John Glebas is a management consultant who has enjoyed considerable success during his manufacturing days, working with reps. The following are some of his manufacturer-based thoughts on maximizing the relationship.

Have you ever contracted with a rep expecting a continuous stream of new contacts, inquiries and orders to follow? All manufacturers have the same expectations but few implement a plan to avoid letting the relationship slide into the caretaker scenario.

The focus of my thoughts assumes that you and your rep are a proper fit, but just are not driving new business as expected. You’ve handed over your existing orders to the rep, who has started the customer relationship process. Everything seems fine as you hand over existing accounts to your new local rep and the customers are happy to have improved service. The rep sends in detailed reports of all the work they’ve done and how happy the customer has become. Typically what happens is that the rep and manufacturer fall into a comfortable pattern created by the success at existing customers. They fail to seek new customers or business opportunities and focus on existing customers.

To prevent the relationship from falling into that rut, both rep and manufacturer would benefit from an up-front plan. This can be accomplished prior to signing a contract with a new rep or as part of an annual review for next year’s plan. Simple plans usually work better than complex documents. The basic plan needs to include at least the following sections:

• Existing customers, number of products, and annual sales
• Estimated number of potential new customers in territory
• Methodology to contact those customers
• Anticipated sales with new customers

Developing Relationships

Most reps and manufacturers fail to properly implement a plan to continuously pursue new customers and evolve relationships that turn prospects into customers. The most difficult part of the process is developing that relationship when no sales exist.

The initial contact part is easy, the process may be a simple phone call or to mail some brochures or literature. Either way, there needs to be a plan to make initial contact with each potential customer and follow up on a regular basis. The entire process works best when both the rep and manufacturer participate in creating the plan. The rep can share territory knowledge and the manufacturer can define the budget and manpower limitations.

Focusing on developing new relationships with potential customers is the challenge. In my opinion, the following concepts have proven valuable:

Contact Plan

Both the rep and the manufacturer need to be realistic on the number of prospects in a territory. Buying a mailing list may be cost-prohibitive for the manufacturer, but if the rep buys the list and can use it for mailers for other principals and justify the cost, that makes it a win-win all around. Being flexible in utilizing and developing prospect lists is one key to driving more sales.

Once the prospects are identified, the initial contact can take the form of a cold call, mailed literature, or now you can use territory-specific Internet keyword searches. It can originate from the factory or the rep, either way the first impression is lasting, so make sure your mailer or telemarketer makes the right statement. With keyword searches you can also target specific geographic areas. Most budgets for keyword searches on popular strings are limited. However, if you want to grow a territory and have a rep there to support the sales, you could afford to bid higher for fewer leads that you know your rep can turn into sales.

Follow-Up Plan

The follow-up plan is more important than the initial contact. This is where the critical go/no-go decision is typically made by a customer. Is this best done by a rep or a combination rep and manufacturer? Everyone knows the sale isn’t made on the first visit, so the process doesn’t end after the first meeting.

Once you have a prospect, the key is to not let them forget you. Most of the time, you have to wait for the customer to reach a reorder point, and you get an opportunity to quote a new job. All the work in finding a rep and signing a contract will be lost unless you can maintain the contact when the next RFQ is sent out. There is little chance a potential customer will remember you when he is sending out RFQs. You need to be asking for RFQs every day, or as often as possible.

This is where many relationships fail to maintain an effective follow-up system to keep your name in front of the customer. It’s the rep’s responsibility to keep the presence with customers, but it’s the manufacturer’s responsibility to provide reasons for the rep to keep making repetitive contacts.

Manufacturers have to realize that reps focus on the customers with active RFQs and pending orders. You need to provide reasons for them to make recurring contact with prospects. This is my favorite part because it’s so easy and yet so few people realize the importance of generating reasons for rep visits or calls. The process should be viewed as a mini-press release campaign. In fact, you can even use some of the ideas as outlines in press releases to magazines, trade groups, or even Internet search engines and blogs.

The manufacturer needs to provide a constant supply of reasons for the rep to keep in touch with each prospect. The best reasons include new product releases, new technologies acquired or new equipment purchased. The manufacturer needs to play up the strengths of the new product or process and send the rep in to the appropriate prospects with a sample. The same applies for new technologies or equipment purchases. The manufacturer should publish comparison charts or produce samples from the new machine showing the benefits and possible cost reductions.

When a rep calls just to say “Hi,” the prospect will constantly shorten the amount of time spent with the rep. When a rep calls with some pertinent information, the customer will value the information and recognize the rep as a resource and not just another pretty face.

Seeing the Big Picture

When manufacturers sign on new reps, developing relationships with existing customers always takes priority. Good manufacturers have a better sense of the big picture and plan their growth. They utilize the reps and take full advantage of their contacts, piggyback on other principals to get the rep to chase new prospects, and constantly feed the rep useful and valuable information to share with the customers. When that happens, the prospects turn into customers, and the rep develops a list of contacts that value his opinion and rarely turn down the opportunity to visit or receive a phone call. The manufacturers need to feed the factory developments to the rep and the rep needs to share those with the customers.

John Glebas is an independent marketing consultant who has worked on the manufacturer’s side of the desk and has worked extensively with independent manufacturers’ representatives. He may be reached by e-mail at industrialstrengthwebsites.com.

Turning a Blind Eye to House Accounts

Before a large manufacturer began the process of finding a successor for one of his most successful reps, he took the time to conduct a little research in the pages of Agency Sales magazine. The vice president of sales let us know something he learned in the pages of the magazine from several years ago. “I read what one manufacturer that worked extensively with reps did in the very same situation and decided to follow his example. According to what I read, this manufacturer decided to turn over more than $1.5 million of existing business at full commission to his new rep. He did this in the face of some advice to turn much of that business into house accounts. The manufacturer maintained that he knew the decision would fund mutual growth in the territory. Part of his reasoning was that if turning over existing business would serve as an incentive, didn’t it make sense that holding the business back would serve as a disincentive? Wouldn’t that ultimately harm the rep and the manufacturer — not to mention the customer?”

The manufacturer continued that the results of the decision he made about 18 months ago proved he was right.

Criteria for Making a Decision

Over the course of the last several months, we’ve published a number of articles concerning the approach a rep takes when he’s considering whether or not to take on a new line. If reps are serious about ensuring that they make the right decision, manufacturers should be just as serious. That’s the case with one manufacturer who has extensive criteria that he uses to evaluate his potential reps ahead of time. Among the many things he looks at are:

• Once the potential for a territory has been determined and the sales for each of the potential rep’s principals are determined, we’ve got to be sure that we fit in first, second or third among those principals. It’s our belief that we’ve got to be one of their top lines.
• The other principals that the rep works with must be complementary to us and their products sold to the same customers that buy our product — but none should compete with our products.
• The agency must not have more principals than can be effectively handled.
• The agency must have a full-time office support staff for dealing with incoming calls from us, their other principals and from their customers — and they must be capable of quoting prices.
• An agency customer service organization is of paramount importance. By that I mean that they are able to provide limited installation service, start-up service and user training.
• And finally, they must have sufficient salespeople to work the territory.