A Marriage Made in SevenBy Bryan Shirley
The seven steps and the seven key ingredients to a successful rep-manufacturer “marriage.”
We often refer to the rep-manufacturer relationship as a “marriage” and it makes sense. Like the commitment we make in any relationship, there are certain necessary steps to take along the path to success:
- We meet: Reps and manufacturers connect via MANA, a trade show, or a rep search.
- We date: We talk, we get to know each other, we learn about each others’ wants and needs.
- We court: We are getting more serious, and we determine if we will stay together.
- We engage: Now we have told each other that we really are ready to make a commitment.
- We marry: We sign up, and with blissful optimism, we start the wonderful honeymoon period.
- Years 1 & 2: This may be more like years 1-7 in marriage; we really know each other now.
- Life-long success: We continue to grow together, prosper, share success — and life is good.
Why is the divorce rate so high? Why doesn’t the rep-principal relationship last forever? One reason is the fact that it is so easy to get out of the relationship. But the underlying reason is that we selected the wrong partner to begin with. At MANA, it is our job to help educate manufacturers on finding the right rep and to educate the rep on how to select the right manufacturer and build stable and long lasting relationships. The goal is to make commitments that succeed and last.
When it comes to the subject of manufacturers’ representatives, there are only two types of manufacturers: the ones who “get it” and the ones who “don’t get it.” Let me tell you a story about one manufacturer that doesn’t get it.
Last year, I talked with a rep who was quite upset. the rep told me the story about developing a very big account over a long period of time, and of what happened when the company recognized that they were about to win a three year deal for $10 million in sales per year (do I have your attention now?). As it got closer, the principal informed the rep that it would be a 2% commission instead of the normal 5%, even though pricing had been submitted already with a very ample margin to pay the 5%. After some short discussions, the rep agreed to the 2%. The rep successfully obtained the order, $10,000,000 this year, with a contract for 2 more years at $10,000,000 each year. Yea! There would be lots more work to do, to start the shipments, monitor quality, expedite, etc.
After the champagne was empty, and the principal looked at the commission dollars, they coerced a Junior Buyer into agreeing that it would be better if they handled the account “direct” (it hurts me to even type the word). $30,000,000 total over the 3 years at 2% was lots of money — $200,000 per year, to be exact. Everyone knew it was the rep’s relationship with, and knowledge of the account that created the win. The principal would never have had a sniff at this opportunity. Then, they offered the rep a finder’s fee of $10,000 and told the rep that they could continue to pursue a similar large opportunity at another account which was very close in likeness to this one. Wow, that’s motivating! This manufacturer clearly does not “get it” and is also forgetting about the $9.8 million that they would get each year as a result of the rep’s efforts. The manufacturer was too greedy and too selfish to pay the mere 2% ($200,000). Guess what happened next?
All manufacturers are not bad — and we have many great manufacturer members of MANA. And to be fair, I would never try to convince you that every rep is the greatest thing since sliced bread — of course there are some bad reps too. But mostly, when it doesn’t work, it’s a bad fit from both sides. You may have picked the wrong partner and as a result, the marriage failed. So what are the seven key ingredients to a successful rep-principal “marriage”? Well, I’m glad you asked:
- We have mutual trust and respect for each other, and this is how we treat one another, always.
- We have set clear expectations and agree to the goals, and we communicate candidly on progress.
- We are responsive to each others’ needs and requests, and provide information easily and quickly.
- We knock down obstacles quickly — those things that are blocking us from getting orders and growing (we adopt a ‘yes we can’ attitude when it comes to solving customer problems).
- We are focused on the customer, and continue to foster and promote a customer centric culture.
- We are patient and persistent with each other, in a patient and persistent way (we understand).
- We both like to have productive fun.
There are some great articles in this issue about the importance of building better rep-principal relationships. It’s not really that hard, and it’s mostly about clear expectations, candid communication, trust and respect. Do what you say you will do, do the right things, and do them well. You can succeed!