This month’s article is the eighth in a serialization of the author’s life and career as an independent manufacturers’ representative.

Reprinted with permission from The Reputable Rep, Success in Sales and Life, by Sig Schmalhofer.

The Reputable Rep

Relationships

“I love to see reps! When they’re with me, they’re not with my competitors!” — Louie Armstrong, Ferguson Enterprises

The reputable rep, like the distributors and contractors in his market, has both a financial and personal interest in the people he or she does business with. Reputable reps can be the glue that cements factory-customer loyalty.

“The reputable rep forges relationships that provide an entree for sales managers to develop partnerships and negotiate programs with decision makers.” — Joe Cicora, National Sales Manager, Red White Valve

My friend Bill Glockner, president, Hirsch Pipe and Supply, weighs in on the reputable rep-manufacturer-distributor triangle: “The reputable rep promotes the development of long-lasting, supportive relationships with the rep’s manufacturers.”

In the sales business, there are careers that demand a one-time sale mentality; a hit and run. To be successful in this arena, an aggressive strategy is used.

The result of this tactic has opposing reactions from the unsuspecting prospective buyer: succumbing to the pressure or walking away. Car dealerships live or die with the hit and run sales approach.

Because it is a relationship business, the mentality of the rep in the industrial sales business is altogether different. Over time, reputable reps and customers become friends. The essence of the relationship is trust and respect. Reputable rep-customer relationships can last a lifetime.

“The reputable rep cares more about building long-lasting relationships than the big sale.” — Steve Shipley, Hirsch Pipe and Supply

These relationships are shared with manufacturers, not deferred to them.

According to Bruce Carnevale, executive vice president and COO, Bradford White Corporation:

“It drives me nuts when a rep abdicates his relationship with the customer and allows the manufacturer to ‘own’ the relationship. When that occurs, what value does the rep have to the manufacturer? Like all things in our business, it’s a balance. There should be an appropriate relationship between the customer and the manufacturer. The reputable rep fosters this, and guides it, but doesn’t abdicate it (or let it be taken) completely by the manufacturer.”

The Balancing Act

“At first glance, the life of a reputable rep looks easy and glamorous. Nothing is further from the truth! Early mornings, late nights, 24/7 availability, coddling customers, and meeting the high demands of their manufacturers who all have different agendas, reporting requirements, demands on the reps’ time and different cultures — make it very difficult to navigate and manage!” — Mark Taylor, Executive VP and General Manager, Bradford White Corporation

Reputable reps are like tightrope walkers. The key is balance. They balance the factory customer relationship, ensuring neither party has an unfair advantage. The reputable rep balances their call activity to ensure they are both servicing distributors and creating new business for them.

They must also balance the time spent on the lines they represent.

“A manufacturer asks his manufacturers’ representative, ‘How can I get more of your agency’s time selling my product?’ The reply was, ‘My agency devotes 20 man-hours a week to your line. Five hours of that time we spend selling your product and the other 15 we spend chasing backorders, correcting pricing, and fixing product issues.’” — Joe Maiale, VP Sales, InSinkErator

Another challenge for the reputable rep is balancing the needs of competing distributors in the territory. The reputable rep has experience and expertise to navigate these waters honestly.

“Being a vendor representative is a tough job. Dealing with competing wholesalers and dealing with competing contractors is challenging. I always appreciate it when I can trust that somebody is being honest and just giving me the facts so I can make the best decision.” — Mike Lorber, Ferguson Enterprises

The owner and president, of Firefighter Gas Safety Products, Tod Minato weighs in on the reputable rep’s balancing act:

“From my perspective, a reputable rep knows how to walk a tightrope. There is a conflict in every deal he puts together. He makes his living (commission) selling my product, but he has to put a good deal together for the customer because he represents the customer as well. The list of customers that a rep has a good relationship with is what attracts manufacturers to his organization. If a deal is skewed in the favor of one party or the other, the rep can hurt an ally. The reason I have stayed with Signature Sales so long is that they take the right approach of promoting fairness. To me, a deal is a transaction that either party would be willing to be on either side of.

“Looking for an edge on a deal is natural, but should not take priority over fairness and integrity.

“When a rep fails to see the complexity of representing both sides of a deal, it makes me uncomfortable.”

“Above all a reputable rep must demonstrate integrity with both his distributor and vendor partners. This can prove difficult as it means keeping secrets for each. In the end, the rep has to know what is right and work to ensure it is achieved.” — Bill Glockner, President/CEO, Hirsch Pipe and Supply

Teamwork

I’ve said many times that great teamwork makes a task feel like it’s not really work at all.

“Reputable reps believe in their lines and promote them. They work with us as a team to make it a success.” — John Potter, Ferguson Enterprises

A reputable rep who acts as a skilled middleman between the contractor and the distributor is a huge asset to any wholesaler’s team.

There are many times when the rep is the glue that holds together the contractor-distributor relationship.

Over time these “team wins” earn trust and respect. They insure an audience for multi-line reps with other products they are marketing.

“Reputable reps have honest conversations with us. Over time, a relationship is built that makes it easy to support the lines they represent.” — Fred Laube, Director of Corporate Operations, Hirsch Pipe and Supply

The Right Rep

Does the factory make the rep or does the rep make the factory?

This question is the business equivalent of the old chicken and egg question. I’ll argue that success occurs when the reputable rep and the factory meet the truck halfway. When the spirit of compromise and an unwavering commitment to succeed are established as top priorities, it’s a win-win!

In our business, every rep is not a fit for every line and no factory is a fit for every rep. The key is the fit:

• Alignment on marketing strategy.
• Ample manpower.
• Secondary market synergy.
• Personality.

When these components gel, marketing magic has an opportunity to occur.

Jeff Davis, VP wholesale sales, Reliance Worldwide, shared the following:

“Many years ago, I met a rep through AIM/R. He did not carry my product line, but I liked his style and his approach to business. He was located in a market my company was struggling in. After concluding that our current rep was not the right fit, I approached this rep about representing our line. His business was well north of $100M in sales. Since our line was worth less than $1M in his territory, I was pleasantly surprised that he expressed interest. More conversation led to the understanding and appreciation of our vision. He agreed we had a strong go-to-market strategy and that the product would sell with the right partner. We talked candidly about what was required to grow the market: a painful change on our end and a significant investment on his. We agreed to trust each other and make the commitments, investments and changes needed. Within five years, that rep was selling nearly $30M of our products in the same territory! My conclusion: Entering a partnership with a committed rep agency with the right fit can yield great results.”

Succession Plan

“Without a doubt, the biggest issue we see with reps is the lack of a strong succession plan. Because there are many unique challenges in the rep business, succession planning can be difficult. The best resource available is networking with reps who have been successful at executing their succession plan.” — Bruce Carnevale, Executive Vice President and COO, Bradford White Corporation

In the early years of Signature Sales, about the time I finally began to see light at the end of a long tunnel, my mentor and lifelong friend, Carmen Catania, told me I needed a succession plan. I remember boldly replying, “Are you out of your mind? I don’t even know if my business will still be viable in five years, one year or even tomorrow.” Carmen was not deterred.

He kept reminding me … and reminding me. I’m happy to say that this hardheaded German finally listened. Shortly after we entered the new millennium, our plan was put in place and ultimately executed.

If you are the principal of a rep firm, I implore you to take Carmen’s advice. Ensure long-term viability of your agency. Reputable reps discuss long-term planning, business savvy, and succession plans when interviewing for top lines.

“The rep must have a plan for growth, sustainability, and succession. Without a plan for addressing the future, the agency will eventually fold or be absorbed.” — Mark Taylor, Executive VP and General Manager, Bradford White Corporation

Reputable Reps as “Go Givers”

I’ve shared a wonderful book called The Go Giver with many friends, including “Mr. Go-Giver,” Joe Notte.

Bruce Carnevale, Executive Vice President and COO, Bradford White Corporation, shared the following story:

“I stopped by Joe’s office and saw a little book called The Go Giver. After sarcastically asking Joe if he was reading it or if he wrote it, he said, ‘Sig sent it to me.’ So, of course, I read it! The book delivers a very simple message for life and business: Always do the ‘right thing’ without expecting anything in return. I would add that doing the right thing is certainly not the same thing as doing the easy thing. Sometimes doing the right thing involves stressing a relationship, which can be a challenge for most people, but especially salespeople.”

Success in the business world is the by-product of doing the right thing.

Steve Grosslight, Ferguson Enterprises, says “A reputable rep is the guy that can walk that fine line that separates distributors in the same market. The best example is a close friend of mine who worked for Kohler for many years. Even though he has two family members working for competitors, he’s always been able to separate right from wrong. It’s a talent that not all reps have been able to execute.”

Pricing, Competition and Creativity

“A reputable rep knows when to say ‘no’!” — Bob Berumen, Hirsch Pipe and Supply

The biggest mistake a rep can make is to focus solely on price. Many studies have proven, over and over again, that price is not the number-one reason a customer moves on to a different rep or supplier.

More important considerations are relationships, service levels, product quality, and product demand/acceptance.

But it would be naïve to say that pricing is not critical. It’s a competitive world and purchasers are always weighing value propositions. Having a clever angle is a good way to tackle the pricing conundrum.

Louie Armstrong, Ferguson Enterprises, has a history of finding clever angles to address pricing challenges:

“Years ago, I called on a plumbing contractor who was in the market for three truckloads of ABS pipe (a $60,000 order). To close the deal, I brought with me an official, printed price sheet from the manufacturer with my actual cost — and a pair of dice. I knew from past experience that the order, if it went out for bid, would be awarded to a distributor that bid 1½ to 2 percent over cost. So, I proposed a deal that the contractor agreed to. He would roll the dice. The sum of the numbers rolled would be discounted 50 percent. If he rolled a 4 and a 5, the sum would be 9, discounted 50 percent, he would be marked up 4½ percent. If he rolled snake-eyes, he would be marked up one percent. Even though the math and odds were in my favor the contractor proceeded because it was fun. He rolled two sixes and the order was priced at 6 percent over cost!”

Sense of Urgency

“Reputable reps answer their cellphones. Most reps screen calls!” — John Potter, Ferguson Enterprise

In this, the era of e-mails, texts and other electronic instant messaging, it amazes me that the most common complaint customers have is slow response time from factories and reps. I’ve said many times that the thing I like best about being a rep is that an average guy with a sense of urgency can be regarded as a superstar of sorts.

The response time for good news phone calls in the industrial sales business is typically good. Problem calls are a different animal altogether. The percentage of reps that consistently returns calls promptly when faced with issues to resolve or problems to solve is dreadfully low.

These reps have not learned that problems are opportunities in disguise. Problems that arise provide opportunities for the rep to demonstrate value. Problem calls can trigger one of the following plays.

Delegating: It is not unusual for reps to call their go-to person in the office to resolve a customer problem. I call this “Depositing a turd into someone else’s mailbox.” When this tool is in a rep’s playbook, it matters not that the recipient’s mailbox is already full of turds.

Shifting into neutral: This is the classic case of rep paralysis culminating in “The Stall.” The rep that stalls hopes that by some miracle the problem will magically go away. Stalls might be caused by the rep’s factory using “The Stall” on them. There are many reasons or excuses for factory and rep stalls. The most common, real or not, are “traveling” or “in a meeting.” Reps employing “The Stall” rationalize that it is fruitless to return a customer’s call without a resolution.

Taking care of it now! The reputable rep has a different mindset. He consistently returns calls, with either good news or bad news. It is a top priority. Here’s an example of a reputable rep returning a problem call:

“I am so, so sorry about this issue. Please understand that I will do everything in my power to get it resolved. I’ve left a message for the factory’s regional manager. In the meanwhile, I’m looking at other options. I know that when I hurt you, I hurt your customer as well. If it would help ease your pain, I would be happy to call your plumbers being harmed.”

All customers demand swift resolution of urgent issues. That’s a given. However, the advantage that the reputable rep has is that he understands his customer.

I had a 30-year relationship with the owner of a large independent distributor who had zero tolerance for problems. When he called, not only did I interrupt whatever I was doing to answer his call, I committed to resolving the issue eyeball to eyeball. If at all possible, I would rearrange my schedule to be in his office the same day or the next morning. I would walk into his office and he would start the conversation exactly like this:

“Sig, you didn’t have to drop everything and come out here to see me!”

I would just smile. Then he would let me have it, getting everything off his chest. I would simply reply, “You are absolutely right!”

“So you agree with me?”

“Yes, sir!”

“Well what are you going to do about it?”

“I’ll fix it!”

After this initial plea for help, he never asked how I would fix it but felt confident that I would. He typically closed the conversation with this: “Thanks a million. I can always count on you!”

Needless to say, it’s not always smart to drop everything to answer the phone. We would be largely ineffective and in some cases rude if this was standard practice. However, a reputable rep picks his spots. He establishes priorities.

In the above scenario, fixing the problem wasn’t always easy. But once we worked our way through the face to face exercise, with a little give and take, things always seemed to work out. The outbursts were not common, perhaps quarterly, but when they did reoccur, our business relationship turned another notch tighter.

I remember, around lunchtime, popping in on this customer to deliver a requested job quote. I started the conversation, “You wanna grab a quick sandwich?”

“I’d love to, but I’ve got a factory man from Chicago on his way to my office to take me to lunch.”

“No worries, I’ll call you to schedule our next meeting.”

“Hang on a minute, Sig.”

He put his number-two man on speaker phone. “When the factory man from Chicago arrives, tell him I had something come up. Take him to lunch and fill me in later.”

I was happy for me, but obviously embarrassed for the factory man. Nonetheless it underscores the relationships that reputable reps have in the marketplace.

Story Time: Twin Suitcases

By now, I’m certain my credibility is shot! I keep talking about wonderful, almost unbelievable success stories. I could go on at length about all the times I screwed up or struck out, but since this is my book, I won’t. Let’s face it, the best hitters in baseball make an out 70 percent of the time. Just to tip the scale a bit, I’ll tell you an unbelievable story that was my biggest blunder of all time. After accepting a job with Moen at the ripe age of 25, I was provided an Oldsmobile station wagon and a set of black display cases for use on sales calls.

They looked like ordinary travel suitcases with clasps on both sides, but inside was a black velvet cloth that blanketed faucet samples. I was taught to spread out the velvet as the background for the shiny chrome samples. My boss preached, that placed on the black velvet, the samples looked like fine jewelry. The cases also included a valve cutaway, useful for discussing the heart of every Moen faucet, the cartridge.

While relocating, for the first three months as the Moen rep in the inland territory, I spent weeknights in a hotel. It was a late Friday afternoon. I was driven to make that one extra call, even if it meant that traffic would be a killer heading home. I was following up on a lead I had dug up concerning a new work plumber with lots of work whose house double-teamed as his shop. I got the information at a distributor counter for the price of a donut.

A plumber told me that the shop he worked for only installed Delta faucets. He added that the owner’s wife was the real boss and did the purchasing.

I traveled through several back roads before finally arriving. Yes, this was a cold call! With a catalog in one hand and display case in the other, I knocked on the door.

“Mrs. Plumber” invited me into the house/office. I sat across from her at her desk. After breaking the ice, I asked her a question I already knew the answer to, “Is your ‘shop brass’ Delta?” She confirmed. Then I asked her the thing that I had been trained to do at Moen’s sales school, “Does your shop plumb any houses with back-to-back bathrooms?” She responded, “Of course. We specialize in entry level homes and back-to-back is the cheapest way to build affordable housing.” I was so glad that this woman knew her stuff.

She had opened the door for a discussion about Moen’s ability to rotate the cartridge of the tub shower valve to put the hot and cold piping where it needed to be on both sides of the wall. It could be done without crossing the piping; a big labor and material saver for back-to-back shower installations.

The cutaway would be my silver bullet. I set the case on her desk, flat on its back like a treasure chest. I released the clasps on both sides and slowly opened the case. There were no jewels or gold medallions in my case, nor were there faucet samples. All there was … in full display … was … my dirty laundry!

The case of the twin suitcases had just been solved and my face was beet red. In a fraction of a second, I was transformed from a man in full control of a conversation to a boy facing his second grade teacher after peeing in his pants.

In retrospect, I’ll report to you three positive outcomes:

1. She didn’t call the police to report me as a pervert.
2. I learned a valuable lesson: never travel with a personal suitcase that matches a display case.
3. It’s possible to recover from even the largest of blunders on record.

After a hearty laugh, she encouraged me to bring in the correct suitcase to show her my prized cutaway.

On that embarrassing Friday afternoon, for some unknown reason, the plumber’s wife felt sorry for this knucklehead salesman and changed all of her orders.

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