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How can I be sure that I’m getting my fair share — if not more than my fair share — of my reps’ time in front of customers? That’s a question that’s been asked time and again by manufacturers that have either made the decision to go to market with independent manufacturers’ representatives, or who are just on the verge of making such a decision.
To answer that question or at least to alleviate the concern that many manufacturers have about sharing time on the rep’s line card with other non-competitive manufacturers, what’s needed is a philosophy or mindset that going to market with independent agents is the right move for the company. Then, obviously it takes a belief in the synergistic approach to sales and marketing, in that the agent is a solution provider who has at his disposal any number of solutions to any number of customer problems. By calling on customers with a range of complementary products, chances are the rep will have better luck gaining an audience than a direct salesman with just one product line at his disposal.
But, back to the original question of how does the manufacturer have confidence that he’s one of his rep’s “emotional favorites”? The answer lies in the fact that both sides — principal and independent representative — have work to do to maximize the efficiency and productivity of their relationship.
This subject was analyzed several years ago when Agency Sales published an article analyzing the manufacturers’ rep-principal relationship. In that article, it was emphasized that there must be an appreciation that both are traveling a two-way street — and the relationship must be beneficial to each of them. To achieve that admirable goal, each needs to know how to work with each other. And, being able to work with each other grows out of a knowledge of how each operates and what challenges each faces. Once that’s done, the manufacturer can rest assured that he’s getting his fair share of the rep’s time, and the rep is allotting a fair amount of time to his or her “emotional favorite.”
Emotional Favorite Formula
Several manufacturers that are confident they enjoy that title of “emotional favorite,” indicate that the formula for working well with reps (and enjoying a fair amount of their time) is fairly simple. According to one manufacturer, “We accept the agent as a professional member of our organization.”
He went on to say: “Here’s the secret to success — involve the independent sales agent in various phases of your marketing. For example, the agent may have suggestions on packaging, sales promotion and advertising. Listen to them. Many agents have strong ego drives and thrive on involvement. When other principals lean heavily on the agent, you may have to fight to capture his interest and to get constructive advice. Stay close to your agent by making him or her part of your team.
“Your communications must be clear and concise. The agent depends on you for information about your products, processes and other matters that bear on selling for you.
“The agent’s interest, challenge and profit — as does your profit — comes from making sales. Don’t burden your agent with details. Keep it simple. Help cut through to the heart of what you expect your agent to accomplish — sales!”
Wanting More of the Rep’s Time
Lest that most important ingredient in the recipe for getting more of the agent’s time — communication — isn’t emphasized enough, consider for a moment what another manufacturer suggests. Rather than just complaining about how he has to share his rep’s time in the field with many of the other manufacturers on the line card, this manufacturer has taken a positive approach. “I know I’m not going to get all of my rep’s time, and I certainly won’t get the amount of time that I’d get with a direct sales force, but I’ve developed an approach that works well for me.
“When I want more of the rep’s time and attention, I make sure I’ve got a pressing need for it. For instance, let’s assume I’ve got a new product I’m introducing. Rather than just sit back and bemoan the fact I’m not getting enough of the rep’s time, I’ll let him know why this is important for me, why it’s important for him and how it meets the needs of customers. I find that kind of one-on-one communication does wonders for me, and the reps, in general, have been extremely cooperative.”
Putting some additional meat on the bones of this discussion of getting the right amount of time from independent agencies is Michael Roemen. Roemen, independent sales rep manager for 9Wood, Springfield, Oregon, maintains that it takes a combination of communication, project initiation, but most important an agent’s sales commissions to let him know his company remains uppermost in the minds of his reps.
How does 9Wood accomplish its goal with its network of 27 agencies across the United States?
Agreeing on Expectations
According to Roemen, an integral part of the company’s effort to achieve that ever-popular mindshare of their reps comes in the form of annual meetings with agencies that spell out what the shared expectations are for the coming year. “What we’ll do is look at territorial sales data covering the last three years and then mutually come up with expectations — not goals — for the coming year.” He stresses how important it is for the agents to participate in the process since they’re the ones who have to meet those expectations out in the field.
To keep tabs on how each of his company’s agencies is performing towards meeting those expectation, he explains that “We created a series of dials that visually show us how they’re performing. We communicate this performance to them quarterly. I’m sure there are some that just glance at the dial and leave it at that, but others who may be lagging a bit can take the opportunity to look at what they’re doing, determine what they should do to meet expectations and ask us for assistance, if needed.”
Dialing in to Performance
Roemen explains, “As far as the dials go, each firm name is listed above each dial, and the upper number (in thousands) represents the ‘on pace’ figure based on taking their annual goal and dividing by 12 months. The lower number shown is their actual sales year-to-date, also in thousands. This is a nice quick way to see how each rep firm is doing. We publish this information on our company-wide intranet so anyone can see it. It also helps alleviate issues when someone comes to me and says, ‘So-and-so rep isn’t on track to meet expectations, etc.’ I can quickly open the gauge and say, ‘Well, by this main metric, they’re doing well selling for us, so let’s try to work through this understanding they’re meeting their goals,’ or ‘Well, by the gauge they’re not doing so hot. Tell me more since we may need to deal with this on a larger level with our feedback to them.’ By even quickly looking at the dials, all this information is readily understandable.
“The point in time that these are booked as ‘sales’ is when we get an order in hand. Reps can’t control when it ships, so we chose that point in time since it’s also sort of a backlog of business, for future commissions. If we did this based on when it shipped out the door, or when we invoiced or got final payment or something else, the reps wouldn’t buy in since they just can’t control all of them. Some of our projects are years in the making, so this purchase order milestone works well.”
According to Roemen, “We’ve got a great network of reps that work with us. Having said that, one important thing one of our agents told me when it comes to supporting their efforts in the field is to ‘Stay on top of the pile. Make sure you’re out there in front of us.’
Perhaps the most tangible indication that 9Wood is “staying on top of the pile” and thereby occupying that valuable time-share spot with their reps is the amount of commission it pays to independent agents. According to Roemen, “I had one of our reps tell us that when reps find themselves around the $50,000 level for commissions, it’s then that you know you’re a significant line for their firm, and you know you’re getting a significant amount of their time and mindshare. If it’s below that level, then we know we have to do something to help them reach it. That’s one way we approach getting our fair share of reps’ time.”
When asked if there’s any value to him in an agent proactively communicating his regular activities in the territory, Roemen said, “What we’re really looking for is information that’s important. If they need a level of assistance from us, then naturally we want to hear about it, and vice versa. But, if they’re contacting us just to let us know they’re busy in the territory — that’s not really beneficial.”
When all is said and done, Roemen agrees with the fact that “If you communicate with your reps, provide them with the support they need to get the job done and ask for their participation when it comes to agreeing on expectations, you’ll have and keep your reps’ attention. We feel that’s what we’ve been able to accomplish with our rep network, and will continue to strive toward.”
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