Six Manufacturers’ Secret WeaponBy Charles Cohon
Working Together So Everybody Wins
This is a true story.
Six non-competing manufacturers now have an informal alliance to share the cost and benefits of expensive resources that would be too costly for them to deploy on their own. Listing their products illustrates how these companies’ product lines fit the same market but don’t overlap, making it practical for each company to comfortably share resources with companies that are not its competitors.
- CNC Machining
- Metal Fabrication
- Rapid Prototyping
- Swiss Precision Turning
Because they are not competitors, their informal alliance lets them share sales leads, best practices, and even their sales force. So, when the electroplater gets a sales lead, the electroplater’s offering is presented to the prospect first, but then the stamper gets a crack at the same customer, as do all the other manufacturers. And had the stamper had gotten the lead first, the electroplater and all the other manufacturers would get a crack at the same customer.
And when one creates a best practice in, say, vendor managed inventory or bin stocking, each of the others will hear about it and have the chance to create similar programs.
How is such an informal alliance created and maintained?
These six manufacturers, and others, share the same outsourced sales force company, or manufacturers’ representative, to manage their sales in a particular territory.
The representative is a territory clearing house for all leads received by any manufacturer on the representatives’ line card. When any manufacturer on the representative’s line card has a sales lead in that territory, that manufacturer’s product is presented to the prospect first, but the representative eventually exposes all the complementary non-competing products on that representative’s line card to that prospect, so eventually every manufacturer gets the benefit of all the leads that representative receives.
As manufacturers on the representative’s line card develop best practices, the representative is the conduit through which each non-competing manufacturer often learns about those best practices. If there is a new development in project tracking or lead management, each of the complementary, non-competing manufacturers will likely first hear about it from a representative. Some manufacturers even take that a step further and tap their best and brightest representatives to serve on their Representative Council and serve as the manufacturers’ informal executive peer review board.
This is why manufacturers’ representatives are not just a manufacturer’s stepping stone on the way to being able to afford a direct sales force. Representatives can also be the means to informally collaborate with manufacturers of complementary non-competing products, making representatives a “secret weapon” manufacturers can deploy to outperform competitors who go to market with captive sales forces.