Existing and prospective members of MANA are never alone. One of the best examples of this is the conversations and exchanges of ideas that take place on the MANA LinkedIn discussion page. For instance, when a manufacturer recently asked how to structure rep commission payments, there was no shortage of suggestions in response.

Here’s how the manufacturer posed her dilemma: “I’m looking to add an independent sales rep to market our OEM equipment. Where can I find information on how to structure commissions and the sales rep agreement? An average sale could be around $250K. I don’t have a direction of what is appropriate to negotiate.”

The benefit of the MANA LinkedIn community is that there’s rarely a time when someone doesn’t have an answer to a question or a solution to a problem, and that was the case once again.

Hardly unexpected were suggestions that this manufacturer take advantage of what MANA has to offer. Advice touting the benefits of association membership was immediate:

•   “Join MANA, get educated and hire a small rep group who will give you a lot of attention.”

•   “Have you thought about joining MANA? The association provides a commission survey for members as well as information on how to structure the agreement and sample agreements as well. If you are looking for reps, MANA can connect you with those who sell into the OEM markets.”

More detailed suggestions were forthcoming from two reps in the following:

•   “There are a number of considerations with regard to hiring independent reps. Are you looking for geographically specific or market-specific reps? Are you looking for several reps, or just a couple? How much technical expertise will they need? What is the gestation period for sales? Delivery time? Local support requirements?

“Commission structure also can have many considerations. Commission rates for independent reps can be anywhere from 2-20 percent depending upon the market and product. Commission splits for order entry, engineering influence and delivery point, among other items, might be considered.

“Bringing on independent reps is absolutely the best way for manufacturers to go to market, but there are some market influences, sales/marketing planning and internal structure considerations as you go forward.”

•   “I am both an independent rep and a sales consultant. I’m sure you have already calculated this, but what is the most you would be willing to pay a rep? I also understand that you probably don’t want to add the commission to the $250K because that could make you less competitive. There are many ways to structure commissions and I know it’s confusing, but you have to understand that you are forfeiting some of your profitability towards a real value. You may like to look at www.manaonline.org. This is a good resource for exactly what you are considering.”

Ways To Get the Reps’ Attention

While the previous item focuses on the importance of establishing commission rates for reps, there’s more to keeping reps happy and to holding their attention than just commissions. For instance, if a principal is paying a competitive commission rate, then he might want to turn his attention to some other areas to satisfy his reps. For instance, advertising, promotion, field support and regular communication. Give these a try and see if they don’t further incent the rep to do the job they’re contracted for.

Acclimating New Reps

If MANA’s LinkedIn page is one place where manufacturers and reps can network, industry meetings remain a reliable opportunity for reps and manufacturers alike to get problems solved. Earlier this year at one such meeting, a manufacturer’s sales manager approached some of his non-competitive peers looking for tips on how to get several new reps comfortable with their new marketing partner.

According to the manufacturer, “For a number of reasons, including several retirements among reps we worked with, we’ve signed on several new agencies during the past year. Faced with getting all of them acquainted and comfortable with how we go to market, I was looking for suggestions from some of my fellow manufacturers.” Suggestions she got — and in a hurry.

•   Don’t waste any time in beginning the orientation process. Begin it immediately, and the best way to do that is to kick off any orientation with a factory visit.

•   In the course of that factory visit, make sure all of the rep’s duties are clarified. You can never over-communicate, and completing this task at the beginning will head off problems down the line. Take the time to review all of the company policies that relate to the sales function and make sure the rep becomes familiar with how you invoice, collect, provide technical support, etc. Also during the factory visit, ensure that reps get to meet as many of the manufacturer’s personnel as possible — especially those people they’ll be dealing with on the phone.

•   If more than one of your reps takes part in the factory visit, establish a means by which all of your reps can communicate with each other. Naturally, the establishment of a rep council is recommended.

Tips From the Other Side of the Desk

Elsewhere in this issue of Agency Sales, a rep who spent considerable time as a manufacturer is interviewed. It’s hardly unusual to find reps who used to be on the other side of the desk. Likewise, it’s just as common to find former reps now working for manufacturers. In speaking with a manufacturer’s sales manager, who used to be a rep, he offered his thoughts on how his past experience is beneficial to him now.

“When I communicate with our reps, I think I’m more conscious than someone else might be of making sure they properly target their customers,” he explains. “To me it’s critical that they focus on the specific customer needs and keep their presentations tightly focused on meeting those needs or on solving customer problems.”

He continues that “I’m a big advocate of advising the rep to provide for a great deal of give-and-take during their presentations. If only the rep is speaking, there’s very little opportunity for him to learn what the customer truly needs and wants. Time has to be built in for questions, but the rep had better complete his homework so he anticipates all the questions and can answer them properly.

“And finally, I stress how important it is for reps to stay abreast of current product and industry developments. There’s nothing better than a rep who is not only informed on all current product applications, but also on all industry trends. When both elements are included in a presentation, the customer can’t help but be impressed. It’s up to the manufacturer to encourage his reps to stay informed.”

Ask, and They Shall Receive

A manufacturer told us recently that as his staff has shrunk, he’s had to pass some marketing tasks along to his network of independent reps. At the same time, he says he’s well aware of the pressure this places on his reps and he’s not surprised when a rep complains. To solve this problem, however, he says all a rep has to do is raise the subject and ask to be paid. “If one of my reps approaches me, my reaction is going to be that this is an acceptable subject for conversation. As a matter of fact, if I ever learned that a rep was complaining about not being compensated for something he was doing, I would go to him and let him know that he hasn’t been taking advantage of the relationship we’ve worked long and hard to establish. Rather than complain, I‘d want both of us to put our cards on the table, consider how the situation is currently being handled and then solve our mutual concerns.”

Information — the More, the Better

The majority of manufacturers support their new product introductions with advertising and publicity in national trade publications. If the effectiveness of such efforts was ever in doubt, here’s what one rep has to say: “New product advertising and support materials are critical to the success of what we’re doing in the territory. And, quite frankly, the more of this kind of activity, the better it is for us and our customers—not to mention our principals.”

This rep went on to explain that just as it is for everyone else, time is his most important commodity. “As a result, I don’t have time to read every industry trade publication that comes across my desk. What I do, however, is to closely scan all the publications I receive. Then, when I spot a product or service that’s germane to my industry, I rip out the page, ask my principal for detailed information and then make it a point to share the information with my customers.

“I look at this as a true team effort, and it’s this kind of support from my principals that lets me ensure a steady stream of pertinent information is provided to my customers.”