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When one manufacturer asked some of his non-competitive peers what they did to keep their independent manufacturers’ representatives informed and motivated one of them was quick to offer several suggestions she found to be especially worthwhile. Among the tips she offered were these:

• Be even-handed with all agents — Be sure to not favor one over the other because of longer service, past performance or personality factors.
• Training — Time and again agents have communicated their desire to have access to product knowledge and applications as aids in performing their jobs. Remember they already know how to sell; what they want now is information on what they’re selling.
• Quotes and deliveries — On time, all the time. Enough said.
• Fair Pricing — If one manufacturer’s prices are higher than the competition, you had better be able to justify those prices in terms of quality, service, delivery, etc. Don’t expect agents to overcome a major price disadvantage with their sales expertise.
• Back up and support — Have programs at the ready which create a recognition factor that help get agents in the door and produce leads that help them sell your products.
• Recognition — Don’t shy away from singling out the successful sales strategies of individuals — at product meetings or other company events.
• Contact and communication — Keep agents in touch with each other via everything from newsletters, teleconferencing, product information meetings, rep councils and other periodic get togethers. Remember, reps can learn from each other’s best practices. Why not provide them with the opportunities to exchange ideas?

Advantages of the Agency Model

When the head of the business marketing department of a major U.S. university contacted Agency Sales recently, he was searching for information he could use that exhibited how and why using independent manufacturers’ representatives was the best way for manufacturers to go to market. We responded that MANA had a wealth of data available that we could forward; however, what immediately came to mind were 10 advantages that MANA began communicating more than 20 years ago. Very quickly, here are those 10:

1. Provides predictable sales cost — For good times and bad, the manufacturer and agent agree ahead of time on a set commission.
2. Lower sales costs — Consider the salary of a direct sales staff, then add in everything from payroll taxes, workers compensation, insurance, etc., and balance that vs. the commissions paid to independent manufacturers’ representatives.
3. Reduces administrative overhead — Internal costs of administrating the sales payroll and furnishing various backup services for direct salespeople are reduced.
4. Eliminates the costs of training and turnover in sales personnel — Training period for agents will be minimal and largely related to learning about your products.
5. Gives immediate access to the market — With agents, the manufacturer has an experienced sales team in the territory immediately. No sales training needed.
6. Provides a highly experienced, more aggressive sales force — Agents must sell to live. As a result they must make sales time count — for both the principal and the agency.
7. Provides sales forecasting equal to or superior to that of a direct sales force — Sales forecasting may be more accurate because so many agents use sales analysis and forecasting methods which are often more sophisticated than those of the manufacturers they represent.
8. Provides a broader sales context for your products — The agent calls on a wider variety of prospects and customers and in so doing, often finds applications for products denied the single-line salesperson.
9. Adds marketing flexibility at less cost — Agents can increase volume by selling outside your present marketing territory. And, they can sell a new line without conflicting with your present sales organization.
10. Increase sales — It has been estimated that the individual agent sells approximately 70 percent more than the average company salesman.

The Search for Customer Feedback

If manufacturers and their independent representative network don’t share information then they’re never going to be able to make the most of customer feedback.

To that point, a manufacturer’s marketing manager recently communicated that she calls her agents regularly in order to learn about “things in general.” She explained that “It’s one thing to call an agent and ask about the status of this and that job, but it’s quite another to truly get a sense of what’s really happening on the customer level. Agents are busy people. And we’re well aware that they represent principals other than us. However, I know that I can always gain the sense of customer well-being that I need only through this sort of casual conversation.

“If I ask specific questions about customer satisfaction, I get the type of answer I’d expect from hotshot salespeople — “Everything is terrific.” Now we both know that things aren’t always terrific, so I try to probe a bit without asking specific questions. The information is there, with the agent, you just have to lead them to want to communicate with you — and they will. I guess there are other techniques that use questionnaires and all that stuff, but I think my amateur approach works a whole lot better.”

Qualifying Sales Leads

In reaction to comments he heard from a couple of agents regarding the need for qualified sales leads that might develop from a trade show, a manufacturer described his philosophy on the subject.

According to the manufacturer, “Our general approach is to assist the local representative at all times by preparing the correct literature package for each trade show lead and send the package, with the lead, directly to the agent. The rep can then decide whether to call on the lead personally to deliver the information or mail it for a later follow-up.

“Many times I get the feeling that reps don’t treat these leads with the importance that they deserve, given the time we spend preparing the documentation packages; but I do it anyway so as not to hurt those reps who really try to make the best of what we provide in terms of leads.”

He continued, “The best service you can perform for both the manufacturer and the agent is to properly qualify the prospect at the show, before you take his or her card imprint. We prefer to leave a show with a more limited list of qualified leads than with hundreds of business cards with no defined course of action.”

To Share or Not to Share

As they usually do, conversations on MANA’s LinkedIn discussion page serve as fertile ground for the exchange of ideas and opinions among independent manufacturers’ representatives and their manufacturing partners. A recent conversation quickly moved from one covering house accounts to whether agents and manufacturers should be willing to share account information with each other.

Weighing in first on the issue was an agent who noted, “The house accounts issue is more detailed than we can cover here, but I will hit some high points. First, all of the customers in my market that could benefit from a relationship with our manufacturers are on the radar and will be presented to on behalf of the manufacturer. This is what is best for my agency and the manufacturer. In other words all of my customers have the potential to be ‘our customers.’ If a manufacturer has made a decision to keep house accounts they are saying that not all accounts in your market are available to you; they are not your potential customers.

“The second issue and the biggest issue for my agency and market is that house accounts directly affect the market in a way that will dramatically diminish our return on invested time/materials. House accounts can also make it very difficult for us to engage new customers and to keep them once they are established through no fault of our own. The better job we do promoting products, the more sales that are driven to the lowest retail provider which is typically the house accounts (at least in our experience).

“Many manufacturers have positioned themselves with house accounts that they could not turn over to a rep if they wanted to. We on the other hand set market pricing for our customers taking into account our services and commission to ensure profitability for the manufacturer. This same lower margin allows house accounts to dictate a lower-market pricing than the product should allow, which is never a good thing for manufacturer, rep or distributor.

“There is a difference in withholding account-specific information on prospects the manufacturer is not currently doing business with and not promoting the product line to said distributors. Don’t confuse the two as any savvy rep would not turn over a complete contact list to anyone, but would provide quality representation. Would you turn over a complete customer list to a rep even for accounts outside their territory?”

In response, the manufacturer noted, “I would not turn over account information for accounts outside the territory; that said, if the rep is not willing to share their contact information for accounts they are currently working with (and my organization potentially isn’t), why should a manufacturer turn over contact information for accounts I am currently working with, and the rep potentially isn’t? Doesn’t this at all seem one-sided to you?”

MANA welcomes your comments on this article. Write to us at [email protected].