In the midst of conversation between two manufacturers on the subject of how best to control the activities of their respective independent manufacturers’ representative sales force, a third manufacturer with more than 35 years’ experience working primarily with agents, weighed in with his thoughts on the subject.

According to the third manufacturer, “When it comes to the subject of control, manufacturers should recognize that control is not an objective in itself. Rather it is merely a management style. The key to top sales channel performance is to partner with rather than to dictate to the channel. This is true whether one sells direct or through independent reps. However, while a manufacturer may still be reasonably successful with a direct sales force when using an autocratic style, high-performance reps are totally turned off by it. After all, haven’t they chosen an independent path in part to avoid such corporate autocracy?”

Creating Agent Loyalty

In the midst of a consultant’s presentation at an industry conference late last year, a manufacturer asked the speaker to speak a bit about the subject of agent loyalty or the lack of same on the part of independent representatives. Evidently, the manufacturer was looking for some guidance and/or consolation since he admitted that three of his recent agencies had terminated their relationships. According to the consultant, “Rep success is measured by their ability to increase market share and profitability of the principals they represent over the long term. It is a decided disadvantage for a rep to terminate a manufacturer or even to jeopardize the relationship if a manufacturer is well-managed and committed to the effective use of reps.

“On the other hand, poorly-managed manufacturers should be terminated by reps just as poor-performing reps should be terminated by well-managed principals. Once again, true success comes about by developing win-win relationships between productive reps and well-managed principals. That is one of the basic truisms of selling through reps.”

An Approach That Works

An agent recently described one of the more effective approaches he had ever encountered when a manufacturer called him to inquire if he’d rep his line. According to the agent, “We’re constantly getting inquiries from manufacturers, but one of the major problems is that most of them don’t even know what other lines we carry. All they know is that we’re a good agency and they want us to sell their line.

“It’s our practice to respond to all the inquiries we receive, but only when they’ve shown us that they know something about our agency, the markets we sell to and the other lines that we carry. For instance, just last week, I received an inquiry from a manufacturer who wants us to consider his line. He went into considerable detail about how his line fits very closely with two other lines that we currently represent. He even explained how his line, if we took it, would help us sell more of the other lines that we already have. Now, there’s a company that does its homework and they got my attention. We are in the process of setting up a meeting right now. If everything else looks good, I’d like to represent them.”

Support Is the Name of the Game

A consultant who spends considerable time with both manufacturers and independent manufacturers’ representatives related a complaint he’s heard more than a few times from agents: “After a big ceremony and a lot of hand shaking, a manufacturer welcomed us as their outsourced sales team. That was the highlight of our relationship. We didn’t hear from him again for seven months….”

According to the consultant, this is hardly an unheard of complaint. “The fact is that agencies need and want support — even more support than offered to a salaried employee. But the question is: ‘What kind of support?’ To those unfamiliar with working with agents, support might mean only adding an additional phone line and an additional person to take the orders. In the real world, that’s hardly the case.

“What is really needed is a support team — not just the person who takes phone calls. And that team should be made up of people from just about every department in the company — not just the sales department. The team should include people from accounting, manufacturing, shipping, advertising, public relations and operations. If it done correctly, the manufacturer will have representation from just about every department assigned to some agency responsibilities.

“And once established, the team will meet regularly to keep themselves up to date on what’s happening with the agency network.”

Manufacturers: Stay in Touch

Sure, communication is a two-way street, but all too often the onus has been placed on the agency to report often and regularly to their principals. When he considered this situation, one manufacturer noted that he’s made a practice of contacting his agents with regularity, often for no other purpose than to let them know that he’s interested in them. “When two parties don’t speak, even if there is no dispute, they’ll tend to drift apart,” he says. “Manufacturers and agents who recognize this problem usually do everything they can to say in touch. Generally, the pressure has mostly been on the agents to stay in touch with their principals. However, I’d maintain that it’s just as important to principals to stay in touch with their agents. Remember the words, ‘Out of sight, out of mind.’ That applies here. Stay in touch with agents. Answer their calls as quickly as possible. Use e-mail, the phone, whatever it takes to make it work. But, the bottom line is to stay in touch. Communication is truly a two-way street — there’s hardly room for one-way traffic here.”

Rep Council Advice

Elsewhere in this issue of Agency Sales appear two articles covering the subject of rep councils. Concurrent with the preparation of those articles a manufacturer inquired about how prevalent such councils were. When told they were hardly uncommon he voiced serious interest in creating one for his company and agents. But before he took the steps to create one for his own company, he was urged to appoint an individual from within his company’s ranks who would serve as a sort of “rep champion,” that is, an ombudsman or intermediary between his company’s rep network and the company personnel. Among the many duties this individual would have would be to be sure that the rep council was run properly. To his credit, this manufacturer was genuinely interested in creating a rep council — and he promised to get back to us so we could report to our readership on his efforts.

Why Outsource Sales?

A veritable primer on the benefits of using independent representatives was offered by one manufacturer recently. According to the manufacturer, “We’ve found that reps provide us with that constant presence in front of the customer that we’d never be able to have via a direct sales force. Owing in no small part to the fact the rep is armed with a complete line card of complementary products, he’s in there across the desk from the customer on a much more scheduled basis than we could achieve on our own.”

There’s more to the rep’s benefits, however, he continued, “Not only have our reps decided to partner with us and their other principals, they also partner with their customers. And, they communicate their desire to partner with them until all their goals are met.

“Then there’s the value-add the rep offers. They’re the experts at appraising the customer’s business needs and serving as their problem-solvers. Finally, they are service providers. No matter when and where the customer has a need, the rep shows us that he’s there to meet that need.

“All in all, the working with reps has been a winning proposition for us.”

The Value of a Report Card

An issue of Time magazine late last year that was highly critical of teachers touched on the subject of teacher evaluations. That very subject brought to mind the comments from a manufacturer who was a major proponent of conducting evaluations of his independent representative network.

According to the manufacturer, “I’m a firm believer that such evaluations are good for both sides of the partnership. But, I’ve got a caveat that I keep in mind in conducting the evaluations. We don’t look just at sales figures. We do more than that. As we considered our reps’ performance, we were gratified and interested in learning about all the other things — the ‘value-add’ things — that our reps do that we never usually think about. As an example, we have several reps who conduct mini-trade shows that we were never aware of. Others conducted in-plant seminars, and many more were active in various community activities that raised their agency profile in the territory.

“The value in looking at this larger picture is that fact that there’s a great deal that goes into the rep’s effort to gain sales, and all of those additional efforts should be included in any type of annual review that we conduct.

“As we explained to our reps what we were doing, they were more than pleased because it provided them with the recognition that they deserve.”