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Point to a difference in cultures or an unfamiliarity with U.S. business practices, but whatever the case, an impediment to good relations developed when an overseas manufacturer began working with an independent manufacturers’ rep.
It was obviously a positive that the manufacturer was aware of the importance of communicating shared expectations and for the need of a written contract that insured the best interests of both parties. On the negative side, however, was the principal’s apparent lack of knowledge of how to establish, nurture and maintain good personal relations between his company (including his factory people) and his rep.
When the manufacturer introduced this subject in a conversation with a non-competing U.S. manufacturer, the U.S. company advised the following: “Whether it’s a brand-new relationship or one that’s been ongoing for years, it’s always important that both sides travel the extra mile when it comes to regularly revisiting the terms of the relationship through the business cycle. This should be done because just as anything else in life, situations and people change. In any strong and lasting relationship, all parties have to pay close attention, re-evaluate and constantly ask questions concerning the relationship. Communicate with regularity and be sure to anticipate and answer all questions concerning what the relationship is all about.”
Rep Route Is Ideal for This Manufacturer
A fairly small, single-product manufacturer recently shared his rationale for working with independent manufacturers’ reps. According to the manufacturer, “We’re only 12 years old, but we’ve been able to boast of a five to six percent annual growth rate. We’ve finally reached the point, however, that we’re looking to move to the national stage and our thinking is that it would be cost prohibitive to tackle that task with a direct sales force. We’ve determined that it would be extremely difficult to devote sufficient funds to provide in-the-field support to a network of full-time salespeople. In addition, my personal experience has been that if I was able to get at least five to 10 minutes of a purchasing agent’s time, I’d count myself as being lucky. To achieve the impact we’re looking for, we need more feet and time on the street.
“The first thing we did was to contact three independent rep firms with the goal of exploring what they could do for us. Right out of the box these firms provided us with the market intelligence and relationships with buyers and potential buyers that we know would take months for us to develop on our own.
“We were smart enough ahead of time to know that a direct salesperson would only get minimal time with purchasing decision-makers. From day one, the reps we were working with reported to us that they were gaining plenty of face time — certainly enough to fully present our product — to customers and prospects. I have to assume that their ability to garner as much time as they do is owing to the fact that they represent several lines, and because of their contacts they have plenty of opportunities to meet customers’ needs.”
It’s still a little early in the game, but this manufacturer maintains that “Just based on the number of questions we’re fielding on our reps’ behalf, we’re certainly getting a lot more exposure than we would have with any other means of going to market.”
Maximizing the Reps’ Performance
When Agency Sales asked a manufacturer recently what he does in order to maximize his reps’ performance in the field, he offered the following: “I guess I’d say my starting point in my relationship with reps was joining MANA. From there, I read what the association recommended and attended a manufacturers seminar. Then I went on to try something new for our company. I hired one of our best rep performers as a consultant. I know I could have put together a rep council, but I decided upon this approach because this rep — in addition to always nailing his numbers and being a terrific communicator — has never held back when he has an observation or suggestion on how to better our relationship and our performance in the field.
“When he started as our consultant, some of our people were a bit unnerved. It wasn’t unusual that we’d hear the question: ‘This guy is working for us. Why do we need him inside telling us how to run the business?’
“My response to that was I didn’t invite him in to tell us how to run the business. My goal, on the other hand, was to have him assist us in creating a consistent plan for working with reps. I’d be shortchanging us and him if I described the result of this plan as ‘good’ or ‘satisfactory.’ Actually, we wound up hitting a homerun and, in fact, I’d advise other manufacturers to follow our path if they feel they can locate the right rep to work with.”
The Value of the Rep as a Merchandiser
The phrase “Jack of all trades, master of none” came to mind when a principal recently introduced the subject of merchandising at an industry meeting. According to the manufacturer, “It’s completely unreasonable for me to expect that all my reps are able merchandisers. In general, the reps I work with possess any number of qualities that truly add value to our relationship. There are, however, several that I work with that exhibit a merchandising talent that allows them to stand apart from the rest.
“I value the ability of my reps to merchandise our products and that’s something that’s high on my list when evaluating reps. Generally, I check with my distributor to determine whom they would recommend. Then I visit the distributor’s counter areas to see for myself if their rep does a good job. Finally, when I get to the interview stage with a rep, I’ve got an entire list of merchandising questions/problems that I pose. I’ve followed this process for the last several years and I haven’t yet made a decision that I regret.”
Learning What Reps Want/Need
There’s so much to learn during down times at industry meetings. It’s during those unofficial networking sessions where principals and reps let their hair down that you can learn a great deal about relationships. For instance, here’s how one manufacturer described his view of the rep-manufacturer relationship: “It’s not unusual for me to hear complaints from some manufacturer friends concerning the reps they work with. Here’s the real problem — they fail to look at the relationship from the rep’s side. All they really do is consider their personal needs. They’ve got to familiarize themselves with what the reps’ needs are before they can really work smoothly as a team. What I’m talking about here is the ability to have a meeting of the minds on all subjects whether that means factory support, advertising, commissions, and several other questions that they seldom address. As an example, after years of experience, I’ve made it a habit to ask a prospective rep where he wants his or her agency to be in five or 10 years. How they answer that question lets me know something about their needs and goals. In addition, it tells me something about how they’re looking at us as an integral part of their plans.
“After I determine how we fit into their future plans, then I have a lot more to go on when making decisions on which agency I’ll ultimately choose to work with. At the same time that doesn’t mean that all reps have to have lofty goals for us to be willing to appoint them. For example, what if a territory is small and doesn’t really have the potential to grow dramatically. If the rep lets me know that he wants his agency to remain at the same level it is now in five years, that’s not all bad. With all the other variables being equal, I’d probably go to market with them. On the other hand, if a rep in a rapidly expanding territory lets me know the same thing, then I might be less inclined to look at them favorably.”
Implementing a Novel Approach
A second manufacturer who participated in the previous conversation took note of the mention of having a rep in an expanding territory. Taking that as a starting point, he noted that he had recently been successful in signing with reps in his more productive territories. His next step was to make an impact in the less-promising areas. Here was his approach: “When we started to appoint reps for our less productive areas, none of them worked out all that well. It wasn’t necessarily their fault; there just wasn’t enough business to sustain a rep’s interest and enthusiasm. However, we did notice that many of these territories were located adjacent to our major territories that were being served very well by existing reps. We decided to offer the territories to the reps next door. At the beginning, most of them weren’t all that interested. They already knew what the potential was and what it would cost to get the business. But we moved on by offering them a slightly better incentive to make up for the increased expense of getting the business in the poorer performing territory. Once we did that, they came on board. This has been productive for us and it has helped the agents get additional lines in those territories that are far more productive than our line will ever be.”
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