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A manufacturer recently related to Agency Sales magazine how when one of his best performing reps erred in a personnel decision, a potentially disastrous situation was quickly defused.

Here’s how he described what happened: “A one-man operation that I’d describe as one of our very best reps had reached a growth point where he had to hire another rep to take some of the load off himself. Unfortunately, he made the wrong decision. From the first day the new rep started working, there was a falloff in performance from the rep firm. We noticed it right away when we didn’t receive the same level of attention to detail that we always enjoyed. It took the firm a good three months before they let the new guy go. During that period of time, a good deal of damage had been done to our relationship.

“Rather than let things go and have relations deteriorate even further, I have to give the rep credit for one day making a call to me and owning up to his error in judgment. I was taken aback when he said ‘I admit — I blew it. I made a mistake. I admit it and want to start over.’

“Just the fact that he realized how important the relationship was made an impression on me. It’s been a good six months now, and there have been no problems. Things are as good as they’ve ever been. I’m glad I never gave up on him.”

Overuse of Buzzwords

“I’m tired of buzzwords and politically correct phrases when it comes to what reps bring to the table.” That was the critical beginning of a conversation a manufacturer engaged in when he was discussing principal-rep relations. His critical view was tempered, however, as he continued to describe the positive experience he had with one of his reps.

“One buzzword that never seems to go away is ‘value-add,’ especially as it applies to independent manufacturers’ reps. Too often when I ask a rep what makes him different from the competition, all he’ll say in response is ‘My value-add.’ Come on, give me a break. Generally when I hear that, I take a breath to calm myself and then ask for a definition of ‘value-add.’ Many times what I get in return are just words — no real facts.”

That’s why when one of his reps introduced the concept of a monthly strategic sales analysis, he was really impressed. “This concept emanated from one of my very best reps — so I shouldn’t have been surprised. At the end of the process, however, I’d say I was more gratified than anything else. I was gratified and satisfied that I had made the right decision with this rep several years ago and I was pleased that he offered the measurements that were needed to convince me that he was doing more than was expected in the territory. He put some meat on the bones of the phrase ‘value-add.’”

Ideal Secondary Rep Attributes

Almost two decades ago, Harry Novick, an expert and a keen observer of the independent sales rep profession authored Understanding the Outsourced Sales Professional for MANA. As expected in that work, Novick emphasized the attributes that an ideal rep should provide for his principals. At the same time, he followed up by pointing to several secondary characteristics that ought to always head the list of considerations when manufacturers are looking for representation.

According to Novick, some of those secondary characteristics were (and remain today) key to the relationship:

• Successorship Planning — To assure continuity of the rep firm, owners should have a successorship plan in place — and be willing to share that plan with their principals. Many reps choose not to provide for continuity of their firm, but prefer just to start working at a reduced pace, then retire. That’s not desirable — or acceptable for principals or customers.
• Product Experience — Rep sales personnel should have a certain level of sales experience with the manufacturer’s type of products. However, this is entirely secondary to the need that the rep personnel have for sound experience selling the manufacturer’s targeted customers with at least compatible product lines.
• Income Position — Ideally a manufacturer should occupy a strong economic positon with the rep firm as this position defines economic importance of the manufacturer to the rep. The manufacturer does not have to be the top income producer, but certainly should strive to be within the top three or four within a reasonable period of time, presuming the manufacturer had almost no position in the territory prior to recruiting the rep.
• A Balance of Headcount and Principals Within the Trading Areas — Ideally the rep firm should have ample headcount compared to the number and size of principals represented.
• Tenure of the Firm — A rep firm that has been in business for 10, 15 or more years develops an excellent reputation in the area. However, it’s important to keep in mind that this is of secondary importance to the strength of the individuals who are selling in the firm. As an example, a rep may be newly formed but with five or six top sales personnel who resigned from another rep to start their new firm. The firm itself does not have an established name, but the sales personnel do.

Benefitting From a Change

Here’s what happened after a relatively small manufacturer made a change from its direct sales force to reps. As the manufacturer explained: “We spent several futile months attempting to gain a foothold with a number of fairly large corporate prospects. And, when I say the word ‘futile,’ I’m not exaggerating. Finally, we bit the bullet and made the move to an independent sales force. At the outset, I’ll say our direct salespeople were very professional and worked hard, but the result just didn’t justify the effort. Once we made the move to reps, here’s what we experienced almost immediately:

• “When all we had were our direct people in the field, they were our only presence in the territory. Many of the reps that we subsequently decided to work with have two or more people in the field. This provided us with the needed luxury of having a sales force in place that makes calls much more frequently than our direct people ever could do.”
• “Reps also immediately got their feet in the door because they had existing relationships with the large customers that we were looking to have an impact with. In fact, not only did they have relationships, but they had already been selling their other product lines to these customers.”

Two Key Ingredients

A thirst for knowledge and a continued willingness to visit the factory are two ingredients that one manufacturer looks for in a prospective rep. According to the manufacturer, “We’re hardly the largest manufacturer in our product line. As a result, we’re very careful to be sure that when we choose a rep, we’re going to get the biggest bang for our buck. One of the ways we get that bang is by looking for the rep who’s got a real appetite for knowledge. And when I use the word “knowledge,” I’m not only referring to their knowledge of what’s going on with their customers and in their territory, but also in terms of improving their sales skills. Then there’s the matter of keeping up to speed with the technological tools that we use to conduct business today. I can’t count the number of times we’ve picked up tips on how better to communicate with other reps.”

Continuing on to the subject of scheduling regular visits to the manufacturer’s factory, he noted that the rep who takes the initiative to complete these visits really shows that they’re serious about the relationship. “We even have one rep who schedules the next visit as soon as he’s completed the last trip here. He maintains that this allows him to better keep up on our new product developments, and renew contacts with factory personnel with whom he is in constant touch during the year. In addition, since he’s got plenty of time alone with our management team, he always brings matters of concern to our attention during his day-and-a-half visits. We get more done in that short period of time than we ever would by visiting him in the field.”

The Value of Follow-Up

Here’s how one manufacturer describes the valuable contributions one of his reps made to the sales effort. “I started working with one rep firm in a territory where we had very little existing business. As a result, just about everything that we developed was new business. When business began picking up steam, and we really began making an impression, the rep made a suggestion that proved to be very effective. Because our goal was to establish lasting relationships with these customers and to become the one they think of when they need the product we provide, he urged us to take extra care. Once again, per the rep’s suggestion, when new orders came in, I had them singled out for special attention. I sent a personal note to the customer acknowledging their first order, thanking them for the business and asking them to submit any comments relative to how we could improve our service. After the order is received, we conduct a strong follow-up, all with the goal of securing us in the minds of the customer.”

This manufacturer maintains that this process has served him well even in the face of strong price competitvon.

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