Issue: August 2015

I Am Not Sven!

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© AntonioDiaz | Dollar Photo Club

One manufacturers’ representative* reports heartburn over a Wall Street Journal article that describes smartphone app Universal Avenue as, “Like Uber, but for a sales force.” Here is his story. You be the judge.

“When I want a ride to the airport on Tuesday, Uber’s smartphone app pings the driver closest to me, and Fred picks me up. When I need a ride to the airport on the following Saturday, Uber again pings the driver closest to me, and Sally picks me up,” he explained.

“There are thousands of Uber drivers in my city. Will I ever see Fred or Sally again? Unlikely. Does driving me to the airport make Fred or Sally my ‘trusted transportation consultant’? Absolutely not!”

The article that triggered this representative’s indigestion, “Coming Next: The On-Demand Sales Force,” says of this smartphone app, “Companies can use it to get salespeople on demand, and these salespeople choose when to work and which assignments to accept.”

The article illustrates with this example: Sales freelancer Sven in Stockholm can decide to spend a few hours selling to pick up some extra cash. The smartphone app “considers Sven’s strengths and weaknesses, matches him with goods from any of a dozen brands, and plots a route through Stockholm optimized to include as many potential customers as possible in the time allotted.”

Just like Uber drivers Fred and Sally, Sven can choose to spend a few hours working where a smartphone app sends him. Sven’s likely customers are small businesses: “hotels, hostels, restaurants, clubs, bars, cafes, stores, beauty shops, tour operators, museums and similar businesses” where the owner is likely on site and easy to pitch on services like booking systems, delivery services, or credit card processing, says Techcrunch.com. It’s pitch, close, and move on to the next Universal Avenue-assigned target, a process the manufacturers’ representative describes as “Hit and Run.”

“I guess the source of my heartburn is that I have been lazy in using the phrases ‘outsourced sales force’ and ‘manufacturers’ representative’ interchangeably,” admits the representative. “Now when I have to explain the role of manufacturers’ representatives, ‘outsourced and cost-effective’ isn’t enough.

“I also have to explain the difference between an outsourced sales freelancer like Sven and an outsourced professional manufacturers’ representative like me.

“Sven may spend a few hours pitching credit card services to a half dozen bars and booking systems to a couple of restaurants before quitting for the day. As a professional manufacturers’ representative I am more interested building long-term relationships with customers who will treat me as a trusted advisor for decades than I am in writing any single order.

“I guess that until now I had become complacent about making that point clear when I described my business model. But I will make that point crystal clear in the future.

“I am a professional manufacturers’ agent, not a freelancer. I am not Sven.”

* MANA editorials are written to illustrate a particular point of view, not to recount any particular conversation with a specific manufacturers’ representative.

Learning From the Best Practices of Others

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As a MANA member, you can learn from other members’ best practices, a membership benefit. Let’s face it: we live in a changing world and the change accelerates every day. New issues come up and to survive and grow, you need to learn to effectively deal with them. What worked in the past no longer does. Why not tap into the other members’ collective wisdom and knowledge for solutions?

The Agency Sales magazine articles you read provide information on how members deal with some issues. Members also post discussion questions on the MANA LinkedIn group and other members respond with … Read the rest

Learning From the Good and the Bad Organizations

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One of the many things Rick Campo, CPMR, learned when he opened his agency’s doors more than 23 years ago was the difference between a good and a bad rep.

Campo, president of West-Tech Materials, Costa Mesa, California, explains that one of the first steps he took before opening his agency was to identify and interview top-performing independent manufacturers’ representatives. That wasn’t enough for him. From there he moved on to interview a number of less-than-top-performing agents. The information he garnered from those interviews pointed him to his ultimate business path.

According to Campo, “Here’s how I began the process. … Read the rest

Single-Person Manufacturers’ Representative Have You Thought About Selling Your Business?

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Most multiple-person manufacturers’ representatives sell their businesses when they retire. While they owned the business, they created value in the business, value they exchange for dollars they add to their retirement accounts. The manufacturers’ representatives’ principals retain sales continuity in the territory; the new owner fulfills the dream of operating their own business. Works out well for all of them, doesn’t it?

For single-person manufacturers’ representatives, we see a different story. Rarely, if ever, do they sell their businesses when they retire. We hear two stories when we talk with them. They decide they no longer want to work and … Read the rest

You’re Only As Good As Your People

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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.

This month continues the discussion of … Read the rest

Create Your Own Economy

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No matter what business you’re in, there will always be one or two salespeople or businesses that are completely knocking it out of the park and selling tons more and doing lots more business than everyone else. Even when market or economic conditions are bad, these companies and individuals are still killing it. They are able to do this because they create their own economy. They are not dependent upon outside forces nor are they victims of outside negative conditions that leave most businesses reeling or even out of business. The good news here is twofold: first, anyone can create … Read the rest

A Manufacturer’s Slight Spin on the Agency Business Model

Founded in 1892, Phoenix Products Company, Inc., designs and manufactures lighting fixtures for some of the world’s harshest environments. One of its key markets is the port and terminal industry — a critical link in the world’s logistical chain. How a terminal utilizes the ever-changing technology available in this competitive industry can have a direct effect on the operator’s bottom line. For this reason, having integrated systems and concise information about them is crucial.

Filling a Void

For years, Phoenix has been observing the many unique characteristics of this industry — from the long buying cycles to the amount of … Read the rest

Reasons Why Salespeople Don’t Make More Sales

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There are a few star performers in sales. The other 99 percent fall on a continuum from very good to poor. While this isn’t news to anyone, the common approach is to hold up the one percent as models for everyone else. “Strive to be a star,” they’re told. While that may motivate a few, it doesn’t help the vast majority of salespeople who want to sell more but don’t know how to go beyond where they are.

This picture isn’t complicated. For the most part, salespeople can do things that bother customers, so they lose sales unnecessarily. Here are … Read the rest

Move Lost Customers Into the Profit Zone

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Everyone says the customer is important; only a few savvy companies invest the time, effort and financial resources to do what needs to be done to build a more loyal customer base. Executing a loyalty strategy takes a true understanding of what it takes to create the kinds of experiences the customer will come back for, and tell their friends about.

Companies usually lose from 15 percent to 20 percent of their customers annually. They leave for many reasons. Some move, some die, some go out of business and some are seduced by the competition. The majority of customers leave … Read the rest

A Primer for Selecting an Agency

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An independent manufacturers’ representative related a conversation he had with a manufacturer who was a personal friend. The manufacturer worked in an industry different from the agent, so he felt free to discuss some of the problems he had in the past in finding and working with an outsourced sales force.

According to the agent, “My friend was relating a history of bad experiences he had with reps. It reached the level where he had been turned off by the entire experience. After asking a number of questions, I felt free to offer him my perspective, which I hope encouraged … Read the rest

How to Keep Going When the Going Gets Tough

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Life can be tough at times. Any successful business person knows that. It can sometimes get really draining and sometimes we don’t know how to move forward.

If you’ve ever had some of those times that are very tough and you wonder how to keep going, I want to share some thoughts with you that have helped me and others.

You might have heard the old saying, “When the going gets tough, the tough get going.” This has been attributed to both Joseph Kennedy, father of President John F. Kennedy, and to Notre Dame football coach Knute Rockne. Whoever said … Read the rest

Beware of Termination for Cause Language in Your Sales Representation Agreement

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My friends on MANA’s staff tell me that most MANA representative members report that the vast majority of their principals treat them honorably and respectfully. Most of the time commissions are paid on a timely basis and according to the terms of the written representative agreement. However, there are enough exceptions to that rule that the primary focus of my law practice is the representation of sales representatives in commission disputes.

A significant part of my practice includes drafting and negotiating sales representative agreements for our clients. One of the major pitfalls in sales representative agreements is language inserted by … Read the rest

Pie-Eyed Over Pie Charts

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If you’ve ever worked with a stockbroker or financial planner, you’ve most likely been subject to a barrage of fancy-looking pie charts. Asset allocation models have been displayed in this graphic format since the pie was first invented, it seems.

Pie charts are standard tools that one views when meeting with a stockbroker or financial planner. I like to call these folks “pie-charters” because their recommendations are usually all the same. It doesn’t matter which firm you’re working with, when you’re meeting with your financial planner or stockbroker they always recommend a blend of growth vs. safety investments and fixed … Read the rest