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It’s more important now than ever before for independent sales representatives to consciously plan their relationships with principals.
- Why do some representatives seem to thrive and others just muddle along?
- Why are some the first choice for lines that constantly are changing representatives?
- Why do major principals want to involve some agents in their business?
- Why do major principals choose one agency to work with when they are not working with independent representatives in general?
Backselling is the answer to all of these questions. Representatives who are consciously backselling are seeing major benefits.
In a recent situation a major producer of equipment had moved away from independent representatives for their products. The principal was using distributors as their exclusive sales channel. They have been successful this way, but one representative firm kept after them to consider adding agents back into the mix.
This firm has grown and has done a very effective job of backselling. In addition, this firm represents the principal for other product lines in their multi-billion dollar portfolio. The principal asked the firm to help them build a plan to work alongside the established distributors to enhance their sales. The representative firm is the only one currently repping this line.
The principal realized that the distributors will benefit significantly if the agents open more doors and make more sales, but the principal did not think they could force the distributor to pay the commission — so the principal is paying the rep’s commission.
A Win for All
This is a significant increase in the cost of sales. But, if the agent is right and can come through with a 10-25 percent increase in sales through the distributor, the manufacturer wins. They get a large increase in volume and related gross profit, a very happy distributor, and a modified sales system which is open to more and more marketing and sales support to substantially increase share of market and profitable volume for the factory. The representative’s commission becomes a minor issue for the factory.
In every case where we have implemented an aggressive backselling marketing and sales plan the agency’s personnel have seen significant benefit from increased respect and understanding from the regional and top management personnel of the principal.
Changing the Nature of the Relationship….
Backselling is a proactive tool for penetrating the principal’s world. Because so few of the sales executives and regional managers have a clear understanding of the independent representative’s business, agencies must step up their work to educate the principal’s personnel.
Begin With a Powerful Profile
When an agent determines that he or she must produce a document that presents the agency in a truly professional manner, things begin to happen. One representative reported that after handing out his new profile at a meeting with one of his most important principals, the reaction was, “Gee we didn’t know that about your business. We like the way you are presenting the business. This helps us tell our people about who you are and what you do. This is great!”
The agent was so excited about this reaction he had to call me as soon as he was away from the principal. His report made my day!
The Profile Is Meant to Be Used
There are many ways to use the profile. The most important thing is to give it to everyone at a principal. It doesn’t matter what position the person has, the more the merrier. From the engineering department to the credit department, the more the employees of the principal know about the firm, the better.
Reactions are generally positive. The respect level goes up and the understanding of the agency and its business expands. Of course, the profile has to be a very professional presentation.
Reporting Is Vital
The agent’s firm is the branch office for the principal in the territory. Some representatives understand this fact, but do not want to go all the way. Many agents are concerned about telling the principal too much. The concern is that the principal may determine that he does not need the agent. This level of paranoia stands in the way of an effective backselling program.
No Fear!
Representatives cannot operate from fear. Yes, the contract is 30 days. Yes, there are any number of people who can push a principal to go direct. Yes, there are any number of people who can say bad things about your agency. Backselling minimizes the impact of the naysayers.
All of these negatives are the most positive reason for getting out in front of the reporting opportunities and telling principal what is going on. Letting the principal hear from you often is a vital part of the backselling program. In addition, regular, scheduled reporting becomes a powerful weapon against negative, anti-rep attitudes within the principal’s organization.
The 90-Day Action Plan
There is no better way to proactively show the principal that he is getting his money’s worth from commissions than by developing a formal 90-Day Action Plan System. By voluntarily reporting to your key principals every 90 days, the agency stays in front of the sales management team and makes their work much easier. The 90-Day Action Plan is a clear indication that the rep firm is managing itself in a very professional manner.
Create a line card and line card presentation that backsells your firm.
The line card can be a powerful backselling tool. Many agents have a fear of showing all of their lines. We have found that any reasonable list of lines can be packaged on a line card to make the rationale for having the lines logical and positive when presented to the principal.
In one case we organized 25 lines by the functional area the products serve. In this case, we used a color scheme to make a line card that fell neatly into three business categories. The salespeople learned to present the line card to customers and to principals in a way that clearly illustrates why they have each of the lines.
In another case lines were divided between “strategic” lines and “specialty lines.” The strategic lines represent 80 percent of the firm’s commission income.
But there is good reason to have non-strategic lines. Calling them non-strategic would offend those principals and not properly position those lines. We determined that we could call this portion of the line card “specialty lines.”
Specialty is exactly what they are. These are lines that do not sell frequently, but when they are sold, the orders are substantial. These lines truly represent the power of multiple-line selling.
By having these lines in the agency package, the representative is able to serve the customer better. He presents lines that solve problems for the customer and keeps competition to his strategic lines out.
The customer and the distributor appreciate the representative for representing these products. The buyer knows that if this high-quality agency has these lines in their package, they can count on the same high-quality service and support that they receive for the strategic lines. This synergistic selling is good business for everyone.
Backselling Bottom-Line:
When an independent representative embraces backselling, it entails:
- A professional profile
- A well-structured and thoroughly explained line card
- Proactive reporting through the 90-Day Action Plan
The representative has built a backselling strategy that will lead to significantly greater success for their business.
It takes time, effort and money. But, if your key principals are paying you more than $1 million a year in commissions, don’t you think you should be doing some things to protect that income stream? The investment in your backselling program is buying income protection insurance.
Backselling Pays!
Agents Advocate Backselling Strategy
John Haskell (Dr. Revenue) has long been touting the benefits of backselling. Among the many independent manufacturers’ representatives who have followed his advice are the following:
P.J. Martini
President, Martini Associates, Annapolis, Maryland
“In the old days of being a rep, my father was always saying: ‘You have two jobs as a rep, selling the customer and selling the principal. Sometimes selling the principal is the most time consuming and difficult — but essentially the most important.’
“Well this is true today. John Haskell has coined the phrase ‘backselling’ and he has hit it dead on target. In the rep world today, you must always be selling yourself, your agency, your successes, your knowledge of the customer and your knowledge of what the principal wants from you.
“Doing this is ‘backselling,’ my dad’s ‘selling the principal.’ But today principals need even more of the ‘selling.’ They have many reasons to question ‘Why do we pay you so much money?, or, ‘Can we hire a direct guy for less and still get the same or even better, improved results?’
“Well, John answers this by stressing the need to always backsell. The owner of the agency has to accept and understand this concept as essential to the agency’s survival.
“Once you accept it as the owner, you can begin to get your employees to support it. Once their support is there, you then operate in this new way. Well not really a ‘new’ way, just in a ‘redefined old way.’ Essential? Yes. Easy? No, but is success a walk in the park? I don’t see it that way or everyone would be a rep!
“The backselling philosophy works in today’s rep world, period!”
Mike McGuire
Managing Partner, Zink Foodservice Group, Columbus, Ohio
“Working closely with our vendor partners made it clear that the factories needed information from their multi-line sales agencies. Most of them didn’t know what type of info they wanted or even what format to use to collect it — but they wanted it to feel they had a handle on our activity in the territory.
“As such we looked closely into our processes and invested in CRM systems that could easily provide them with detailed information on all of our important opportunities.”
Jim Zink
Managing Partner, Zink Foodservice Group, Columbus, Ohio
“When we decided to make backselling a part of our DNA, we immediately began to see more and more opportunities for growth. Backselling forces you to plan and organize your business around value-added activity.”
Wayne Jones
Managing Partner, The Hansen Group, Atlanta, Georgia
“I met John Haskell through my affiliation with MAFSI. I knew he worked with another organization, Zink Marketing, that I have great respect for. As our company was growing and we were being pulled in all directions covering sales and more management duties, I asked him to analyze what we could be doing better as an organization. It was then that I was properly introduced to the philosophy of backselling.
“Upon using the new backselling techniques in my own territory, it has certainly been well received by everyone! There is a heightened understanding by all of exactly who we all are, where we work, and exactly what we do at The Hansen Group. Too many times, salespeople take for granted that a customer really understands what your company is and exactly what you offer.
“The reception and understanding of what The Hansen Group offers has increased to new levels. The response from our manufacturing partners has been exceptionally positive, as they deserve to know how we are promoting their products and what we project the sales results will be.”
Kevin Weinacht
Weinacht & Associates, Collinsville, Illinois
“We designed a professional profile to tell the Weinacht Story — four pages, providing information on our company, territory, sales personnel, and the product lines we represent. Our manufacturers and customers develop awareness of our product lines and who we are.
“Since we started using these on a regular basis, we have noticed more appreciation and even more acknowledgment of our services and quality representation. We are always asked by customers for more of our profiles so they can pass them out to their customers and employees.
“I feel that the profile and the line card were major changes that improved the way we do business today. This valuable change is all because of Dr. Revenue’s backselling structure.”
MANA’s “Steps to Manufacturers’ Agent Professionalism” Program
Backsell Your Representative Firm to Your Principals
MANA defines itself as the association for professional manufacturers’ reps and those who aspire to be professional. We believe the more professionally you operate your business, the more successful you become. The greater your professionalism level, the higher the quality of principals you sign up. The higher their quality, the greater your sales and commissions.
This issue of Agency Sales magazine examines the importance the independent manufacturers’ representative “backselling” his value to principals. The manufacturers’ agent business is the only one where principals may fire you for doing too good of a job. Either they resent the money they send you or the accountants assume they can save money if they hire direct salespeople. Either way, they make the decision to fire the representative and go direct based on false premises.
Professional manufacturers’ agents must know how to backsell their value to principals to minimize the chances of being fired for doing too good of a job.
Educational Resources
Agency Sales articles:
“Backselling Pays Fast: Return on Investment Can Be Big and Fast” — Independent representatives must appreciate the fact that principals are customers. That’s why it’s so important to develop and protect critical relationships. John Haskell (Dr. Revenue) details the efforts agents must take to solidify relationships.
Teleforums:
MANA staff and industry consultant Nicki Weiss instructs participants on the various strategies needed for representatives to market their firms to principals. Among the goals agents should have for their marketing efforts are to maintain existing relationships with principals and attract new principals. The major challenges of each are examined.
- Backselling to Principals — includes a downloadable PDF sample of a manufacturers’ representative profile
- Marketing Your Rep Firm to Principals
