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A manufacturer with more than three decades of going to market with reps made the point recently that there’s more to evaluating the rep’s performance than just considering the bottom line.

According to this manufacturer, “From day one, about 30 years ago, when we first started working with reps, we’ve always made it a practice to evaluate their performance. Our philosophy has been that if we don’t cast a careful eye over what they’re doing for us, there’s no real way of knowing if this is the most cost-efficient way to bring our products to market.

“When we started with this practice, our evaluation basically consisted of just looking at sales in the territory and determining if they matched expectations that our marketing people said we should expect. Even after a few years when we were able to enjoy the luxury of several years’ experience, we still just threw numbers into the review. Things changed a couple of years ago, however, when our national sales manager suggested that there were other important variables we ought to be considering in our reps’ performance.”

It was then that the company took a careful look at what other services reps were providing in addition to just making sales calls and following up. “For instance, several of our reps were conducting mini-trade shows that we never really knew about. Others regularly conducted in-plant seminars for customers. The point is that there’s much more to a review than just looking at sales. We weren’t unhappy with our reps at all when we undertook this new approach. But when we discovered what they all did for us, we certainly enjoyed the view that was provided of our marketing partners’ activities.”

Considering the Relationship From Both Sides

It rankles one manufacturer when he hears some of his manufacturer peers complain about the relationship with their reps. “Here’s the real problem as I see it,” he explains. “From the very first day of the relationship, all they’ve done is to consider the relationship from their perspective. What they’ve got to do is also look at it from the reps’ side. They’ve got to know what the reps’ needs are before both sides can work smoothly together. What I’m speaking about here is to have a meeting of the minds on all subjects including commission payments, factory support, advertising and other questions that manufacturers seldom ask their reps. As an example of what I’m referring to, I’ve always made it a habit to ask a prospective rep where he wants his or her agency to be in five and then 10 years. The answer to this lets me know something about their needs and goals. It also tells me something about how they’re looking at us as part of their plans. After I determine how we fit into their future plans, I then have a lot more to go on when making decisions on which agency I’m ultimately going to appoint. At the same time, this doesn’t mean that all reps have to have lofty pie-in-the-sky goals for us to appoint them. Consider, for example, a territory is small and not growing dramatically. If the rep tells me that he wants his agency to remain at the same level it is now in five years, that’s not all that unrealistic. With all other variables being equal, I’d probably go to market with them. On the other hand, if a rep in a rapidly expanding territory lets me know the same thing, then I might be less inclined to consider them.”

Taking a Look at the Professional Rep

If the focus of this issue of Agency Sales is the “professional” principal, it’s only fair to cast an eye in the direction of the rep — specifically the “professional” rep. Here’s what one principal says he looks for in his professional outsourced sales force: “In my opinion the best reps are those that spend most of their time on a first-time call clarifying perspective customer needs that they later use to make tightly tailored presentations on their second and other calls. There’s a tendency today to believe that we have everything we need from the Internet and other sources in order to complete a bang-up sales call the first time. But that’s just not the case. It really takes a face-to-face meeting to truly get a handle on what is going on. I’ve noticed over the years from making calls with my reps that those who sell best are those who operate this way. And they also tend to be those who have considerable experience. The newer and younger people tend to believe that everything they’re able to pull off the Net is true and useable. That’s simply not true. It’s sure a good start, but it’s only part of the entire picture.”

A Look at the Unprofessional Principal

If in this issue of Agency Sales we’ve considered attributes that the professional principal must possess, it’s interesting to take a look at what a few reps consider to be characteristics of the unprofessional principal. Consider the manufacturer:

• “Who understands the value of communicating regularly, but who calls with nothing to say and winds up wasting my time.”
• “Who won’t listen to me and who won’t listen to my customers. These are the ones who are usually one-dimensional and have no tolerance for anyone else’s ideas or feelings.”
• “Who bends the rules, even if the rule he bends benefits you. You never know what he or she will ultimately do when the chips are down.”
• “Who makes a big deal whenever I make a mistake, and never mentions all the things that I do well.”
• “Who fails to delegate responsibilities that should rest with the agency. These are the control freaks that undermine the principal-rep relationship faster than anyone else.”
• “Who gossips. For instance, I have one principal who talks about other agents to me and I know that he’s talking about me with others. Fortunately all of us agents are aware of his habits so we take it with a grain of salt. However, this type of behavior does diminish his status in our eyes.”

Reps Value Training and Education

Conversely to what reps don’t want to see in their principals is what they wish them to possess. High on that list is a belief in training and education. A manufacturer concurs with the importance of training when he says, “We’ve had great success by going the extra mile to pay our reps’ way when it comes to innovative training. We’ll contact our reps well in advance and even offer to pay their travel to and from the job site to watch the installation and testing of a new product. Usually the presentation is conducted by our own engineers so the reps are familiar with them and much more receptive to the information. At the same time, we’re aware of how difficult it is for the rep to take time away from his territory, so we only make this kind of offer when it’s truly innovative and know it will be worthwhile.”

A Written Contract — To Have Or Have Not

For the longest time, rep-savvy attorneys have wrestled with the subject of reps who work with their principals on a handshake agreement. While there’s more and more movement in the direction of having the written contract, the subject never really seems to go away. Attorneys offer advice such as, “A handshake contract isn’t worth the paper it’s written on” to “A handshake is better than a poorly written contract.” But one manufacturer offers this sage advice: “”We’ve always followed the practice that it’s critically important to have our reps under contract. We choose our reps carefully. That means that we spend a great deal of time searching for and interviewing reps, visiting them and having them visit us and getting to know all of our factory personnel. Figuratively, they become a real part of our family, our organization, our business culture. Having a contract ensures that both sides of the agreement are comfortable with the terms — it’s much like a marriage. If a rep ever approached me and indicated that a handshake type of arrangement was acceptable to them, I would have to admit that I couldn’t take them seriously. I’d think he wasn’t serious about conducting business with us. The contract is a means for formalizing the relationship, and that’s important to us and should be to the rep.

“It’s a very tough, competitive world out there and I think there should never be any hesitation on the part of manufacturers and reps to enter into a contract. The contract simply spells out the rules of the understanding. It would be foolhardy to proceed without one.”