Have a plan! Always be prepared!

Those two sentences might very well serve as a mantra for independent manufacturers’ representatives. At least that’s what Bob Black believes.

What happens to the typical agency when an evolving technology changes the way the market responds? What happens when an agency loses its largest line? How does it respond? How does it recover?

Black and partner Rick Tabone, who head MANA-member The Identity Group, Colleyville, Texas, have asked and answered those questions as it has now moved from the independent representative side of the desk to the manufacturer’s side (Hadrus Vinyl Graphics Manufacturing, Rio Rancho, New Mexico — www.hadrus.com). But, they have made the move keeping in mind all that they’ve learned over the years about what an agency needs and wants in order to survive and thrive.

Take a look back a few years to Agency Sales (July 2012 and June 2014) to consider how Black and Tabone have implemented their philosophy to have a plan and be prepared. As reported in the publication, to place its line of promotional products in front of customers the Identity Group implemented a three-legged approach to impact its territory:

Multiple representation — With offices strategically located in Dallas, Houston and St. Louis, Black described how the Identity Group was uniquely situated to regularly call on customers throughout the years.

Communication — Employing a combination of everything from its award-winning website, personal e-mail, e-blasts, voice mail and video communication, the agency regularly alerted customers concerning new products and promotions. But that wasn’t all it did.

Using Social Media

A concentrated effort to use social media such as Facebook and LinkedIn allowed the agency to effectively communicate with an entirely different age bracket of customers — an age bracket that may not be as interested in building the personal face-to-face relationships as their predecessors. As Black maintained, “I know this approach doesn’t allow us to touch everyone, but it does allow us to reach customers that we wouldn’t necessarily reach through traditional methods.”

Then, almost as a throwback to a bygone era, Black described how the agency made effective use of the most basic form of communication — handwritten notes. “Friday afternoons, we’ve made it a practice to sit down and hand write to as many of our customers as we can. We let them know how much we appreciate working with them and ask if there’s anything else we can do. Before sealing the envelope, we throw in a current line card so they’re up to date on our offerings.”

Mobile showrooms — The agency put two mobile showrooms on the road to literally bring product trade shows directly to customers. At that time, Tabone explained, “We reworked the interiors of our coaches to display as much merchandise as possible and make the best use of the space. Like other reps, we call our customers in the territory and set up three to four appointments daily. We then make end-user visits or call on our customers’ corporate headquarters and have the decision makers attend a mini trade show. This allows us to host customers in our office — not theirs.

“This approach and capability to show and carry additional samples really allows us to provide our customers with everything they need to start selling. Plus, it allows us to be top-of-mind by being different.”

In 2014, when the Identity Group once again showed it had a plan by joining three other independent manufacturers’ representative agencies to form the MLR Alliance, LLC, Black described how technology would be used to enhance service to customers and principals. Among the high-tech tools described by Black in Agency Sales were these:

• The alliance’s website.
• MLRA Mobile — a phone app available to all promotional product distributors.
• ZOOMcatalog — the alliance’s suppliers’ catalogs — all online.
• ACT CRM software.
• An MLR Alliance magazine.
• Voice mail and e-blast campaigns.
• Podcasts and webinars.
• Online line list and easy reference guide.
• Prominent use of social media.

A New Beginning

That brings the Black/Tabone organization to its latest incarnation as a manufacturer — an incarnation that once again shows that they have a plan and are willing to change with the times. Here’s how this latest transformation took place, according to Black.

“About five years ago we signed to represent a manufacturer named Hadrus Vinyl Graphics Manufacturing. The company digitally prints in full color everything from banners and window graphics to wall graphics, floor graphics, vinyl wraps of all kinds, corrugated plastic and show displays. It can print any size graphic for any application from a simple floor graphic to a skyscraper wrap.

“From the outset we enjoyed tremendous success with them. They were number three in sales for us. Over the course of our relationship, we had the opportunity to visit with the company’s owner who let us know of his plans to retire in a few years.”

Black continues that concurrent with this, the agency was notified that it was losing its number-one line. He points the finger at himself when he explains, “We were guilty of making a huge mistake in that we allowed our largest line to represent more than 60 percent of our income. And now after taking the line from $800,000 to $4.5 million in sales, we’re being terminated without even the courtesy of 30 days’ notice.”

Keeping in mind the desire of the Hadrus owner to retire, Black and Tabone revisited Hadrus and struck a deal to become manufacturers effective the beginning of this year. Black explains that “While we’re no longer reps, The Identity Group stills exists in that it purchased Hadrus. We’ve resigned from the MLR Alliance and will continue to work with them as our reps — and will continue to be members of MANA. In addition, we’re looking for ways to become more involved in the association.”

To further explain how and why the Identity Group made the Hadrus purchase, the following information was communicated via the company website: “This is a fairy tale ending — as not every supplier-rep relationship follows this path. Sadly, reps work hard and then suddenly find themselves out of a job. In thirty days (if you’re lucky to get notice) you’re without a lead line and a significant percentage of your income. Overnight you can go from top producer to wondering how to explain to your family that your income was just cut in half, or more….”

Learning the Business

Black continues that he and Tabone had to navigate a bit of a learning curve while making the move from agent to manufacturer. “We’ve got years of experience under our belts when it comes to selling products, but now we’re faced with the tasks of purchasing and production.” And, they’re also faced with the task of establishing a rep network since their goal is to go nationwide. “Naturally we’re working with the alliance and we’re going to meet with them to determine how involved they want to be. At the same time, we need to put eight to nine rep groups together to cover the country. Luckily we’ve been reps for a long time and we know who the good ones are in the country. They’ll be the ones we reach out to initially.”

Asked what attributes an agency must have in order to be attractive to Hadrus, Black explains, “Certainly we want people who want to get involved with what we’re doing and who are willing to take risks.” He adds “We’re not looking to pressure anyone to work with us. There’s got to be a level of mutual interest.”

As the new Hadrus organization works to build its rep network, Black notes that his and Tabone’s years of experience as independent manufacturers’ representatives will probably influence how they partner with agencies in the future. He addresses a few areas of concern that he and other reps have had to face over the years and offers his rep-turned-manufacturer view:

• Post-termination compensation — “If a rep developed a territory and has orders in the pipeline, they deserve to be paid for the work they’ve done.”
• Shared territorial development fees — “You’ve got to take a look at the territory. As reps we worked with shared territorial development fees with manufacturers that ranged from $750 to $1,200 monthly. The bottom line is I have no problem working with them if we’re talking about a startup line when there’s no business in the territory.”
• Contracts — “We’re firm believers in written contracts and that’s the way we’ll operate. I continue to be amazed how many reps still continue to work on a handshake with principals.”
• Paying large commissions — “If, as a manufacturer, I find myself in the position that I’m writing large commission checks to a rep, I think I’d say, ‘God bless him.’ That rep helped build my business. There’s a reason why I’m writing him a huge check. This is something I hope I remember after I’ve been on the manufacturer’s side of the desk for a while.”

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