This is a direct quote from a rep I visited with recently. He told me that two of his lines had said just about the same thing. One company had been acquired by a European company and the other by an Asian multi-billion dollar diversified manufacturer. How and why do manufacturers make statements like this? Are they just misinformed? Or, is there something the rep business is missing?

The bottom line is that these manufacturers and, unfortunately, many others do not have a clear picture of the value of rep services they receive for their commission dollars.

Why is it apparently so simple for a manufacturer to throw out their sales force in a matter of seconds and not feel any sense of concern or panic? If they decided to close a factory, cut engineering, or raise prices 10 percent, there would be months of soul searching and hand wringing. Why is it so simple and easy to dump the reps?

Intangibles Support the Rep Business

The rep business is in some ways “intangible.” Yes, the rep contributes to the sales process. But, again from a rep on the phone, “You know I call on people all day to get our products specified, and when I succeed, I can’t get them to buy — the buying decision takes place with others all around the world.”

It used to be that a rep could get his product into the products of a customer and he would know that he would get paid commission on the shipments of his principal’s product into the manufacturer.

Today there is no mechanism for tracking many sales of components that have been “sold” by reps in one part of the world to manufacturers who have the product built thousands of miles away.

The rep function disappears into a soft, cloudy, mist of good intentions and estimated success. The rep doesn’t bring the order to the principal and say, “Okay, pay me my commission when you ship this!” No, the rep doesn’t know and can’t prove the chain of purchase to usage.

How Does the Rep Prove Value?

The rep firm needs to be a firm. That means the rep has to think about all of the field sales and marketing functions that need to be put in place in order to increase sales and market share. The rep can’t afford to say, “We can’t afford to do that!” Or, “It is not our job to do this!”

Today the rep must function as a branch office. If your rep firm was owned by the manufacturer and operated as a branch of the manufacturer, what would you be doing?

Planning and Forecasting

The first and foremost thing is planning and forecasting. The rep/salesperson is closest to the customer. The first thing a manufacturer is paying for is your knowledge of the market. You transmit that knowledge through your plans and forecasts.

Consistent, Timely, Professional

In accepting the need to be the manufacturers’ eyes and ears in the field the rep must also accept the fact that a regular pattern of communication is essential. We have found that quarterly updates are the easiest and most practical. We developed a form in Word that allows the person assembling the quarterly report for each principal to cut and paste the commentary from each salesperson.

In one case there are six people providing input. By taking all of the comments about one principal and putting them together into a single document, the reporter for the rep firm has the start of a report for that principal.

With that loose assemblage the editor takes over and creates a solid document which can be transmitted to the principal. We prefer to present the document with a PowerPoint presentation so that the executives from our principals “get it” and at the same time appreciate it.

Backselling the Branch Office

The Forecast and Status Report is the first step in creating an appreciation of the rep function and the value of having the rep provide branch office services.

Every one of your activities needs to be viewed as an opportunity to prove the value of your services. Nothing is obvious to the people at your principal. Most of the people you deal with do not have much experience working with reps. If you asked a member of the management to provide a description of your business operations including a proforma profit and loss statement, could they do it? I don’t think so. A recent article and talk for a rep trade association used the association’s research to demonstrate that even the reps do not have an idea of where the money goes.

Reps are generally too busy to spend much time analyzing the business. Their principals certainly do not have the data to analyze the operation of their rep’s businesses. It is up to you to explain your business to your principals.

A Lesson in Repping?

MANA offers many programs for manufacturing personnel that are designed to help them understand the business of being a rep and how to work with their reps more effectively.

You should know about these programs and be able to “sell” them to your principals. Getting members of the principal’s team to develop an understanding of your business should be a priority for you.

Promote Your Approach to the Business

Telling the manufacturer whom you represent what you are doing, how and why may seem very basic and unnecessary. But then again, do the people you work with actually understand the business from your point of view?

This type of backselling requires a comprehensive approach to your own business. Do you have plans for each customer for each significant line? Do you have a review system that puts you and your people under the microscope to see how you are doing building revenue and market share? Do you have a sales management system that holds all of your people accountable at all times?

Do your principals clearly understand your approach down to the account level? Do the principals know why you are taking this approach and do they support your approach?

Bottom Line Value

Is your rep firm providing these values? If you are, will your manufacturers be willing to just throw this service away?