MANA hears from manufacturers’ representative members that principals want them to fill out reports in their online CRM software. Most tell us they find this time-consuming and costly, and the exercise provides little if any value to the principals, who often don’t have time to read the reports. A few tell us they find the reports helpful.

We asked the MANA Professional Development Council (PDC) and Manufacturers’ Educational Development Council (MEDC) to write this article to help our members deal with this issue. We wanted a solution that provides value for both them and their principals. High-quality manufacturers who appreciate the values their manufacturers’ representatives provide already partner with them this way. We want to focus on those who need to understand the negative consequences of a one-sided approach. To follow is what they came up with.

Here’s the scenario. A principal comes to the manufacturers’ representative and says “You need to fill out reports in our online CRM.” How would you respond? What strategies or tactics would you use to persuade them to use a different approach, one that works for both of you?

Defining the Relationship

You start with a conversation with the principal.

Lead with a statement as follows: “Our business relationship purpose is to maximize profits for both of us. We need to discuss the most efficient ways to grow sales and protect our most valuable resource — time.”

Ask why the principal feels they are not already getting the information they need. Asking what they need and how you can deliver it, without impacting sales performance, only creates good results. Offer to provide the manufacturer with regular updates by e‑mail, phone and text.

Some manufacturers’ representatives use CRMs that provide customized reports for export to a csv file. Usually the data they are requesting already exists in the representative’s CRM. If you use such software, offer to send them the data they are requesting in a digital format and then they do a mass import into the CRM the manufacturer employs.

Some reps have questioned if they can be legally required to accommodate this request, but they also note that failing to do so may jeopardize the line. Other reps point out that requiring reports may jeopardize the independent contractor status that allows manufacturers to avoid paying matched Social Security and Medicare taxes on sales commission checks, but manufacturers sometimes do not find that argument to be compelling.

Making a Choice

What if the principal comes back and gives you a choice: “Provide the reports or we terminate the agreement!”

Now, the manufacturers’ representative faces a difficult decision. Really “high-quality” principals appreciate and understand the value a professional manufacturers’ representative provides. They won’t make such a demand. They work out a plan that works for them and their manufacturers’ representatives.

Have there been significant changes in the management of the principal making such a demand? If yes, and the principal used to be really great, that’s not a good situation. You’d better hope they are open to learning the right way to partner with you. If not, time to replace them.

If no, and you attempted unsuccessfully to work out an alternative system that works for both of you, the choice becomes more difficult, particularly if they represent a significant amount of your income. No doubt, taking the time to fill out online reports takes time and that costs money. You balance that with the choice of losing the line and you decide whether to fill out the reports or not.

Terminating the Relationship?

On the other hand, the manufacturer runs a high risk that his professional manufacturers’ representative, the one who brings them lots of orders, decides to terminate the relationship. When they go to find a replacement and professional prospects learn they need to fill out online reports, chances are high they prefer not to work with them. That means they sign up reps who sell less. Does the value they get from the online CRM reports exceed the loss in lower sales?

One other strategy you can try — in negotiations, when one side wants to change an agreement that negatively impacts the other, get something in exchange. For example, if they currently pay your commissions after the customer pays them, ask for payment on invoice.

Manufacturers’ representatives should have an idea of how much their time is worth in real dollars. Develop an estimate on the annual cost of preparing the online reports and present it to the principal. This helps them understand your reluctance to supply the reports. Knowing how much it costs you to provide them makes them more receptive to offer you something in return or altering how they get the information.

Using Online CRMs

The use of online CRMs provides a value to the manufacturers who use it. Is there a way they can use it that provides value to the manufacturers’ representatives as well? A few MANA members tell us they do get value from their principal’s online CRM participation. When manufacturers approach their manufacturers’ representatives to ask them to participate in their online CRM, they need to offer something in return. They can either use the CRM in a manner that provides value to the manufacturers’ representative or compensate them in some other manner.

The need to share critical information between the rep and the principal is high. There has to be a joint benefit — whether the manufacturer makes adjustments to the territory sales plan to help the rep land accounts or the rep gets access to productivity enhancing tools to improve the selling process. Without a joint benefit, you do not reach the win-win state and the argument to complete reports that only benefit the manufacturer is weak. This takes a great deal of time and must be balanced with providing a tangible benefit to the rep. If all the manufacturer does is pound the reps into providing reports with no tangible benefit, the psychological effect on the reps is extremely negative.

The obvious answer is to create a solution that works for both parties. Like agreements, arrangements that work for one party — but not the other — work for neither.

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The following MANA PDC and MEDC members contributed to this article —

PDC members: Alan Lupton, Lupton Associates; Charlie Hurd, Hurd & Assocs., Inc.; George C. Murphy, G. Murphy Sales LLC; Jennifer B. Tibbetts, Power Equipment Specialists, Inc.; John Ahlering, Coastal Technology Group; John Davis, Paul Davis Automation, Inc.; John M. Knott, JD Technologies, LLC; John Mckeague, BDMR Enterprises, LLC; Les Frank Rapchak, Tech Sales Co.; Michelle T. Jobst, Jobst Incorporated; Sid Ragona, Ragona Scientific; Steve Williston, S. Williston Sales Co., LLC; T.J. Winalski, Environmental Air Specialties, Inc.

Current MEDC members: Charles Ingram, Eriez Magnetics; Justin McCarthy, Scot Forge Co.; Michael Roemen, 9Wood; Peter Zafiro, LinMot USA, Inc.

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