Following an internal reorganization, which included revamping the company’s sales effort, one manufacturer noted an immediate problem. “The first thing we saw was declining sales. Once we looked into the situation, we found that our reorganization had placed too many people in too many different positions. Our direct salespeople began to lose contact with their customers in the field.

“We had a history of working with independent manufacturers’ representatives several years ago and I’ve got to admit the experience was positive. We made a change to a direct sales force when new management took over our company.”

He continued that as sales continued to decline, “We felt we had better take another look at reps, and that’s exactly what we did — thankfully.”

A full 18 months after making the change back to reps, the manufacturer reports, “We made the right decision and none too soon.

“One of the first things we noted was that the combination of our reps’ talents was immediately noticeable. Their ability to hit the ground running, coupled with their in-depth knowledge of the territory, and their ability to maximize local contacts and relationships paid dividends.

“Another factor that showed reps were the right way for us to go was the fact that they were providing us with penetration at the customers’ location at a much higher level than our direct people accomplished.

“And finally there was the issue of synergy, something that we hadn’t paid enough attention to in the past. We were especially careful in how we chose the agencies we wanted to work with. That care paid off in the fact their line cards complemented our products to perfection. What resulted was that we were getting much more time in front of the customers than we ever did with a direct sales force.”

A side benefit the manufacturer concluded with was that “We’ve been able to continue with our internal reorganization without further impedance to our sales effort. Our customers report that they are receiving efficient and professional service and remain unaffected with our internal restructuring. That was our goal from the beginning and our reps have helped us achieve that goal.”

A Manufacturer That Pays Attention

An independent agent reported an important side benefit to having a close working relationship with manufacturers and went on to commend one of his manufacturers for paying attention to the rep’s opinions.

“I’ve always gotten along well with the company’s national sales manager to the extent that we’ve played golf and socialized with some regularity. I didn’t realize, however, how much he paid attention to comments I’ve made. For instance, just in passing I mentioned how I regularly met with a group of fellow non-competing reps for lunch. We never have a regular agenda. All we do is discuss business in general terms and share solutions to problems we’ve encountered.

“At one gathering a fellow rep emphasized how important it was to work with manufacturers who were completely committed to the rep way of going to market. I remember him saying that reps have to feel the manufacturer is genuinely interested in the services that we provide him and his customers, as opposed to just being interested in the fact the rep represents zero fixed overhead.”

Here’s where it gets interesting — the rep went to mention that weeks later, the manufacturer brought up this subject of commitment and went out of his way to “stress how important our agency and his entire rep network were to their company’s sales and marketing effort.”

He concluded by emphasizing how impressed he was by the manufacturer’s desire to learn from its reps.

Contracts Are Always Important

One of the most interesting and valuable services that MANA provides its members is the annual Attorney Forum. It’s at this meeting that MANA-related attorneys gather annually to discuss mutual concerns and share experiences concerning rep clients. At these meetings it never fails that the subject of contracts is raised. If anything, the following points concerning contracts remain constants:

• “While handshake agreements may have been workable years ago, the fact is that times have changed. The relationship between manufacturer and independent manufacturers’ representative is a business relationship, not a social one. Always insist and rely on a written contract.”
• “Specificity is critical. At the same time, it’s important to remain flexible during preliminary discussions with your prospective agencies concerning such things as territories, products, commissions, terms of commission payment, performance, the term of the agreement and the agent’s rights after termination. After the terms of the contract have been agreed upon, write them into the agreement.”
• “In constructing a contract always specify other points not contained in the contract in a letter of agreement. These points can include sales meetings and trade show participation, promotion involvement, service, etc.”
• Finally, remember that the suggested standard contract for manufacturers and reps that is available through MANA has been adapted by many businesses to get them started. It is available on the MANA website (www.MANAonline.org).

There’s Nothing Like In-Person Communication

When three non-competing manufacturers got together to discuss the relative merits of a marketing forecasting tool that allegedly made the job of forecasting more accurate, one of the manufacturers stressed that no matter what new processes came along, there’s still nothing better than sitting down face-to-face with your network of reps to learn what they know. The manufacturer noted that “We’ve learned the error of our ways. There’s really no easy way to come up with accurate forecasting. But here’s what we do — we sit down with all of our reps on a quarterly basis to study, revise and adjust forecasts so that each of them are better able to perform at a high level. But I have to emphasize here that it all comes down to communication. When our reps sense our willingness to learn from them, the door is wide open for the sharing of accurate information.”

Building Relationships

When an independent agent described his sales call philosophy to a manufacturer, the manufacturer was asked for his reaction. Here’s what the rep had to say: “When I make a call on a prospect or customer, my intention isn’t always to close the call. What I’m looking to do is to listen and ask plenty of questions. If anything, I’m always questioning and looking for more information. My feeling is that by being patient and searching out the customer’s problems, I’m building a relationship. In doing so, my goal is to be the customer’s ‘go-to guy.’”

The manufacturer voiced immediate agreement and noted, “This is the type of rep who probably doesn’t have any trouble getting through various voice mail or e-mail gatekeeping devices. This approach serves as a reminder that salespeople won’t get an audience with the customer unless they bring something to the table every day. That means even if the customer isn’t ready to sign on the bottom line, he expects the salesperson to provide him with something that will let him do his job better. That ‘something’ can turn out to be industry or territory news, the latest in research, new product information or input on the competition.”

Another manufacturer who overheard this conversation joined in by saying “It’s really no longer sufficient to simply have sales professionals in the field. What we really need are professionals who sell — and that’s what good reps take pride in, their reputation as professionals. When that occurs, everyone — manufacturer, customer and rep — benefits.”

Good Lines Attract Good People

Asked for his thoughts several months after signing on with an independent agency shortly after it was taken over by new owners to cover the Midwest, a manufacturer explained that the agency really got his attention because of its ability to attract good lines. “And with that lineup of very attractive lines, the agency has been able to attract and keep very attractive people to get the job done for us, them and our mutual customers.”

He continued that when the new ownership took over the agency, while there was already a wealth of lines on the line card, what was truly missing was a sense of synergy.

According to the manufacturer, “Here’s what they did to rectify the situation — they immediately began pruning their line offering. Since the number-one product lines in a variety of categories were already taken by other reps, they made a concerted effort to go after and get the number two and three lines in those product categories. While doing that, they made sure that each line they took on offered a true synergistic approach to the marketplace.”

Not satisfied with just working on their lines, he explained, “They then made huge strides to upgrade their staff. In large part because of their past contacts in the industry that they were serving, they were able to attract highly qualified people for all of their inside and outside sales positions. The change was immediate and noticeable. Any contacts we had with the agency were totally professional and put us completely at ease. It was obvious from the beginning that we had made the right choices going with that agency. The positive results all appear on the bottom line and we couldn’t be happier.”