep firms. “I used to be a rep before I started sitting on the opposite side of the desk. During my more than 10 years as a rep, it became very evident to me that manufacturers’ lines can come and go — and they usually do. The one constant in the territory is the rep firm. Look at a firm’s tenure in the territory and look at the stability of their personnel. Those elements combine to create the ‘brand.’ It’s the agency’s brand that’s more important than anything else. It’s that brand combined with the agency’s customer relationships that makes everything work.
“By aligning ourselves with the most historically strong and stable agencies, we’ve been able to develop and sustain our market share.”
Eliminating the Word “Fail”
“Here’s what I especially like about some reps,” is how one manufacturer began a conversation. “This particular rep — who, by the way, is among the top performers I work with — doesn’t have the word ‘fail’ in his vocabulary. He’s a firm believer in being proactive in all that he does. And, if what he’s working on doesn’t turn out for the best, he doesn’t say he’s failed, rather he maintains he’s learned a valuable lesson and it’s not going to happen again. If a big order doesn’t develop as we’ve anticipated — and that doesn’t happen very often, by the way — I’ve learned not to get upset with him. We’ll go over what transpired, get to the specifics of why the order didn’t develop, then we make sure we never approach business that same way again. We’ve been working together now for 13 years, and this approach has been perfect for both of us.”
Ask, and I’ll Tell and Share
After speaking with a number of reps on the subject of succession planning, it’s becoming abundantly clear that a growing number of reps are just waiting for existing and prospective principals to ask them about their plans for succession. They want the questions asked because they’re anxious to let the manufacturers know that they appreciate the importance of such plans. They also recognize the fact that their thinking of the future provides them with a competitive advantage over competitors who may not have a clue who’s going to take the agency reins in the years to come. At the same time, they want and they expect manufacturers to ask about business plans. Just as they do with succession plans, they’re more than willing to share that information.
No One Size Fits All
While some manufacturers choose to go to market only with multi-person agencies and others with firms composed of one to three people, we recently engaged in conversation with a manufacturer who maintained the needs of the market are what directs him to an agency of a given size. “We’re all over the place with it comes to working with agencies of different sizes,” he explains. “We’re well aware of the fact that we’re rarely, if ever, going to be a rep’s number-one line. What we’re looking for when we partner up, however, is an assurance that we’re going to get more than our fair share of his time. We know we always get that share with the agencies that are on the smaller side, but strangely enough, some of the larger firms, given their attention to niches in their respective marketplaces, often exceed our expectations. Underlying all this is the fact that whomever we market with has to show us that they know all there is to know about our product line and how that line meets the needs of their customers. Then it really doesn’t matter what their size is as long as we see the numbers we’re looking for on the bottom line at the end of the month.”