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Two manufacturers were bemoaning the reluctance of their agents to embrace the benefits of cold calling when a third weighed in. According to the newcomer to the conversation, “I’m a production equipment manufacturer so I’m well aware of the reluctance — if not the lack of success — my agents have had in making cold calls. At the same time, however, I don’t completely ignore the benefits of cold calling.

“I’ve made it a habit of regularly citing what can happen when they call on someone with the prospect company who doesn’t make the final decision on purchases. Rather, I advise them to make contact with those who can advise them on the information they need in order to get appointments with the decision makers.

“So, the bottom line for me and my outsourced sales force is that they shouldn’t just make random cold calls; but search to contact those who have the information they need to make the sale in the end.”

Valuing Customer Input

In the course of a recent telephone conversation with a manufacturer who was in the throes of weighing a direct vs. independent sales force, the manufacturer related the value of information he received from one of his customers that ultimately helped him make a decision. The manufacturer noted, “We’ve historically been married to a direct sales force. When the change to agents was proposed I contacted one of my best and longest-standing customers for their input. According to that customer, the sales and service on other products he has received in the past from reps was superior to that of direct salespeople. For instance, he cited the tendency of direct salespeople to more often than not offer the corporate solution to a problem vs. a solution that might better suit his needs. When he put in a request for a product to be skid mounted, he was told that wasn’t something the manufacturer did. But rather than let the situation stand that way, the rep went ahead to subcontract the skid mounting and provided the customer with what he needed and wanted.”

The manufacturer wasn’t done yet: “The customer also touted the ability of his reps for other products to maintain a level of sensitivity to their needs. By way of example, he cited the ability of one of his reps to rise to the occasion when one of their principals had a product shortfall. The rep would step in and find a local source to complete whatever the manufacturer was lacking.”

“The final bit of advice the customer offered was that he found reps were more than willing to develop flexibility in the face of a corporate offering which might just leave the customer dissatisfied.”

Learning From the Past

During the course of a roundtable discussion among manufacturers at an industry conference earlier this year a manufacturer offered his peers some advice that he maintained has served him well over the years. “If I’ve learned anything about working with reps it’s to pay attention to who they’ve represented in the past and how they’ve performed with those principals. The ability of an agency to attract and retain top performing principals is key in any decision I make regarding who I want to work with. The characteristic I refer to, and I guess I can call it tenure, can really only be evidenced by agencies that have been in business for a number of years. But what lengthy tenure tells me is that the rep firm owner who can boast of years of service with one or more of its principals has already shown the ability to attract and hold on to its own highly qualified sales personnel. That’s why principals have stayed with them.”

Taking a Fresh Look at the Relationship

During the interview process when an independent sales representative asked a prospective principal what the manufacturer viewed as his most important responsibilities in the relationship, the manufacturer admitted it got him thinking about his relationships with his other agents. “Thankfully, the more I thought about it, the better I felt about the working relationships I already had with my rep network. While there are any number of responsibilities the manufacturer has to fulfill in working with reps, I boiled down my major concerns down to:

• Integrity — “What this means to us and our reps is that we must routinely make commitments to perform, but then we must live up to those commitments. If our word is no good, the relationship is no good.”
• Quality products — “Nothing will sour the relationship between principals and their reps more than products that fail in the field. And, not only souring the relationship between principals and reps, perhaps more important, it absolutely destroys our relationship with customers.”
• Responsiveness — “When a customer and our reps have questions or problems, we drop what we’re doing elsewhere and make sure they receive a solution to their problem or an answer to their question. Any other approach is unacceptable.”
• Fair and accurate commission — “We not only pay fairly and accurately (all determined during our negotiations with the agency) but we also pay on time all the time.”
• Reliance on a written contract — “I adhere to the adage that a verbal contract isn’t worth the paper it’s written on. I’m a firm believer in relying on a written agreement that memorializes what each side of the agreement has agreed upon.”

Territory Visits Are More Than a Vacation

“When we execute a field visit with our reps, we make sure that there’s more to it than just getting out of the office and escaping the bad weather back home.” That’s how one manufacturer described his philosophy when it comes to working with his network of independent manufacturers’ representatives in the field.

“After more than 30 years of working primarily with reps, I’ve grown to know that a principal’s visit to the territory should be one of the most important events in the selling process. I say that all the while knowing that many of my fellow manufacturers maintain that such visits are a waste of time. They complain that their reps aren’t adequately prepared for such joint calls and have simply stacked the deck by arranging sales calls with their best customers — most of whom don’t really need special attention.

“Getting out of my comfort zone by escaping my office has shown me that the visit in the field can provide the ideal opportunity for meaningful conversations with my agents. I’d warn, however, that the meaningful conversations can only take place when the visit has been planned well in advance and that planning includes a comprehensive agenda, complete with a plan for objectives to be met and a follow-up.”

Determining an Agency’s Value

When conversation turned to eliminating a manufacturer’s independent sales force a manufacturer’s national sales manager was tasked with determining whether that would be a positive or a negative. “Some of the thinking that went on in-house was that since we already had sales managers in place, why couldn’t we eliminate our reps and have the sales managers handle that business,” she explained.

Taking the task to heart, she continued: “It didn’t take me long to determine — and then explain to the rest of management — that if we eliminated our reps, in the southeast, for example, we’d immediately be facing a major problem. In that territory alone, we had in the neighborhood of $6 million in annual sales. At that time, the territory was covered by four agencies. If we terminated those agencies, we’d then be faced with the task of having one person — a sales manager — tasked with knocking on all the doors in those states in order to get, maintain and search for new business. Hardly an easy task.”

And that’s not all, she continued. “What about the selling opportunities that would be lost, not to mention those opportunities we’d never even know about? After
several years of working primarily with reps, I was certainly aware of the fact that it’s the rep who has the relationships in the territory. And, because the rep has those relationships, he’s constantly on the lookout for opportunities to develop future sales. Without reps, we easily would have been missing who knows how much more in future sales. If we had sales managers in place, I’d guarantee they’d spend the majority of their time just maintaining and not growing our business.

“I can thankfully say we made the decision to stay with our rep force and it looks like it’s going to be that way long into the future.”