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Here’s how one manufacturer described his company’s experience with rep councils:

“We have 22 reps on our team. Early on we started a rep council and learned that it was a very effective way to build the cooperative links that have made us successful. However, we soon discovered that the work of the rep council was diverse and often time-consuming. It seemed to us that we were often asking the council members to do too much for us, although none of them ever complained. However, we thought a lot about this and came up with the idea of having two rep councils. Each council is charged with totally different responsibilities. One deals mainly with sales and marketing issues and the other deals primarily with corporate, financial, and often technical issues. Each council shares its reports with the other and with all the agents, of course. Each council meets separately in June and we meet collectively in December. Each meeting lasts only two days, one of them being a Saturday, so the travel isn’t a burden for the members. Others with a large number of reps and a number of complex issues may want to consider going this very same route.”

Defining the Rep-Principal Honeymoon Period

Recently a manufacturer explained that the long-term success of the manufacturer-agency relationship depends almost exclusively on what happens during the first year. And he had examples to back up his theory. According to the manufacturer, “We have used reps for almost two decades. I have been with the company for 22 years and was responsible for shifting to reps, so I’ve been able to observe the relationships at close range. I discovered that the first year is critical. During the first few months, the relationship that’s going to last takes on new value-added characteristics that neither thought of when they first got together. In other words, each discovers things they like about each other that were not apparent right away. The things that are discovered are usually not related to individuals, but to specific characteristics of the agency, such as the benefits derived from contacts made for some of the agency’s other principals. The next few months is the time when the personal relationships are either strengthened or begin to wither. It’s the getting-to-know-you phase. After about six months, there is a sort of breaking away phase when the agency tends to lean less and less on the manufacturer and begins spreading its own wings with the product line. The last few months of that first year seem to set the tone for the way the relationship is going to be as long as the agency and the manufacturer stay together. It’s at this point where you are either comfortable with the relationship or know that it will be a comfortable relationship soon, or that you know that it’s time to cut your losses. I should point out that it’s at this point that the manufacturer should loosen the reins on the agent and allow them to fly, to do what they can do best for you. If you hold on too long, or the agency tries to depend on you too heavily, then you will know there might be problems.” He concluded by noting, “As long as you treat your agents as business partners and not employees, the chances are that you will not only have a good honeymoon, but that you will have a long and happy marriage.”

Making the Successful Move to Reps

Here’s how one manufacturer describes how his company navigated a move from a direct to an outsourced sales force. “A little over two years ago our company was purchased by a larger company. The new owners quickly let us know that they felt the best way to impact the markets we served was by making a change from a direct to a rep sales force. My first impression was ‘easier said than done.’ After all, we had been selling direct with our own sales force for close to 20 years. We were informed that we had to have the independent agency team in place within a 12-month period. That was a tough order, but the way we did it might be of some interest to others faced with a similar situation.

“First, we informed our key salespeople that we should support them while they established themselves as our independent agents. Only three took the offer, but it was enough for us to get the program started.

“Since none of the three had sales agency experience, we had to see that they got it in a hurry. We did this by appointing our first agency in a territory that was not going to be covered by any of the three. The deal we made with the agent we appointed was that he was to serve as the training ground for our three former direct salespeople. We agreed to pay him a consulting fee for which he agreed to take each of the three, individually, for six weeks of intensive and on-the-job training. Our former salespeople were skilled salespeople, but they had to learn the basics of working independently, which they got on the fly with our first agent.

“This approach worked for us. We did, of course, have to appoint other agents in territories that might have been covered by our former salespeople, had they stayed. But we met our new owners’ goals and now have a smoothly running independent sales organization.”

Dealing With a Downsized Agency

When a multi-person agency makes the move to downsize, what is the principal supposed to do? That question was answered by a manufacturer that reported one of his agencies went from having two people on the road full time to being a solo operation. It seems that the agent’s other principals had suffered serious losses and had downsized themselves. The manufacturer who related this story was the agent’s main principal, but the principal felt that just one person in a rather large territory wasn’t going to give him the coverage he had been used to. The agent agreed, but was unable to hire another person to continue the extensive coverage. Both wanted to continue to work together so they agreed that the agent would either give back a portion of the territory or appoint a sub-rep. The agent opted for the sub-rep route and all seems to be fine.

Appreciating Rep Criticism

When a rep took the incentive to politely critique his principal’s communication style, here was the principal’s reaction: “One of my agents, who also happens to be a long-standing and very good friend, let me know that my memos to him were too long-winded. He maintained that it took me too long to get to the point. It was all done in a very friendly manner. He continued that he wanted to help me since the others agents probably had the same complaint, but were reluctant to say anything about my communications to them. He then sent me one-sentence summaries of longer messages I had sent him. He told me to continue to write the way I had been writing but then to do the one or two-sentence summary trick and see how quickly I could get to the point. It hit me immediately — his approach worked. I would have written two or three pages a few months ago to tell you all this.”

A Novel Approach to Staff Appraisals

In many larger companies performance appraisals of staff are conducted routinely. However, these appraisals are most often completed by human resource people who have little or no direct knowledge of the day-to-day work done by the people that they evaluate, or by the department managers who often only see one side of the equation. A marketing vp reported that when he does his annual appraisals he seeks input from all of his reps.

Here’s how he gets the job done — he asks the reps all the same questions about each of his people who have direct contact with the reps and uses the information to shore up some flagging efforts and to justify rewards, such as promotions, for those who are doing outstanding jobs.

He reported that his goal is to find out what’s working best and to see that all of his people perform outstanding work with his reps. “When I first started this program a few years ago, my staff was wary of it. They were afraid of the worst. They quickly realized that the goal was to build the team, not to punish. Now, they actually look forward to the input we get from reps. As part of our overall compensation program, all our marketing people get bonuses based on the total productivity of all the people. As a result, they have a vested interest in the process and really work well as a team.”

Team-Building Tips

Here’s the approach one manufacturer took when he went about building his outsourced independent rep network: “To begin with I look for people who are systematic and organized more than looking for the typical outgoing type of salesperson. When I think that the typical rep spends most of his working day calling on customers and has to complete all his paperwork at night and on weekends, I want people who are able to deal with this kind of life. While I discovered early on that the really outgoing kind of salesperson did bring us good business, the administrative problems that came with these people were often a nightmare. The people who have been successful for us are highly organized, outgoing enough that they look forward to making sales, and they see the overall picture, not just bringing those big dramatic orders.

“Don’t misunderstand, we — just like everyone else — want the big and dramatic orders; but a great deal of detail often comes with these orders that these people don’t necessarily like to handle. Remember, this is just my opinion. I’m sure that there are others who are able to ride herd on a team of dynamic go-getters and get the same results.”

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