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When the sales manager for a manufacturing company that is committed to going to market with independent manufacturers’ representatives posed a question in the MANA LinkedIn discussion room, quick responses indicated that the subject of rep forecasting was still a hot topic among manufacturers and their reps.

Here’s how the manufacturer initiated the discussion:

“This is an ongoing topic back and forth. We as the manufacturer want to get better insight on what our reps are quoting and when they can expect to land orders. Reps like to keep their cards close to their heart. From a manufacturing standpoint, it helps us better forecast our production and improves our purchasing powers — but the reps still are hesitant to share details. We (the manufacturer) try to request it twice a month, just asking simple details of what new opportunities they are working on and what they expect to close this month.

“I am curious as to what ways have worked with other principals that offer a win-win solution? I don’t want it to get to a point where multipliers are adjusted for non-responsiveness. Thanks in advance to the community for your input.”

The manufacturer’s “thanks in advance” were hardly warranted as respondents were quick and plentiful.

The first rep to respond emphasized his appreciation for the manufacturer’s “…need to know what’s in the pipeline for so many reasons. It’s important that you and many other departments — both internal and external — have information in order to achieve efficiency and outstanding performance. However, twice monthly may be burdensome. Even if it’s only a verbal request, asking every other week ‘what’s new or what’s next’ is exhausting. Representatives always want to respond positively; but today not much is likely to have happened with existing opportunities in-between every-other-week requests. Also, most of us cringe at the mention of a forecast. Perhaps if you relabeled the task as a funnel report and requested it quarterly, you would get higher participation with more meaningful feedback. Preparing this type of reporting is extremely time-consuming, so twice monthly reports (even verbal) are likely to be viewed as burdensome rather than beneficial. If for whatever reason quarterly is not acceptable consider monthly at most.”

Echoing those comments was another rep who noted, “Having to forecast is extremely time-consuming and it is more of hope and guesswork than anything else. Second, if we are wrong in our assertions, then we get our feet held to the flame. If it’s not enough, then we get a phone call and are told to add more. Most salespeople — if they are truly interested in your line — will be excited to tell you about a big opportunity that’s coming up. You should know about that fairly quickly if they get excited enough to share that kind of opportunity. If your reps are not sharing big opportunities coming up, you have to question if you have the correct reps.

“Another reason why reps hold their cards close to their vest is because of comments like the very last one that you made. Knocking their commission rates based on non-communication is never helpful and it seriously damages any relationship between manufacturer and representative. I always tell my manufacturers that if you are not hearing from me, then there is a problem. We speak to our manufacturers over the phone and through e‑mail daily. If you are not hearing from your reps except when making field visits or because you have a question, you may need to seriously question if you have the correct reps.”

Endorsing the view that quarterly reports might be more realistic, another independent rep explained his view that “Reps make their money by establishing and farming relationships with our customers. That takes time on the road face-to-face with customers. If every manufacturer I represented required reports every other week, I would lose two days of road time which is 10 percent of the work days in a month. Would a 10 percent reduction in my sales forecast justify the twice-monthly reports?”

Showing enthusiasm for both the discussion and for quarterly communication, another rep said “WOW, what a huge topic and so very important. Quarterly is the ticket and being flexible to use the data generated by our CRM is also important. Asking too often and requiring that we use our principals’ format just takes away more of our critical sales time.”

A vote in favor of more than quarterly reports came from a rep who said “Expect once a month and be certain the form ‘quote status’ requires no more than 30 minutes to complete. Therefore, the professional sales rep can use the other 30 minutes following up with the customer prior to his updated response to the principal. This process now serves as a very beneficial tool for both parties.”

He added, “I believe EOB (End of Business Day) due dates that are Mondays will yield the best update and intelligence.”

The final independent rep who took part in the discussion explained that “All too often status reports are a guessing game on all three ends — customer, rep and supplier. Certainly, there needs to be an information flow but at what expense? It was well said when a previous contributor wrote about losing time that can be better spent elsewhere. For more than 30 years, I have been a commission-only rep, and I can assure you some report that may not even be read does not motivate me. A good line of communication — whether by phone, e‑mail or letter — among the three interested participants is much more valuable, in my opinion. I am motivated by a smooth, cohesive team and commission checks. And, finally using a principal’s format for reporting is a time-consuming pain.”

If proof was needed that the manufacturer who started the conversation wasn’t alone in the discussion room, one of his fellow manufacturers noted, “Speaking as a manufacturer, we have struggled to get quote follow-up to be accomplished by the reps, though it is in their rep agreement. Even good quarterly information is a struggle for us, and when we do spot checking, we are finding (more times than not) that our reps have never reached out to follow up on a quote with their customer.”

Lessons Learned From the Line Card

A manufacturer recently explained how valuable a rep’s line card can be even before a relationship between rep and principal is established. According to the manufacturer, “By carefully going over a rep’s line card, we can save ourselves a lot of time. It really doesn’t take much time for us to determine what customers a prospective rep spends his time with. All we really have to do is look at their line card. On the other hand, if we look at the line card and determine there’s nothing complementary, we won’t even make the most cursory effort to consider him. It’s really not all that complicated for us. With all the difficulty reps — and direct salespeople for that matter — have in getting face-to-face with a customer, our figuring is that a rep needs every advantage he can get. And, having complementary lines to speak about is a major advantage. That not only makes the rep’s job easier, it makes the customer’s job easier and more efficient. If the rep is carrying the correct lines, that means the customer has to see fewer salespeople.”

He concluded by noting, “Manufacturers should also want to work with reps in a territory where they already have a good number of customers and that they know how to sell customers who are compatible with the product that the company produces.”

The Value of Rep Performance Reviews

“If I regularly conduct performance reviews of my in-house employees, why wouldn’t I do the same with my network of outsourced sales professionals?” That’s how one manufacturer began a roundtable discussion at an industry event this spring and he was quick to answer his own question. “The fact is, I do perform those reviews and it’s worked out very well for both us and our reps.”

Here’s his thinking: “We’re hardly alone in how we follow this process, but in addition to sales figures, we’ve made a concerted effort to throw some other considerations into the mix. For instance, as we consider the larger picture, we kept our eyes and ears open to some of the other functions that our reps perform on our behalf. Several of our reps conducted mini-trade shows that we were never aware of previously. On top of that there were any number that conducted in-plant seminars with customers.

“Here’s the real point, there’s a great deal that goes into the rep’s effort to gain sales and all of those additional efforts should be included in any type of annual review of their performance.

“I’m glad to say that our reps overwhelmingly approved of our approach and we continued to learn more about them and their organizations. It was also interesting that many of them were really modest about all the things they did for us, but once we learned about their extra efforts, we were quick to praise them.”

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