Elsewhere in this issue of Agency Sales magazine, a manufacturer describes why and how he continues to work with reps as he has for the entire 24-year history of his company.

According to the manufacturer, “My wife and I own and run the company. While we do have some direct sales personnel, we’ve learned over the years of the many benefits that come with working with independent reps. One of those major benefits is that since we already have some business in the territories that we want to sell into, the fact is reps don’t really cost us anything. If and when they sell, we pay them a commission — and I might add, it’s a fairly healthy commission. Really, it’s a win‑win proposition for us.”

Adding to his favorable comments about working with representatives, he continued with some words that covered his thoughts on writing a fairly hefty commission check for one of his reps: “In just one month, one of our reps sold what amounted to about one-third of his annual sales. And, usually his annual sales are pretty good. What happened was that a number of major projects came through all at the same time. I’d be lying if I told you this didn’t get my — and my accountant’s — attention, especially since I wrote him a commission check for more than $200,000.

“When all things were considered, however, I wrote that check willingly because I’ve always been of the opinion that the more the rep sells, the more I’m selling. And the reason I signed him on to sell my line is to do just that — sell. It would be an understatement to say that’s exactly what he’s been doing for me — for years — selling.

“My only advice to him is to keep on keeping on. If he does that then I’ll keep on signing those sizable checks — with a smile on my face.”

There’s More Than Just Getting the Order

When the comment was made that the rep’s job is simply to get the order and then follow up, a manufacturer with a lengthy history of working with reps responded, “In my experience, which goes back more than 45 years, that’s hardly the case — at least with the reps I’ve worked with.

“What it all comes down to is the old saying, ‘Out of sight, out of mind.’ What that means in this case is that if the manufacturer doesn’t see or hear from the rep, he just assumes that the rep isn’t doing anything and is just there to collect commissions.

“In all fairness — at least in my opinion — part of the blame here lies with the rep. The rep ought to be doing all that he can to remind principals of his constant presence in the field and all that he does to service customers. This can be done in a number of ways, including communications to the manufacturer on a regular basis and having customers provide documentation of the services that the rep provides.”

The manufacturer continued, however, by not letting his manufacturing peers off the hook: “Simply for the fact a manufacturer has committed to the rep way of going to market, he must make an effort to keep himself apprised of the myriad services that his reps provide — even if the reps don’t constantly remind the principals of what they’re doing in the field.”

There’s More Than Just Following Up

A notable follow-up to the previous item is seen in the fact there’s much more to the relationship between independent manufacturers’ representatives and their principals than the former just paying the latter accurately and on time. Truth be told, according to one manufacturer who boasts of a long tenure with a number of agencies, “There’s much more that we’ve been sure to include in the consideration of what constitutes a relationship. Among the other variables we’ve been sure to include in our relationship are these:

• Adopting a philosophy where we believe our agents are truly independent.
• Providing prompt and accurate communication on all matters of importance.
• Immediate attention to requests, quotes, samples, etc.
• We consider them as true professionals and members of our corporate family. As a result, we’re always seeking their advice and counsel.
• We’re firm believers in the value of factory visits and insist they be conducted on an annual basis.”

Finding the Right Rep

A manufacturer voiced dissatisfaction in his experience of working with some reps. According to the manufacturer, “After achieving the coverage we were seeking in our major markets, we decided to expand into some less-productive territories. The problem was we had difficulty finding agents to work those areas. We signed on a number of them but none really worked to our satisfaction. I’ve got to admit that it really wasn’t all their fault. The problem was there just wasn’t enough business for a rep to spend a great deal of time on our line. What we did, however, was to offer the territories to reps who were already working in adjoining territories. At first, the majority of them weren’t all that interested. While they were aware what the potential — or lack thereof — was they also knew what it would take to get the business. What we did then, however, was to offer a better incentive to make up for the increased expense of getting the business in the poorer-performing territories, and they all accepted our offer. This has been successful for us and helped the agents get additional lines in those territories that are more productive than our line will ever be. I’m safe in saying this has worked out for all of us.”

Rethinking a Decision

After more than three decades of working with a hybrid of direct and independent sales reps, one manufacturer raised the possibility of eliminating its reps. “Here’s what a segment of management was thinking,” according to a company executive. “Some of the in-house thinking was that since we already had sales managers in place, why couldn’t we eliminate our reps and have the sales managers handle that business?

“It didn’t take me long to determine — and then explain to the rest of management — that if we eliminated our reps, in the southeast, for example, we’d immediately be facing a major concern. In that territory alone, we had in the neighborhood of $6 million in annual sales. At that time the territory was covered by four agencies. If we terminated them, we’d then be faced with the task of having one person — a sales manager — tasked with knocking on all the doors in those states in order to search, get and maintain new business. That’s a daunting task.”

She continued by asking, “What about the selling opportunities that would be lost, not to mention those opportunities that we’d never ever hear about? After several years of working with reps, I was certainly aware of the fact that it’s the rep who has the relationships in the territory. And, because the rep has those relationships, he’s constantly on the lookout for opportunities to develop future sales. Without reps, we easily would have been missing who knows how much more in future sales. If we had sales managers in place, I’d guarantee they’d spend the majority of their time just maintaining and not growing our business.”

She concluded by reporting that “Thankfully we made the decision to stay with our reps and it looks like it’s going to be that way for the future.”

Knowing the Territory

When one national sales manager recalled his experiences in working extensively with a network of outsourced sales reps, one thought that constantly remained on the surface was recognizing the importance of networking and the value in accepting the advice of industry peers. According to the manufacturer, “We were just new to working with reps, having had a history of dealing with a direct sales force. I sought out a number of non-competitive friends that I would regularly run into at industry meetings. They all had more experience that I when it came to working with reps. One thing they constantly impressed upon me was the importance of paying attention to the territory in which I was assigning a new rep.”

He explained, “The key factor I had to come to terms with was being sure that I gave the rep enough territory so that he had the real potential to make enough income so that he would devote the effort required for my line. This required some careful and thorough analysis on my part, not to mention communication with the rep before deciding on what territory he was to cover.

“I can look back now at several years’ experience working exclusively with reps, and because of our two-way communication, there have been little or no problems in this area.”

Help for Customers

While admitting he knew all of the benefits independent reps offer to their principals, a manufacturer was quick to add that he was well aware of what reps did for their and the reps’ customers. “Reps have established, stable relations, and already know the corporate cultures. On top of that they offer a level of efficiency and time savings that accompanies their multi-line sales calls. They’re also able to bridge inter-departmental communication gaps.”

He finished by saying, “Sure, we’re all aware of what the reps do, but reminding ourselves on a regular basis of what they do for our customers is a great practice.”

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