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If a manufacturer ever wants to identify a conversational flashpoint with its independent manufacturers’ representatives all he has to do is introduce the subject of house accounts. House accounts are guaranteed to garner opinions from all quarters, and it’s a subject that never seems to go away.

Looking through the pages of Agency Sales of more than a decade ago, one manufacturer offered his thoughts, which are as applicable now as they were then. According to the manufacturer, who boasted of more than 35 years experience working with agents, “We’ve always adopted a philosophy that we treat our reps as part of our family. We don’t look upon them as ‘just those guys who get paid a lot for selling something for us.’ We recognize the fact that they’re a variable cost. We — and they — sell a lot of capital equipment, and everyone makes a lot of money. On the other hand, when things aren’t so hot, they don’t get paid as much. Having said that, we believe that reps are paid because they know the territory, and we support the heck out of them to let them do their job best. If we introduce the concept of having house accounts for any number of reasons, then that’s not supporting the rep. That would work against what we believe in. If anything, that would motivate against them doing their best. Our feeling is that by the way we work with them, we get a much higher mindshare.”

When this same manufacturer was asked what advice he might offer a fellow manufacturer who was considering introducing house accounts, he continued: “If you maintain that the rep is an integral part of your sales channel, then it’s important that you talk the talk. By introducing house accounts, you’re differentiating your reps by isolating that account, and you’re isolating it for the wrong reasons. For instance, one of the most important reasons for using reps is that they call on multiple purchasing points within a customer. They can get multiple sales within that facility. So by turning it into a house account, you’re not getting the benefits of the rep’s abilities. How many times does the rep come across a new opportunity with a customer because he enjoys better penetration than you could achieve? You get much more motivation by letting them go after anything and everything they can get.”

He wasn’t done yet when he said: “Some companies have a problem when they have to write a big check to their reps. That’s not me. When I have to do that, I’ll be sure to send them a little ‘love’ note congratulating them on the effort and thanking them for the help. Simply stated, that’s our philosophy. We run our business well and our philosophy allows us to head off any problems ahead of time.”

Work Done After the Sale

There’s a mistaken belief among some manufacturers — we hope it’s those that don’t have long track records with agents — that once the sale is made, the agent’s job is done. According to an industry consultant, that’s a belief that both sides, agents and manufacturers, ought to be working hard to dispel.

“What it comes down to,” he maintains, “is that if a manufacturer doesn’t see or hear from his rep, then he just assumes that he’s not doing anything and is just there to collect the commission. For the rep, he ought to be doing all he can to remind his principals of his constant presence in the field and all that he does to service customers. This can be done easily in a number of painless ways, including communicating to the manufacturer on a regular basis and having customers provide documentation of the services that the rep provides.”

He doesn’t leave the manufacturer off the hook, however, when he says “If manufacturers have chosen to work with agents, it’s their responsibility to know about the numerous and varied services that reps provide — even if the rep doesn’t constantly remind the principal of what he’s doing on their behalf in the field.”

Benefits of a Previous Career

A MANA associate member wrote recently describing how his previous career as an independent manufacturers’ representative has paid off for him in his new position as vice president of sales and marketing for a manufacturer. “I look back at my more than 20 years as a rep as perhaps the most valuable time I’ve spent in sales and marketing. If nothing else, all that time working as a rep allows me now to work with a ‘gut feeling’ of what makes a rep tick. It also allows me to know what my reps are thinking — often before they do.”

Does this career-honed knowledge allow him to boast of a better track record than others when it comes time to picking agent partners? “Could be,” he says. “It allows me to know that I can work with someone even before we open the dialogue concerning line lists and everything else you have to cover when considering an agency. The bottom line is that I want and need reps who know how to exercise autonomy over their lines and their territory. The fact is I don’t have the time to manage the territory for a rep. If I did have the time, then I’d hire direct people and manage it myself. That’s why I want and need reps. I want them to have and to show the skills they need to successfully participate in the process — now and into the future.”

Creating That Lasting Impression

When a manufacturer recently was asked to recount how some of the agents he’s worked with have created a positive first impression, he took a moment to think and then the floodgates opened. According to the manufacturer, “I’m a firm believer that the initial impression is the most lasting impression. That’s why some of the things some reps have done during our first meeting have really stuck with me. As examples:

• “One rep that has been with us for more than two decades created a matrix of his existing key principals. Admittedly, these were principals he was going to use as references anyway, but by putting them in the matrix, we saw them quickly and all together. Believe me, it made a lasting impression.
• “Then a tried-and-true method of getting me to pay attention is to list any and all sales/marketing awards that individuals in your agency have been honored with. There’s no sense in achieving the recognition that comes with an award if you don’t spread the word.
• “And finally, I can recall another agency that briefly wrote up the steps the agency had taken on the way to gaining major orders with important customers. In one case that still sticks with me years later, an agency pinpointed the major contributions they made on the way to signing a more than $3,000.000 order with a customer. My immediate thought was if he could do that with one for one of his principals, he could certainly do something similar for us.”

The manufacturer concluded by saying that these were just a few of the steps reps could take, but the most important consideration was that “I was impressed by agencies that realize the importance of that first meeting with us and they made the extra effort to make sure we didn’t forget them.”

Steps to a Disastrous Field Visit

After reading a recent article on how to put together an effective visit to the territory with one of his agents, a manufacturer contacted us with a story on something quite different. According to the manufacturer, “If I’m to be totally fair about my appraisal of the rep, I’ve got to be honest about my failings — and, I did fail big time. First off, I didn’t provide him with sufficient time to put an effective visit together. In hindsight, the least I could have done was to give him 30-days notice to develop an itinerary complete with critical customers to visit. By critical customers I mean customers for which there would be a reason to visit. Neither the rep nor I — nor the customer for that matter — have time on our hands for me to come in for a social visit. If there’s a reason for me to be there, I should be there.

“If I do nothing else, I guarantee that in the future I’m going to let my reps know exactly what it is I want to accomplish. I’ll specify the key customers I‘d like to see and detail the talking points.

“The key to everything I’m talking about here is that I and other manufacturers must make the concerted effort to work closely with our reps to ensure that the goals of each of us are met.”