Issue: December 2007

U of M

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Very little is taught about our great function of manufacturers’ representatives.

Where do reps get educated? Why should reps further educate themselves? Do you have a Bachelor’s degree in Sales? Welcome to the U of M: the University of MANA.

My friend Harvey Copeman, CSP, president and CEO of the CPSA (Canadian Professional Sales Association, cpsa.com) told me recently that “sales is not a career of choice.” How true, and what a challenge for change! There are a few schools that offer sales curriculums and degrees, but mostly it is wrapped into ‘sales and marketing’ degrees where the emphasis is on the glitz and glamour of marketing.

MANA and all rep associations exist to promote, protect and educate representatives and manufacturers. It is very important for you to plan your education budget for 2008. The biggest budget item in your company is your people, and for every one dollar spent in educating and planning, your team will realize a two dollar gain in efficiency, productivity and growth. What is your education budget for 2008?

MANA focuses on three types of education for our members:

  1. Business education to make reps “business people in sales, not salespeople in business.”
  2. Sales training to increase strategic and consultative skills for successful customer partnerships.
  3. Education for manufacturers to better understand, manage and motivate reps for a successful and sustaining partnership.

We all need to budget time and resources to make us better at what we do, to make us more professional, and to network with our fellow rep experts to do solid info-sharing. This is the best time of the year to take a breath, set your strategies and goals for 2008, and plan on how you are going to invest in education for better success.

Happy Holidays to you and your families.

Time Is Money

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So should “pioneering” costs be shared?

Should we as independent representatives expect compensation for developing a territory that has no income or in other words receive payment in some form other than commission (retainer, market development fee)? For the most part I am in favor of some form of compensation to develop a territory from scratch (also known as pioneering).

My explanation to manufacturers is often like this:

If I spend time on your line to make no income, then I am taking away time from another manufacturer that is already paying me. I suspect that other manufacturer does not … Read the rest

Pioneering — Successfully “Prospecting” New Lines

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The first opinion is that of an independent manufacturers’ representative who has placed consideration of shared territory development costs on the front burner in all of his discussions with prospective principals. The second is a consultant who connects manufacturers with reps. In that capacity, he maintains, it’s becoming more and more common for reps to raise the subject of shared territory development costs. While the former is a huge advocate of shared territory development costs, the latter holds a slightly different view that such “retainers” aren’t always the ideal path to follow.

Let’s begin, however, with a scenario described by … Read the rest

Working Without a Contract

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Reps often provide their valuable professional services without the benefit of a formal written contract, or even a less formal, but equally enforceable, oral contract.

In such situations, the rep is often told by the principal that they are not going to be paid despite the fact that the rep has just brought in significant business. The principal contends that the sale was “outside” of an existing contract, or that no contract exists between the parties. Typically, with a great deal of resignation, the rep wonders whether or not they will ever be paid. But alas, all is not lost. … Read the rest

It Takes More Than Just Compensation to Unleash a Sales Force

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I’m often asked to help a company refine their sales force compensation plans. As a consulting company, that’s work that we regularly do. I believe in having a well-designed, effectively managed compensation plan as a fundamental part of any productive sales system. But, it’s a mistake to think that the compensation plan is the entire solution. It’s only a part.

The reason that a company will call us to help with the compensation plan is often a deeper issue. Their sales are flat, or even declining. They are casting about to find a solution to their lack of sales effectiveness, … Read the rest

Finding Costly and Embarrassing Mistakes

Sue was arranging an important meeting. She did what meeting planners do: Arranged all the details. Contracted space, speakers, equipment and more. The sales meeting was announced, and personnel, principals and speakers scheduled their travel to get there. It was business as usual. Well, not exactly.

There was a typo in the meeting dates published. By the time the mistake was found and everyone was notified, more than $25,000 had been spent in airline change fees, additional airfare, and other penalties, not to mention the wasted time and embarrassment this mistake caused.

An e-mail to a top executive at a … Read the rest

The Dark Side of Private Labeling

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Private labeling is creating a real squeeze for manufacturers’ reps. Some distributors, primarily national companies, are actively pursuing private labeling to improve margins and capture market share, and some manufacturers are willing to support these distributors in their initiatives.

Caught in the middle are independent reps. Reps must still provide some level of support to any distributors that private-label for other lines they carry. But, they still need to generate commission dollars — while street-level pricing deteriorates due to competitive pressures that may have been sparked by the market entry of private-label products in the first place.

The electrical market … Read the rest

What Your Buyers (Really) Want

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“The bitterness of poor quality remains long after the sweetness of low price is forgotten.”

The quote is so common because it’s unquestionably true. Of course your prospects would like a low price. But nine times out of 10 they know that “low price” can often translate into “poor quality.” The fact is your prospects value many other things besides low price, some of which can be just as persuasive, whether you sell products to end-users or services to major corporations.

In addition to price, there are countless other factors that get people to buy. Let’s take a look at … Read the rest

Investing in Your Sales Force

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The paucity of information — or perhaps it’s an unwillingness to even address the subject — concerning manufacturers’ use of independent manufacturers’ representatives is illustrated in a new book entitled, The Sales Force.

In it, author Wayne Thomas notes that one of the most important steps that must be taken by any chief sales officer is a “review of existing partner relationships, or whether some (additional) segment of the sales program ought to be effectively outsourced to indirect channels. These independent companies perform the selling function primarily by extending your company’s reach into segments familiar to them and not … Read the rest

Building Relationships Through (Relationship) Farming

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Relationship marketing is vital for your success in business. Successful people know that business is built on solid, mutually-beneficial, profitable relationships.

Establishing, building and maintaining positive, profitable relationships in business is very much like farming. Some say that business is war. They use analogies to combat, killing, beating the enemy, etc. I think that analogy is missing the point of what business is all about. War is about killing people and destroying things. Even if you win in war, you lose a lot.

Farming, on the other hand, is about creating and growing. It is about scientifically researching what is … Read the rest

Should Your Mutual Fund Strategy Go International?

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For investors watching their calendar year returns, last year was the fifth consecutive year that returns of domestic stocks trailed international equities.1 While recent returns should not dictate how a long-term investor allocates a portfolio, those relying solely on domestic stock funds may want to consider adding an international fund.

Reasons for Going International

Foreign stock and bond markets can potentially move independently from the U.S. financial markets — for example, when domestic stock prices are falling, other markets may be posting gains. For this reason, U.S. investors may reduce overall portfolio risk by combining domestic funds with international … Read the rest

Tips & Tactics

More on Shared Territory Development Fees

During the course of researching and writing the article on shared territory development fees that appears in this issue of Agency Sales, one manufacturer offered one of his most pressing reasons for failing to embrace the concept.

The manufacturer asked, “What happens if I’m in the midst of going from a direct sales force to a nationwide rep network? Obviously, one of the reasons I made this move is that the use of reps is recommended from a fiscal point of view because they don’t get paid unless or until they sell something. … Read the rest