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 the agencies that believe in — if not insist upon — joint planning, yearly evaluations, goal setting, etc. The others, and honestly speaking it’s a relatively small number, actually get annoyed at the fact that I want to know how they plan to continue our relationship into the future. The question remains, what can I do?”

Obviously, no one answer fits all, but MANA and this publication have long advocated that the strength of any relationship resides on the shoulders of communication and planning. Just as the rep needs to know how the manufacturer plans to address the future, so too does the manufacturer need details that will impact how he or she will be able to meet the needs of a specific territory.

One Manufacturer’s View of House Accounts

During a rep association meeting earlier this year, a manufacturer was asked by a rep — not one he currently works with — what his thoughts were on the subject of house accounts. In response, the manufacturer offered the following: “Here’s what we generally do when the subject of house accounts rears its head. Whenever we had a house account in existence before hiring a rep, the rep was fully informed. He or she was also fully made aware that the house account could/would become theirs eventually (after they prove themselves) — with a reduced commission that was necessitated by the history of the account. Generally, with house accounts the margins are exceedingly low to begin with. Our goal with the rep was to generate new business primarily and maintain the ‘house’ account secondarily. If he or she could add new business to the ‘house’ account, then a full commission (hopefully) could be paid. We’ve been working this way for years with our reps, and haven’t encountered any problems.”

Getting Trade Show Participation

It’s not unheard of to hear manufacturers note the difficulty they encounter in getting some of their reps to willingly participate in trade shows. Complaints run the gamut from the expense involved to the loss of time in the territory. Here’s one manufacturer’s response to the quandary: “I’m not sure I can really blame a rep for his reluctance to attend these shows. In all honesty, we’ve got to recognize the fact that it’s an imposition to ask the rep to leave his business and his territory for a day or more to help out at a trade show. You can’t blame him for being reluctant to leave the activities that put the food on his table. That’s why I’m always sure to keep trade show attendance requests to a minimum. At the same time, I share the request among as many reps as possible. I also make it a point to be there before the rep gets there and stay after he’s done. I participate in the set-up and tear-down of the booth. I make sure all his meals and expenses are covered and, perhaps most important, I make sure the gets any and all qualified leads from the show.

“The bottom line is that it’s my job to make his attendance as beneficial and painless as possible. In my years of experience in working with reps this way, there’s been little reluctance on their part to pitch in when I need the help.”

Is it Worth the Effort?

An article earlier this year in Agency Sales on the subject of line profitability stirred one rep to contact this publication with his thoughts on his efforts to calculate how much time, effort and money he spends when it comes to servicing a given line. This rep calculates how many tasks he performs for the manufacturing line in a month, multiplies that by 12 and makes a determination as to whether representing the line is profitable.

It’s not unusual that when this process is described to manufacturers, they express surprise. Typical of this is what one manufacturer offered: “I’m positive that I’m a perfect fit for my reps. I complement their other lines and even though I’m not that big or even sit high on their line cards, they’re all glad to have me.”

It took this manufacturer completely by surprise when two of his reps resigned the line because they had determined their return on investment wasn’t what it needed to be. The bottom line is that these reps felt they’d be better off representing fewer lines. That’s why manufacturers should do all they can to ensure they’re the rep’s emotional favorite and continue to be worth the financial effort to work with them.

Softening the blow of being terminated by his reps, however, the manufacturer said that both rep firms (both of which were members of MANA) went out of their way to refer the manufacturer to other reps in their territory that they felt would make a good fit.

Growing Apart — the Right Way

An interesting outcome was described when two manufacturers got together earlier this summer. One of the manufacturers described how he arrived at a perfectly professional parting of the ways with a rep firm he had been working with for years. According to the manufacturer, “My concern with the agency stemmed from the fact I saw him grow to the point where I wasn’t sure he was spending as much time on my line as I felt he should. I know part of his reasoning was that I’m a small manufacturer, but I still need attention.”

When the situation reached the point where a conversation between manufacturer and rep was called for, they both agreed that perhaps a parting of the ways was called for. “We were both right and changing circumstances called for a change in our business relationship. There were no were no hard feelings involved. I went on to appoint a smaller agency that I felt would give me the time and attention that I needed, and the agency went on to contract with a much larger manufacturer. Now that all is said and done, I’d say things worked out for the best.”

Maximizing the Training Experience

No one size fits all, especially when it comes to finding the most effective/efficient way to train reps. Having said that, one manufacturer has learned that when he makes the effort to pay the rep’s way for training and schedules the training for a time that is the least intrusive for the rep, his chances for success increase measurably.

“Here’s how we approach our reps,” explained the manufacturer. When we have something new coming out that we feel the rep has to be brought up to speed on, we’ll contact him well in advance and provide him with a lot of options when it comes to scheduling. We know it’s always going to be a problem to take the rep out of his territory and away from his customers. That’s why we usually let him call the shots on scheduling.

“On top of that, we’ll pay for the rep’s expenses to attend the training whether it’s to a job site, our factory or some other centrally located venue. We’ll also make it a point not to do this too often. If we overdo the training, the rep will begin to question how important something really is. And, once again, we’re sensitive to the need for him to stay in his territory.”

There’s Nothing Like a “Thank-You”

“I had nothing else in mind than to thank one of our longest-standing reps when I called him one day,” explained a manufacturer. “All I wanted to do was to thank him for the excellent job he had been doing for years. It wasn’t that he had done anything specific recently, it was just an accumulation of things and my feeling was that the time was right for me to reach out to him. I began the phone call by inquiring about him and his family and I could tell he was getting a little apprehensive. Then I just came out and said what was on my mind when it came to his professionalism and his top-flight performance for any number of years.”

The manufacturer continued that he wanted nothing in return other than the satisfaction of knowing it was time to thank someone, and he did it. “The next time I saw this rep at our national sales meeting I couldn’t believe the reception I got. He mentioned to everyone in earshot how unexpected the call was and it just showed how much he was appreciated. The whole experience made me feel like a million dollars.”

Realigning Reasons for Working With Reps

When a manufacturer communicated to one of his non-competitive peers that the major reason for his recent move from a direct to an outsourced (i.e., rep) sales force, was that he could no longer afford the direct sales approach, his manufacturer friend urged him to consider some other more important reasons for the move.

According to the second manufacturer, “Sure you want to save money and get as much bang for your buck as you can, but there’s more to be realized from a move to reps. For instance:

• “Reps know the territory much better and their roots are deeper in the business community than any direct salesperson’s ever will be.”
• “Obviously, you’re looking for improvement in market share. With that as a given, there’s no one better than a rep who knows the territory well, to improve your market position.”
• “If you’ve done things correctly, the reps you’ve aligned yourself with already enjoy great relationships in the territory. That’s something that would take a direct guy months to achieve.”
• “Finally comes the cost saving and the ‘bang for the buck’ that you were hoping for.”

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