Let’s not call it “misery loves company,” but more like a case of appreciating he was not alone when one manufacturer discussed his concerns with others. The manufacturer in question was relating the challenge he was faced with in terms of cutting costs while maintaining his market share. Like so many other companies today, this company chose to control one area of its costs by cutting personnel. That left the remaining people with two jobs — their own and the job of the person next to them who was let go. As he was relating his problem, another manufacturer smiled and interjected that in the face of a challenging economy and work environment he had not only been able to keep his market share, but also to add feet on the street in territories not previously covered. His remedy was to make use of a carefully constructed outsourced sales force.

When the first manufacturer indicated interest but then asked how to get started since he and his company had always been direct, his manufacturer friend recommended a quick and easy-to-begin process of:

• Asking customers who their independent reps were and if they could recommend any.
• Checking with manufacturer friends to learn their experience with reps.
• Learning about and joining rep associations.

Sticking on the last point, the manufacturer, who indicated he was a member of both MANA and an industry-specific rep association, said both associations had plenty of literature and personal advice on how to locate, attract and work with independent reps.

Following this conversation, the first manufacturer went away feeling more than a little better about his situation.

Eliminating the Turnover Problem

During a roundtable discussion at the same industry meeting, one manufacturer was bemoaning the time he had to spend concerning himself with turnover among his direct sales staff. You guessed it! Another manufacturer noted that after several years of addressing the same problem, he got rid of it by partnering with reps. “There’s been little or no turnover among the reps I work with,” explained the manufacturer. “Part of the reason is that in choosing reps in the first place, I make sure we work with agencies that have long and deep roots in their respective territories. I’ve found that’s where they want to live and work, and I don’t have to be concerned with them looking for a promotion to the home office. And when one of their salespeople does leave, the problem is only indirectly mine. The agency solves it, and my experience has been when they’ve brought a new person on, they’re more than up to the job.”

Investing In Specialization

When a manufacturer contacted us concerning how best to support their “specialized” sales effort in the field, we could tell him we’ve heard his question before, and we knew how others had answered it.

The manufacturer in question had a product that lent itself to a more technical or specialized sales effort. In one area especially, he was looking for a firm to employ some sort of a technique that would provide that technical approach to customers.

Relating the experience of another manufacturer, we were able to tell him that he might ask the rep if his firm was willing to add someone who possessed that technical “skill set.” But rather than just putting pressure on the rep to do so, the manufacturer did the following: After suggesting to the rep firm that such a person be added, the manufacturer offered to assist in not only finding the right person, but then compensating the rep firm for the effort. As sales would develop in the territory, the manufacturer would gradually decrease its financial support. In addition, while it was expected that the bulk of this new person’s job would be devoted to the specific product line, it was understood that the new hire was free to work on the other lines represented by the firm.

The manufacturer related that after an 18-month trial period, everything was proceeding extremely well, and both he and the rep firm were pleased with the effort.

Texting’s the Thing

While he was quick to admit “texting” wasn’t really his thing, when a manufacturer heard from several of his reps that texting was the best way to communicate with them, he was quick to adapt. “Maybe it’s a generational thing. I’d much rather talk to someone in person or, failing that, over the phone. But, given the pressure of work, that’s not always possible. So when I asked some of my best reps how they would prefer to hear from me, as one they all said by text. One of them put it best when he said: ‘When I receive a text message on my cell phone, I know it relates to business. If it’s a question or a problem, I know I had better drop what I’m doing and respond immediately. If I’ve got to get something done on the phone or in person, there’s too much small talk. By texting, we get right to the point — it’s business only.’”

Communication Never Gets Old

One manufacturer implemented the axiom of “a good offense is a good defense” when his company went through its most recent reorganization. The reason for the manufacturer’s offense was that he heard from many of his reps with whom he had excellent relations that they were getting more than a little apprehensive in their relations with the factory. It seems the most recent reorganization was the third such effort in the last five years. Each time the reps heard about it from other than official sources. As a result, they were feeling left out and were worried about the company’s future plans — simply because no one kept them in the loop.

According to the manufacturer, “We brainstormed the matter, considered having our reps to the factory for a training/information session or even having a sales meeting off campus where they could get to know some of our new inside and management people. In the end, however, we decided to revamp our communication efforts with our reps and insure that if anything was happening, they were going to be the first to know. We did this for a couple of reasons:

• “First, we owed it to them. They’re our eyes and ears in the field, and if they don’t know ahead of time what’s happening, we can’t expect them to continue with their best efforts on our behalf.
• “Second, most of our reps let us know that unless there was some critical reason for them to leave their territories, they’d rather not do so. They let us know that each and every one of them would make their annual visits to the factory, but they thought right now that their time was better spent in front of the customer.

“We agreed and have continued to communicate with them. No more surprises.”

Correcting Direct Sales Problems

As he described his company’s move from a direct to an outsourced sales force, a manufacturer pointed a finger directly at the struggling economy as the major reason. Here’s how his scenario of change worked out: “In addition to dealing with the economy, we were experiencing a couple of problems with our direct sales force. On the one hand, our salesmen were having difficulty selling our existing products in new territories; on the other hand, they were having problems selling new products into territories we had a presence in for years. Couple that with the dollars it took to support them and the decision to move to reps was sort of made for us.

“Once we made the switch, we’ve never looked back. Reps were the right move for us and we should have done it sooner.”

Preparing for the Personal Interview

Elsewhere in this issue of Agency Sales, we examine the dynamics of what attracts a rep to a manufacturer — irrespective of the manufacturer’s product offering. In the course of interviews with reps and consultants, we determined that there are any number of variables that have to be considered before a match between principal and rep can be made. Not much was mentioned of the interview that ought to take place between manufacturers and reps before any agreement can be reached. A manufacturer that we asked to comment on the recruitment and interview process noted: “Just as the independent rep must understand that the personal interview with a prospective manufacturer is important, at the same time the manufacturer must realize the weight that such an interview carries. Whenever I’ve approached an interview, I’ve made an effort to realistically and fairly present all aspects of my company (that includes goals, support, new product development, etc.). In addition, I’ve made sure that I’m just as prepared for the interview as the rep should be. Part of the preparation includes identifying key elements about the agencies that I’m interviewing. I make sure I learn what their objectives and philosophies are, what their territory is, their level of customer penetration and what other lines they represent.

“At the same time, I’m ready to discuss compensation, company management culture, succession plans, etc. Bottom line is that at the end of any interview, the rep and I know each other thoroughly and as a result, we’re better able to make a correct decision on whether we should move forward together.”