Issue: August 2014

And the Pendulum Swings….

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image of a pendulum

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Sometimes trends just sneak up on you.

I’ve noticed a change in supply and demand for manufacturers’ representatives: Manufacturers’ demand for manufacturers’ representatives is up, and the supply of manufacturers’ representatives is down.

How did I reach that conclusion?

  • When I speak to MANA’s new manufacturer members the number-one reason they’ve joined is to access MANA’s database of elite representatives. Or, as economists would say, demand is up.
  • I also speak to manufacturers’ representatives whose MANA membership has lapsed. Overwhelmingly they are Baby Boomers who have retired. Or, as economists would say, supply is down.
  • To get the right rep on board, manufacturers are increasingly willing to invest in territory development fees to offset representatives’ cost of pioneering new territories. Or, as economists note, when demand is up and supply is down, the available supply is more highly valued.
  • And, finally, new manufacturer memberships (demand) are far outpacing new representative memberships (supply).

What happens when demand for representatives outpaces supply? Manufacturers compete for representatives by turning over house accounts, offering extended termination terms, adding Life Of Part/Life Of Program (LOP/LOP) clauses to their contracts, and helping representatives with territory development costs.

That sounds like it’s a good time to be a representative, but it’s important for representatives that the pendulum does not swing too far in that direction.

A manufacturer who struggles to find a representative for a particular territory has two obvious choices: Offer extra incentives to the best representatives or consider hiring a direct salesperson.

So even if having representatives in short supply might look like a boon for representatives, it’s important to remember that fewer representatives available will mean that more sales forces will be direct. To keep our industry healthy, it’s important to help new representatives join our industry.

In this issue, we look at one MANA manufacturer member’s creative solution for getting more young people into the representative industry. Now in its fourth year, Twin City Fan and Blower’s ingenious solution is to hire eight recent college graduates and train them in their business, and then make those trainees available as new hires to its network of 150 worldwide representative agencies. Congratulations, Twin Cities Fan and Blower, on your creativity, and thank you for your outstanding support for MANA and the representative system of selling.

Succession Planning —
So What, Now What?

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I found it interesting when asked to write this article that there appears to be some karma in timing in my personal case, as it seems succession planning in more than one form is taking over my life. The first factor is that I will be coming off the board at the end of April 2015, so this is likely the last time I will be asked to write an article as we plan a “successor” on the board from an international perspective — I can assure you that it is not an easy chore to find someone that is … Read the rest

Key to Succession Planning: Start Early

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How’s this for a worst case scenario?

An independent sales representative who was the founder of the agency works long and hard for years to attract, grow and keep profitable lines. He succeeds through the lean and fat times and builds a reputation for professionalism on a foundation of solid relationships with his customers and principals. Then the day comes when he decides to leave the business, but:

  • To whom does he leave the thriving business?
  • If he’s the one responsible for those solid business relationships, what happens to them when he’s gone?
  • How does he get any value out
… Read the rest

Program Places Trained Pros With Agencies

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At the same time independent manufacturers’ representative firms should be mapping their future succession plans, Twin City Fan & Blower is working to supply their agencies with a steady stream of professionally trained personnel that should seamlessly fit into agency succession plans.

The Minneapolis, Minnesota-based designer and manufacturer of industrial and commercial air moving equipment has developed an in-depth six-month training program based out of its headquarters.

According to Nathan Stublaski, application engineer II, “We work with more than 150 independent sales representatives across the country who play a critical role in selling our product lines for final placement in … Read the rest

Principal Relations a Constant Challenge

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Keeping your rep firm in the winners’ circle requires effort every day.

In our discussion of backselling we recognized the need to plan, organize and implement a comprehensive program.

When we look deeper into this subject, we find that there are very specific activities that are key parts to executing a successful backselling program.

Here is a list of 10 key activities:

  1. Selling accomplishments.
  2. Selling plans.
  3. Selling programs.
  4. Selling training.
  5. Selling meetings.
  6. Selling customer development.
  7. Selling your use of manufacturer resources.
  8. Selling your outreach tools and programs.
  9. Selling your working relationships with manufacturer personnel.
  10. Selling your backselling.

Elaborating on each … Read the rest

“All I Want to Do Is Sell”

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If This Is Your Mantra, Customers Will Vanish

It was an early morning meeting chaired by the senior vice president. There wasn’t any reason to anticipate fireworks this particular day so the atmosphere was, to say the least, rather relaxed. A sales manager was the last to arrive, whispering to the person next to him as he sat down, “All I want to do is sell.”

The meaning was clear. He viewed meetings and all other “non-selling” tasks as unnecessary interruptions keeping him away from the job of selling. His meeting intolerance was palpable, announcing at the start that he … Read the rest

Minnesota Representatives Gain Added Protection

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Thanks to a MANA attorney member, MANA, MANA members, and sister associations the Minnesota Termination of Sales Representative Act (Minn. Stat. §325E.37) was successfully amended resulting in greater protection for certain Minnesota manufacturers’ representatives that are covered under this Act.

MANA member Gene Hoff, Minenko & Hoff, P.A., Edina, Minnesota, began the ambitious amending effort last year and realized success earlier this year when the amendment was signed into law by Minnesota Govenor Mark Dayton. The effective date of the amendment is August 1, 2014.

At the beginning of his effort to amend the law, Hoff met with a number … Read the rest

How to Connect With Anyone

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Before you can sell or influence anyone, you have to make a positive connection so they like and trust you. Here are some keys to connecting with anyone.

When in Rome…

If you’ve ever visited a non-English-speaking country, you undoubtedly tried to learn a few words or brought some sort of translation tool with you. Of course you did that so you could communicate and travel most effectively. Perhaps you also did it to show respect. If you didn’t, you were probably viewed as an arrogant American. Also, your trip was probably not as pleasant as it would have been … Read the rest

Deal With an Irate Customer, Don’t Lose Them

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Facing off with a screaming, unreasonable, irrational customer represents the ultimate test of any employee’s service skills. It can take you to your breaking point if you’re not careful. Staying grounded and above the fray requires you to find inner strength, and persevere beyond the initial difficulties.

Dealing with irate customers is one of the most pressure-packed experiences you will ever encounter on any job. During every confrontation it is important to remember:

  • Every customer is a different person with a unique set of circumstances and personality traits.
  • Irate customer encounters can emerge out of nowhere — the key is
… Read the rest

Business Incubators

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Long-time friend of MANA Bob Reiss has graciously allowed Agency Sales magazine to serialize his book Bootstrapping 101: Tips to Build Your Business with Limited Cash and Free Outside Help, available now on Amazon.com. The book looks at surprisingly effective low-cost and no-cost ways to acquire the resources you need to run your company. Whether your company is an existing enterprise or a start up, a manufacturers’ representative company or a manufacturer, this book will introduce you to innovative ways to cut your costs and drive more of your income into bottom line profits.

If you are a start-up … Read the rest

Creating the Perfect Sales Proposal

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Learn six simple steps for dramatically improving the closing ratio of your proposals while increasing your average sale size.

What would it mean to you if you could increase the closing ratio of your proposals by just 20 percent? So many salespeople spend so much time in the initial stages of a sale, only to rely on the same weak proposal template in order to try to close the sale. By implementing these six easy steps, you will dramatically improve the number of sales that you close.

1. Get to the Point!

The second that a prospect feels you are … Read the rest

Knowledge of the Territory

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“One of the major reasons my company decided to partner up with independent manufacturers’ representatives is their knowledge of the territory.” That’s how a manufacturer recently began his conversation with Agency Sales on the subject of using an outsourced sales force.

“But all that territorial knowledge that the rep has doesn’t do us any good unless he shares it with us,” he continued. That’s why this principal was such an advocate for the regular practice of visiting his agents in the territory. However, these visits do no good — in fact, they can be harmful — if they’re not carefully … Read the rest

Digitally Speaking

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I sat there staring at one of the eight screens on my desk: laptops, cell phones, tablets, and more. I had been mandated to create awesome content for the online newsletter that we’ve been pushing out (almost) every week for over a decade.

I did what came naturally and instead of typing, pulled out a legal pad and began to write down all of my random thoughts on the subject — in cursive! You remember cursive, don’t you? It’s that special code that only we baby boomers can now break, as the succeeding generations have abandoned it for digital.

My … Read the rest

Social Media Myths and Musts

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OK, OK, OK. So ya’ know that ya’ need to get involved with social media. All right already! But, WHAT do you do to improve sales and what is simply a waste of time, money and effort? That is the question.

Knowing these three myths and three musts (plus an important bonus!) will help you successfully embrace social media.

Myths of Social Media

  • You have to be on every platform

Baloney! You need to be on the platforms that will work for YOUR system in YOUR operation for YOUR customers. Period. End of story. You need to have tools and … Read the rest

Major Publisher Mounts Defense to Rep Case

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Some manufacturers will initially consider a sales rep’s commission claim with sympathy, others with reasonableness, and perhaps most with nervous skepticism. Then there is The McGraw Hill Companies, Inc. (now known as McGraw Hill Financial, Inc.), a leading publisher of elementary school textbooks.

McGraw’s former educational division emptied the litigation arsenal in response to a claim brought by longtime independent sales rep, Shawn Kelly & Associates, for unpaid commissions (filed by this article’s author). It took the rep’s gritty determination to stand up for himself against a better funded, give-no-quarter defendant, for whom Kelly had netted millions in sales, to … Read the rest

Retirement is a Fantasy for Many

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A third of the middle class say that Social Security will be the primary source of income in retirement. It is expected that there will be a sharp increase in that number in the coming years.

Brian Graff, the CEO and executive director of the American Society of Pension Professionals and Actuaries (ASPPA), says that any move by the congress to reduce the benefits accrued by contributing retirement savings will lead to fewer people saving. In effect, many retirees will be dependent on government for help, increasing federal spending.

A report by the Coalition to Protect Retirement puts the contributions … Read the rest

MANA President Tours Scot Forge Facility

MANA’s CEO and President Charles Cohon extends special thanks to Justin McCarthy of Scot Forge for the opportunity to tour Scot Forge’s Spring Grove, Illinois facility on Thursday June 5, 2014.

McCarthy is a long-term MANA member and a long-term supporter of MANA and of the manufacturers’ representative system of selling.

The facility operates on an enormous scale and is state-of-the-art in terms of its manufacturing techniques and dedication to safety. Scot Forge is a 100% ESOP company where each employee, after meeting certain criteria, actually becomes an employee-owner.

MANA members like McCarthy and Scott Forge are the reason for … Read the rest