Issue: September 2011

A Fool for a Client

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Involving a lawyer is the worst way to launch a rep-principal relationship, except for all the other ways that have been tried. (Apologies to Winston Churchill.)

This issue of Agency Sales examines the role of lawyers in the rep-principal relationship.

With all due respect to MANA’s friends in the legal profession, one thing I’ve never heard a rep say is: “I think my lawyer would make a great manufacturers’ rep. Years of experience in the practice of law is excellent preparation for a sales career, so my lawyer would do an outstanding job cold-calling prospective customers, elaborating on a product’s features and benefits, and closing big orders.  I think that once or twice a year my lawyer should go out on sales calls.”

The reason I’ve never heard a rep make that statement is obvious, but I have met reps who, although they don’t state it explicitly, through their actions make an equally flawed statement: “Based on my years of experience in sales, I am fully qualified to write a contract that specifies the roles, responsibilities, and commercial relationship between my company and my principals. As a matter of fact, I am so sure of my contract writing skills that I will bet all my future commissions on them.”

So, if it is obvious that lawyers shouldn’t try to step into the role of reps, shouldn’t it be just as obvious that reps shouldn’t try to step into the role of lawyers?

And even though reps often are great negotiators, without benefit of counsel they won’t necessarily know what they should be negotiating for. Under the laws of your state, are you better served to negotiate for the right to sue in court, or for the right to have a dispute settled by arbitration? Should you ask for your contract to be governed by the laws of your home state, or by the laws of the state where your principal resides?

A rep-savvy attorney will know the specific language you need to ask for to get a fair agreement, both in terms of getting your company promptly and completely paid while the agreement is in force and also after the agreement has terminated.

MANA members, both rep and principal members, have access to a specimen rep agreement and to a list of lawyers who know the rep system of selling and can help to draft a fair agreement. We encourage you to contact these lawyers, many of whom will extend a 15–20 minute free initial consultation, to insure that you and your company are rewarded appropriately for your hard-won sales results.

“A man who is his own lawyer has a fool for his client.” 

— 19th Century Proverb

The Agreement You Sign Today Affects Future Commissions

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MANA periodically and not infrequently receives requests for a “simple” agreement. We offer the Manual for the Creation of a Rep-Principal Agreement that includes sample agreements, but those apparently fail the “simple” test. Want a “simple” agreement? Take one of the sample agreements and delete what the user considers unnecessary.

Several years ago MANA spent considerable effort to create the Manual for the Creation of a Rep-Principal Agreement. The New York/New Jersey MANA chapter instigated the effort and the MANA attorney members donated considerable time to put it together. We updated the manual last year. We intend the manual

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Handshakes: No, Contracts: Yes

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If at one time relationships between independent manufacturers’ representatives and their principals were cemented with a handshake, that time has long passed. At least, that’s what a number of reps maintain as they enthusiastically advocate for written contracts.

 

It’s interesting that while two Connecticut-based reps, who were among the first interviewed for this article, seemed to minimize the need for contracts, almost without exception, every other rep contacted came down strongly on the other side of the fence.

The two Connecticut reps maintained that the existence of contracts did little to make them feel secure, with one saying, “If

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Ideas That Are Mandatory to Grow Business in the New Global Business World

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Creativity, out-of-the-box thinking, forward thinking, fresh thinking, new ideas, innovation, and reinventing your business are all important and mandatory for being able to grow business in today’s global business world.

It is fairly obvious to most that new products and services are evolving at a fast pace. Those business organizations with new products and new services seem to be growing and those without are declining.

New and creative ideas need to be applied in these areas:

• New products and new services

• Quality improvement

• Cost savings

• New markets

• New applications

• Customer needs

You must aggressively

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Selling the Dr. Seuss Way

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 “I am Sam. Sam I am. Do you like green eggs and ham? Would you like them here or there? Would you like them in a box, would you like them with a fox?”

I think most people have read this Dr. Seuss tale either as kids or to their children. What is interesting is the relevance this story has to selling.

• First of all, Sam is selling a product and although his prospect is not initially interested, Sam doesn’t let that deter him from asking.

• Second, Sam consistently offers the prospect a choice when trying to close

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Joint Sales Calls

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As a Northerner suffering through a long winter of snow and frigid conditions, I look forward to the signs of spring. The buds on the trees, convertibles with the tops down, waiters polishing the patio tables and of course e-mails from my principals in the South, wanting to come up and make some joint calls on my territory now that the snow has gone.

Most reps these days have to manage a number of product lines on their line cards to make a decent living. Many factors go into the choice of lines a particular rep decides to handle.

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The Incredible Power of Small Business

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It takes a lot to knock small businesses out of the saddle. When times are tough, they hunker down and hang in there. The workdays get longer and the take-home pay gets shorter. Even banks shutting off the lending spigot doesn’t deter small businesspeople. They whip out the credit cards and keep going or they go online and tell their story to the micro-lenders to find those who will take a chance on them.

 

Throw the little guys a curve and they’ll figure out how to hit a home run. If that sounds a bit romanticized, it isn’t. As

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Are You Giving Away Your Profit?

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Want a quick way to destroy sales motivation and profit at the same time?  Picture yourself as a sales manager who suddenly receives a phone call from a salesperson who is on the verge of closing a sale. Here’s a sample of that typical conversation:

Salesperson: “We have to cut our price to get the first order. Then, once they see what we can do for them, we will be able to raise our prices.  I’m sure once they see how good our service is, I’ll be able to convince them to pay the regular price.”

Hmmm.  Really?  I’ll let

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There Are No Short Cuts When It Comes to Changing the Sales Organization

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I had met the chairman 10 years ago. As a part of our simulation process, he was confronted with a four-inch putt, and he nonchalantly knocked it off the green declaring it a “gimme.” If you’ve played golf, you’ve taken a “gimme.” As life in golf goes on, the “gimmes” get longer and longer and sooner or later your opponent doesn’t “gimme” you that two-footer and the club championship is lost. It’s like selling. Sooner or later that long-standing customer doesn’t “gimme” you the business, and the account is lost.

The amazing reality of the “gimme” putting phenomenon is that … Read the rest

Kudos to Reps

A retirement dinner earlier this year for a manufacturing executive provided an ideal opportunity for a bit of a primer on what manufacturers should value in their rep partners. As the executive was recalling his more than four-decade sales and marketing career, he made it a point to mention how reps — many of whom were in attendance at the dinner — had played a major role in his success. The manufacturer vouched for the fact that the reps who got his attention and proved to be the best business partners to go to market with possessed the following characteristics:

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Make e-Marketing Work for You

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We’ve all heard of e-mail marketing, but it can appear daunting with all the laws, spam, filters and confusion over the best method to employ.

Whether you’re an e-marketing novice or you’ve tried it before, learning the tricks of the trade can make the process more comfortable and successful. After reviewing the campaigns we’ve run for customers, we came up with the following tips to achieve the best results from your e-mail marketing campaigns.

Start With the Reader’s Point of View in Mind

This may seem obvious, but you have to approach all marketing from a reader’s point of view.

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Globalization — Current Events

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In previous articles and speeches, I have addressed you on international issues such as the relationship of the sales representative with foreign principals; contractual terms regarding international arbitration; and cultural and legal differences between “agent” and “representative.” Commercial globalization, however, is a metamorphosis, and as it evolves, it causes the business community, and at times our legal and business framework, to undergo its own changes. Unfortunately, the more at ease we are with it, the more lax we become about some of the rules that govern international trade, and we may miss changes that it brings to our domestic rules. … Read the rest

When and How a Sales Rep Should Retire

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Sales reps, especially after many years in the business, often start to think from time to time about retiring. Much to the surprise of many, they have trouble focusing on the decision. As the younger generation would say “What’s up with that?” Many sales reps always thought they would want to retire at some time in the future, but now they are beginning to wonder if maybe they really don’t, shouldn’t, or won’t be able to let go of the business they have known for most of their lives.

When considering these questions, remember that what you are facing is

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