Issue: October 2014

Side Effects:
The Power of Rep Councils

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We’ve all seen pharmaceutical ads where the side effects are worse than the disease that the new miracle pill can cure. “We’ll cure your athlete’s foot,” says the pill manufacturer, “but you may experience double vision and extreme gastrointestinal distress.”

But sometimes side effects are beneficial. The same aspirin tablet that cures your headache may also have a role in heart health.

Manufacturers who sell through manufacturers’ representatives enjoy a beneficial side effect just like the aspirin user: a reservoir of highly skilled sales professionals who are intimately familiar with your products, your business practices and the markets you serve.

How do you take advantage of that expertise? With a Representative Council.

When you form a Representative Council you bring together four to six of your representatives, usually at your facility, to discuss the things you do well and the things you do “not well.”

What do you get? Insights that a top 10 consulting firm would be hard-pressed to replicate for tens of thousands of dollars, because a top 10 consulting firm would have to spend weeks “on the clock” learning your business and your customers, information your representatives collect every day as part of their routine sales calls.

What does it cost? In most cases just a half dozen plane tickets and the hotel and meal expenses of your representatives while they are at your facility helping you.

Interested in learning more? MANA members enjoy free access to MANA’s “Nine Steps to Being a Quality Principal” program. Step Five includes everything you’ll need to start a Rep Council, including these items:

  • Open Doors by Building an Effective Rep Council ∙ Special Report
  • How to Establish and Benefit From Rep Councils ∙ Teleforum
  • Agent Council Operating Charter ∙ Guideline

Or call MANA with your questions — we’re here to help!

The Particular Challenges of the Small Agency

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What are small rep firms? One-person, five-person, 25-person…. The government classifies a small business as one that employs 50 or less. Regardless of the size of your rep firm, we all share the same challenges day to day. Hiring and firing of employees and the HR activities associated with it, payroll, taxes, insurance, auto expenses, retirement, etc., these are all issues that are dealt with whether you employ one person or 500.

I feel that the largest challenge to the small rep firm is that of revenue. Without sufficient revenue to cover the overhead of any number of people, the … Read the rest

Challenges Never End for the Small Agency

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Begin a discussion on the benefits of the small independent manufacturers’ representative agency vs. that of the multi-person agency (or vice versa) and chances are the conversation will go on forever.

On the one hand, the one-to-three person agency (that makes up the majority of MANA’s membership) can boast of its ability to turn on a dime and make changes much more quickly than its larger counterpart; on the other hand, the large agency, that often covers several states and multiple territories, can boast of its sophistication and hundreds of feet on the street that can achieve immediate impact for … Read the rest

Constant Evaluation Key to Success

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Stop-Look-Listen — The Guts of the Rep Business

After 40 years of working with independent manufacturers’ representatives it is clear that they are not successful just because they are good salespeople. As a matter of fact, sales success can be an impediment to success as an agency owner.

That sounds contrarian. Agents are salespeople, therefore a firm needs to be owned and run by a great salesperson.

No! Many times really great salespeople fail at owning and running an agency.

Sometimes being successful when your firm is small is not an assurance of success as you get larger.

The bottom … Read the rest

Reasons to Avoid the Friend Zone With Customers

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Conventional workplace wisdom espouses the virtue of employees being friendly with customers. While friendliness is a good thing, too often employees interpret it as encouragement to become their customer’s friend. That’s not such a good thing. The key question is what is the most appropriate and profitable employee-customer relationship? Having conducted customer service training seminars for hundreds of organizations over the years, I’ve come to the conclusion that there are five things every employee should consider as they develop relationships with internal and external customers.

Not All Interactions Are Fun

Chances are, customers would rather not go through the process … Read the rest

Red Flags That Make Reps Run the Other Way When a Prospective Principal Calls

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I have often heard it said by manufacturing management that the process of finding, evaluating and engaging with an independent manufacturers’ representative is a frustrating process. For sure it can be a time-consuming procedure for both the representative and manufacturer seeking representation.

It is somewhat of a “ritual” or “dance” the two parties go through in order to evaluate the other’s compatibility. Both parties have information to share with the other but must first determine the level of sincerity of the other before sharing too many details. The process is much the same for high residual lines, as well as … Read the rest

Responding to Manufacturers Is the Professional Way to Conduct Business

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It was in the May issue of Agency Sales magazine that MANA’s President and CEO Charley Cohon wrote the following: “When a manufacturer whose products would not fit your line card contacts you, take a few minutes to send a friendly reply to their e-mail or voice mail. Thank them for using the representative system of selling and encourage them to continue their search for a representative who would be a great fit for their products.”

That advice and Cohon’s entire editorial devoted to the subject of independent manufacturers’ representatives getting back to prospective principals were major reasons why this … Read the rest

How to Get the “Wow” Response From Customers

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The e-mail came in at 9:07 p.m. and I responded immediately. The customer response: “Wow! That was quick. Thanks. Trying to get my staff to deliver those ‘wow’ moments myself.”

The truth is, these days it’s easier than ever to create the “wow” response with customers mostly because customer service, follow-up, and all related business protocol leave so much to be desired. Not only are most companies not delivering “wow” service, most are failing to meet even average expectations. Even though it’s easier than ever to get noticed, there are some definite steps to making sure you step up, stand … Read the rest

Pricing for Profit

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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.

One of the most important … Read the rest

Marketing and Sales Ideas That Get Us Into Trouble

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Marketing and sales initiatives are a company’s lifeblood. Yet, the top leadership in many companies harbors serious doubts about the effectiveness of such initiatives. The confidence level among some executives is so low that they’re not sure it would make much difference if they stopped most of it.

Even so, marketing and sales efforts can build brands. “I was fascinated by the idea of developing brand value through your ability to create an image and sell that image to the public,” said the late Frank M. Woods, founder of the famed Clos du Bois winery in California’s Sonoma County.

The … Read the rest

Could Divorce Have Been Avoided?

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Two independent manufacturers’ representatives contacted Agency Sales magazine recently, both of whom told similar stories — stories that we, agents and manufacturers, have heard previously. We refer to their experiences here because while there’s obviously a “teachable” opportunity for both of the agents, there’s also an opportunity for manufacturers to hear firsthand what former agents think about an abrupt ending to what was a lengthy relationship.

The first agent recounted how over the last several years, he and his agency have found themselves on the losing side following a variety of mergers/acquisitions and sales management decisions that in his opinion … Read the rest

Digital Tools for Successful Salespeople

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I was recently speaking to a client about an upcoming presentation I am scheduled to do for his company. He’s a successful salesman and was recently promoted to chairman at a large company. We were talking about what is essential for successful salespeople today.

My client expressed frustration that some of his more seasoned salespeople don’t embrace technology as a sales tool, relying exclusively on their social skills to connect with customers. He wants a sales force with both tech savvy and a knack for conversation.

I agree! In my experience, salespeople who leverage technology succeed more.

To help you … Read the rest

Term and Termination

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As business and business litigation attorneys our office has reviewed numerous written sales representative agreements. One of the most common questions asked by our clients is, “How can we protect ourselves in our written agreement?”

Some clients are only concerned about the post-termination provision. This provision dictates how long a representative will get paid commission after the termination of the agreement. In the OEM industry, the widely held post-termination commission provision is for the representative to be paid life of part/life of program commissions. While post-termination commissions is without question one of the most important provisions in a written agreement, … Read the rest

S Corporations — the Good, the Bad and the IRS

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According to the IRS, close to 60 percent of all corporations are S Corporations and that the total is more than 3,000,000 of such corporations. The overriding reason for electing to be an S Corporation is taxes. These corporations (except in rare instances) are not subject to corporate income taxes, but rather have the tax treatment of a partnership, in that only the “owners” are taxed — and not the entity itself. Thus they avoid the “double taxation” problem of a regular C Corporation in which both the corporation and (later) the shareholders can be taxed on the same … Read the rest