Issue: August 2018

What Happened to Straight Commission Reps? — Part Two

By
image

© denisismagilov | stock.adobe.com

Last month I answered a manufacturer’s question about why manufacturers’ representative agreements increasingly include clauses covering Life of Part/Life of Program (LOP/LOP), shared market development fees, and/or extended post termination commission.

This month I answer that manufacturer’s follow-up questions:*

“Let’s say my rep Fred closes a major order at Acme Company and I give Fred LOP/LOP commission on that program. Later I replace Fred in that territory with a new rep, Nicole.

“When that program comes up for renewal, Nicole is managing negotiations for a reorder that is still commissionable to Fred due to LOP/LOP.”

  • “Why would Nicole work hard to maximize the selling price on this reorder?
  • “Why would Nicole work hard to keep this reorder from going offshore?”

Why Would Nicole Work Hard to Negotiate the Best Deal for Her Principal?

Nicole plans to write new orders with Acme and earn LOP/LOP commission on those new orders. Nicole knows that if she lets prices tumble on this reorder it will be harder to get a good price later when Acme’s next new project comes up. Maintaining a good margin now serves Nicole’s interests when she negotiates with Acme on the next project.

Of course, if the principal still has lingering concerns about Nicole’s motivation to maximize the selling price, the principal can always give this negotiation extra attention and oversight.

Why Would Nicole Work Hard to Keep This Project From Going Offshore?

Once Acme starts sourcing its projects offshore, Nicole will face offshore competition on every future project she quotes to Acme. Nicole will do everything she can to avoid having Acme starting to source its projects offshore.

Bottom line, most manufacturers would love to be facing a situation where they had so much business that managing quotes for reorders became a major undertaking. After all, you had to get the orders in the first place for reorders to be an issue. And getting orders is exactly what reps do best.

* The manufacturer’s comments have been edited for clarity and brevity.

Manufacturers Requiring Their Reps to Perform More Tasks — How Should Reps Respond?

By

When I owned my manufacturers’ representative business back in the last millennium, my principals wanted one thing from me — orders! Our members now tell me principals still want orders, but other activities as well — filling out online CRM reports, market research, succession plans, and more. What’s a rep to do?

Last year, I made a presentation to 20 roofing manufacturers’ representatives. During the Q&A, one participant asked, “Are principals asking MANA members to fill out online CRM reports?” I asked the group, “How many of you have principals who asked you to fill these out?” Half the hands … Read the rest

Time and Circumstances Change Expectations

By

Time was that reps sold products and received a commission check. It was as simple as that and the arrangement seemed to suit both sides — manufacturer and rep. But times have changed and so have what each side expects from the other.

That scenario served as the beginning of a conversation with Craig Lindsay, CSP, CPMR, founder and president, Pacesetter Sales & Associates, an independent manufacturers’ representative agency selling safety and industrial supplies to the industrial market across Canada. As the conversation progressed, however, several variables were thrown into the mix and the relationship isn’t quite as simple as … Read the rest

IUCAB Names George Hayward Award Winner

By

photo of Peter FeiglIn Europe, manufacturers’ representatives are called “commercial agents.” And each year the Internationally United Commercial Agents and Brokers (IUCAB) chooses an exceptional commercial agent to receive IUCAB’s annual “George Hayward Award.”

This year’s winner Peter Feigl, of Peter Feigl Handelsagentur in Austria, gave an extraordinary acceptance speech. With Peter’s permission, we are reprinting his speech in Agency Sales magazine:

My name is Peter Feigl, I am 40 years old and I’m from Linz in Austria. At the beginning of my working life, I made an apprenticeship as a mechatronics. Then I became a field manager. And now I am a … Read the rest

Sub-Rep Success in a Niche Market

By

Earlier this year when Grant Melocik, Grant Melocik Sales, notified MANA that he was not renewing his membership, that information was of the “good-news, bad-news” variety. Obviously, the bad news was he wasn’t keeping up his membership; but the good news was he was at the point in his professional career where he was looking forward to a well-earned retirement.

In his explanation for not renewing his membership, Melocik emphasized that “I did want to thank MANA for all that I have been able to learn from the organization and for the contacts that allowed me to pick up additional … Read the rest

Should We Write Off the Charge or Risk Losing the Account?

By

Credit and Collections:
New and Better Choices

Something has changed. It may be the effect of social media, or better banking regulations and procedures, or a deeper concern for business reputations. Whatever the impetus, manufacturers’ representatives like us now have better
options than slow-pay, no-pay or sue.

Every company occasionally confronts a client who doesn’t pay on time, refuses to pay altogether, or can’t pay the full amount for goods that have been manufactured and delivered. Like many of you, I’ve had clients take advantage of me as I struggled to build my business. Fortunately each bad episode always provided … Read the rest

Reasons Why Salespeople Aren’t Successful at Consultative Selling

By

Yesterday, a sales manager I was coaching asked me to explain the difference between a great question and a tough question. I gave him the one-minute version but this article has the expanded version of that answer.

I’ll use my world as an example and ask you to translate accordingly.

In my world, while I might occasionally be on a first call with a senior sales leader, I am most frequently speaking with the CEO. With CEOs, the most-common issue they articulate is “I’m not sure we have the right sales leader.”

We have three levels of questions and it’s … Read the rest

The Myth of Treating People Fairly and Equally

By

I’ll just come right out and say it. I believe that treating customers fairly and equally is a mistake. It’s unprofitable. It belittles customers and employees, and it’s unethical. There, I’ve said it.

Certainly, we should treat people fairly — but not equally. I’m not advocating some Orwellian decree that “some animals are more equal than others.” This has nothing to do with a customer’s value as a person. It has to do with bending so-called “rules” to give exceptional customers the kind of unique service they deserve.

In my many years working as a consultant and trainer with dozens … Read the rest

Ways to Keep Customers Coming Back

By

Lots of money, effort and time go into acquiring customers, but not nearly enough thought goes into keeping them coming back. Sure, there’s the occasional offer or the “We’ve missed you” discount. All too frequently, we don’t pay attention unless they’re unhappy or turn up missing. Then, we get busy and try to get them back.

Such business behavior has unintended consequences. The cable companies are an example. Customers have learned to complain and threaten to leave unless they are given concessions. And how do you feel when a company unleashes the sweet talk after they haven’t heard from you? … Read the rest

Why Sales Success Is the Exception, Not the Rule

By

To be successful in the world of selling you need to be a contrarian.

In every industry, successful salespeople are the exception, not the rule. In the insurance field, only about 20 percent of the agents who start are still agents 10 years down the road. In real estate, the average realtor sells three houses a year, and even though some may stay in the business because it’s the family’s second income, and the company allows them to, three houses a year is poverty-level income. In the corporate world, most salespeople don’t make quota and in many cases, even those … Read the rest

Is My Pay Plan Fair?

By

Question:

I sell for a living. In our pay plan, we compete with our revenue numbers from the previous year, and approximately six percent is added to the previous year’s revenue number. That becomes your goal for that particular month. We get a salary plus commission and have a stair-step commission that starts at 80 percent of our goal. The problem is there is no motivation between the salespeople due to the fact that we are competing with numbers from the year before. When we have talked to management about it, they say that if we changed the pay plan, … Read the rest

Looking to the Future

By

Concurrent with the publication of an article on the importance of succession planning in Agency Sales earlier this year, a manufacturer wondered how far he could go when it comes to asking about an agency’s future plans.

According to the manufacturer, “Thankfully, I’ve been in the position where I really haven’t had to worry about what my reps are going to do in the future because, by and large, each of the firms I work with have been more than willing to share information that pertains to how they operate now and what their future plans might be. These are … Read the rest

Delivering an Unmatched Customer Experience in the Digital Age

By

Creating highly engaged customers is forcing companies to provide their customers with a consistent experience whenever and wherever they need it — digitally.

Did you know that highly engaged customers buy 90 percent more frequently, spend 60 percent more per purchase, and have three times the annual value (compared to the average customer). That’s a huge revenue opportunity you could be taking advantage of by digitally transforming your business!

But, in order to deliver on a better customer experience, you first need to understand who this new kind of digital customer is and what they want. It’s clear that the … Read the rest

A Commissioned Sales Representative With a Contract …Who Doesn’t Have a Contract

By

A commissioned sales representative called me recently with the following situation: Beginning in 2011, the agent served his pharmaceutical company as a commissioned sales representative on an independent contractor basis, receiving from the company a Form 1099 annually. The agent had a well-written, reasonably unambiguous contract with the company entitled “Independent Sales Representative Agreement.”

The agreement included standard terms that one would expect to see in these circumstances, such as the duration of the parties’ arrangement, the economic provisions addressing the sales commission percentages payable to the agent, when sales commission payments are owing to the agent, the agent’s geographic … Read the rest

The Hedgehog and the Fox

By

In the investment world there’s usually a large chasm among stock market forecasters about the future direction of the stock market.

The “Bulls” point to the recent tax cuts, earnings and other far-off ideas emanating from their Ouija boards. The “Bears” point to the volatility, retail woes, future interest rate hikes, and political uncertainty, among other things. And again, as always, the investor is left trying to separate wheat from chaff.

With this scenario as a backdrop, I thought it would be useful to share one of my favorite fables.

The Hedgehog and the Fox was written by Sir Isaiah … Read the rest

MANA CEO Invited to Speak at AIM/R Conference

Charles CohonMANA CEO Charles Cohon is an invited speaker scheduled to be with some of the best reps in the plumbing industry in Napa, California this fall for the Association of Independent Manufacturers’ Representatives (AIM/R) 46th Annual Conference. Cohon’s presentation, The Quick and the Dead, focuses on the urgent need for reps to be agile in today’s challenging business environment.

“It’s a special treat for me to be with my friends at AIM/R,” noted Cohon, “because every AIM/R member also is a MANA member!”

This Annual Conference is “the place to be” for professional, independent business owners to learn, share, … Read the rest

NMRA Expands Full Member Benefits

The National Marine Representatives Association (NMRA) has expanded its benefit package for independent sales rep full members. Through a special collaboration, they now automatically receive membership in the Manufacturers’ Agents National Association (MANA).

For many years, NMRA has enjoyed a close working relationship with MANA and regularly offers its members access to its SalesWise business development training and coaching teleforums. The organizations frequently collaborate on projects and co-presented a past IBEX workshop.

“We want to provide our members with the best possible benefits,” said Neal Trombley, NMRA president. “This is an exciting development that promises to have a significant impact … Read the rest