This is the 20th in a number of articles serializing The Sales Force — Working With Reps by Charles Cohon, MANA’s president and CEO. The entire book may be found in the member area of MANA’s website.

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Jim brought Harold up to speed, and the two decided the next step would be to propose to Joe Troothe that a rep company be hired in one territory. Joe agreed, with one qualification: “If you have to pay commission to get incremental business, fine, but don’t give away any commission on our existing sales.”

Taking Sue Elliot’s advice, Jim picked a relatively remote territory with only a few customers so the inevitable miscues made as they hired and worked with their first rep company would not impact major accounts. The new rep territory would be in an area where June Calloway had sales responsibility, but because she was on salary the new rep wouldn’t affect her income, and so her misgivings with the new concept were easily overcome when Jim agreed that her authority over current customers would be not be undermined by the new rep. With that stipulation, she grudgingly accepted the on-site assistance in a territory she couldn’t visit often.

Jim’s search for appropriate companies to be considered as candidates to become Troothe’s first rep company started with calls to purchasing agents at Troothe’s major customers in that territory, but he didn’t get the sort of reply he’d expected. The purchasing agents were leery of having Troothe add a rep, worried that the rep’s commission would lead to a price increase. “Don’t give us a rep,” was the common theme, “give us price reductions instead.”

The response from engineers at his key accounts was exactly the opposite. The engineers regularly worked with reps, and pointed out that without an on-site presence, Troothe was missing out on being designed into new applications. “What happens,” explained one engineer “is that the manufacturers who have a local sales presence and are ‘in our face’ regularly are the ones we use for new designs. It’s so much easier to get selection assistance and the occasional sample from someone who can drop by on short notice and sit across the conference table than to arrange to bring in a person from a remote factory. We don’t necessarily design your flanges out of our existing designs, but as we introduce our new products, chances are they’re built with a flange from a manufacturer who has a local rep.”

Local distributors offered referrals to area reps, and their message was similar to the one Jim got from the engineers. Explained one distributor, “Local reps provide manufacturers with a daily presence in the territory, and often will set up sessions in our office where the rep can share his product knowledge and provide training to our inside and outside salespeople. The frequent contact we have with local rep companies gives them a preferred status over people who try to serve us from a remote location. It’s only natural that when a new opportunity presents itself that our first call tends to be to a rep salesperson we regularly see face-to-face. Plus, local reps are available on short notice to be our on-site technical resource when our outside sales force schedules a sales call that will require specialized expertise. I’ve also noticed that manufacturers with local reps get most of the new design-ins, and, as distributors, we look for the manufacturer and his rep to take primary responsibility for demand creation. Sure, we participate, but no distributor wants to do all the heavy lifting in the design-in process when we know that the purchasing department will solicit quotes from three distributors before placing an order. We can’t accept the cost of carrying the ball with engineering when all the purchasing department looks at when the order is awarded is the lowest price. We get rewarded with orders for maintaining logistical expertise — price and delivery — so we aren’t going to take the point position on demand creation — either the rep or the factory will have to take the lead in that area.”

Another distributor who recommended potential rep candidates added a different perspective: “One of the really valuable functions a local rep can perform is to police special pricing. We’re honest guys, but not every distributor is as forthright as we are. Some of them will try creative storytelling to convince the factory that they need special pricing when all they’re doing is trying to take the same manufacturer’s business away from a competing distributor who’s paying normal distributor price. Being in the territory, a rep can sniff out prevarications more effectively than someone who only knows what they’ve been told over the phone by a distributor 1,500 miles away. It makes it easier for us to maintain our high ethical standards when a local rep is around to slap the hands of distributors who try to pull a fast one.”

With such a positive response from engineers and distributors, Jim wondered if the knee-jerk reaction he’d received from purchasing agents was triggered by the way he asked the question, so he decided to try again with a different group of purchasing agents. This time, instead of asking if going to reps was a good idea, he asked which reps did the best job of serving the purchasing agents’ requirements. The change in the replies he received was dramatic. Each of the purchasing agents waxed eloquently about one or two reps who did a fantastic job taking care of that purchasing agent’s needs. This made it clear that for those purchasing agents the rep added important value to the transactions the rep touched, and that the immediate protestations made by the first group of purchasing agents probably was just concern that the rep’s commission would be added to future quotations the purchasing agent would receive.

With a number of rep referrals in hand, Jim remembered Sue Elliot’s advice on how to use one rep’s website line card to help locate potential reps in other territories. He visited her site again, made note of her lines and visited the websites of those manufacturers to find their reps in the territory Jim hoped to use as his test site. Of the six reps he’d identified as candidates in that territory, two had a line in common with Sue, and one was the rep in that territory for two of the lines Sue represented in her area.

On a whim, he called Sue to ask her about those three rep companies. Again, Sue was candid — “One of these guys is new, so I don’t know him, and I’ve only sat in the same sales meetings with the second, so I don’t know him either, but I sat on a rep council with the third guy and he’s great.”

“Rep council?” queried Jim.

“Now, Jim,” Sue teased, “did you go to the MANA website [www.MANAonline.org] like I told you to?”

“Not yet, but I planned to before I started interviewing.”

“If you want to be successful recruiting reps, you’d better know the nomenclature,” Sue replied. “A rep council is like a distributor council, except it’s usually more focused on the manufacturer’s long-term strategic plans, while distributor councils are more likely to concentrate on day-to-day tactical and logistical issues. Now for goodness sakes, go do your homework before you start interviewing!”

Jim made that effort, but perhaps not as completely as he should have. He invited the six candidates to visit the factory for a preliminary interview, but all of their replies in one way or another echoed the sentiment of Fred Richardson’s comment that Jane Goodall learned about chimpanzees by visiting them in their own environment. Without the zoological reference, each suggested that the only way Jim could get enough information about a rep company to choose it as a long-term rep partner would be to meet its people and see its operation. At least subconsciously, Jim acknowledged that he had been trying to shortcut the rep selection process, thinking that he’d hire whichever company looked best, and if that company turned out to be a bad choice, he’d switch to another until he found one that was successful. None of these reps wanted to make the investment in starting up with a new line under those circumstances — one commented that he didn’t interview with principals who don’t visit the rep’s office.

“Some guys want to interview six reps in one day so they do it in their hotel room or at an airport. If you don’t make the investment in time and effort to visit each rep, you aren’t taking the rep search process seriously. And if you don’t have that investment in the choice you made, you won’t have a personal stake in making your choice work. If I’m offered the line, I’ll want to visit the factory, but if you hire me based on an hour and half interview in an airport lounge, you won’t have made a personal commitment to our mutual success — and I won’t waste my time trying to enter into a long-term partnership with a company that manages its reps like a game of musical chairs.”

Having decided he’d need to visit the territory to conduct his rep search, Jim started with preliminary phone interviews to winnow his choices down to a manageable number. He didn’t want reps to decide whether or not to interview for the line based on the commission Troothe would end up paying on existing business, so he was coy when reps asked about Troothe’s current sales volume. One rep dropped out when Jim insisted that two large accounts, which were 50 percent of that area’s sales, would not be included in the new rep’s territory. Another politely declined to be interviewed, but added, “I can’t devote the time to be a guinea pig for a company that’s never worked with reps. The first rep company hired always ends up regretting that it didn’t let some other rep break in the new principal.”

When the phone interviews were completed, he had three rep companies left that he’d need to see in person.

To be continued next month.

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