As the market the rep works in continues to grow internationally, rep firms must walk a tightrope in order to achieve balance between the needs of principals and customers.

On the one hand, it’s imperative for the rep to communicate customer needs to his principals — especially as those needs relate to product quality and competitive pricing. The importance of this consideration is compounded if the principal locates a partner for manufacturing needs in another country. Such a move can result in commission cuts to the rep, or can result in cutting the rep out entirely.

On the other hand, the customer always desires the lowest possible price. Many customers have established procurement and engineering departments in other countries. As a result, it becomes tougher for the rep to successfully make sales to these companies when representing domestic principals.

Compounding the rep’s concerns as he negotiates that fine line between serving principals and customers is everything from:

• Higher expenditures — automobiles, fuel, lodging, traveling, office expenses.
• Employee costs — attracting and retaining top-flight professionals, health insurance, salaries.

It remains for the rep to meet these growing challenges all the while his commissions are under pressure. Since the rep can hardly increase pricing on the products/services he represents, there’s the pressing need to expand sales to existing customers or develop new customers in the territory.

Reps, their principals and customers must keep in mind that for an agency to survive and thrive, the business must be run professionally. Part of running the rep firm professionally is the need to focus on the fact that the rep’s most valuable asset is his time. The time he invests in serving his customers and principals must generate a handsome return in order for the rep to succeed.

In order to build a foundation for that success, the principal and the rep agency have to create and follow a game plan or strategy that ensures both stay the course. Key to staying the course is effective problem-solving, and that can only be done by means of communication, communication, and more communication between reps, customers and principals.