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If there’s any concern that reps regularly have, it’s the danger that accompanies becoming too successful.

The typical scenario goes this way: a rep has grown business with one large customer well beyond expectations. As a result, the manufacturer’s attention is drawn to the fact that he’s writing very large commission checks to the rep on a regular basis. While on the one hand the rep may appreciate this situation, on the other hand, he’s aware of the fact that the manufacturer may decide to remove him from that account and replace him with a direct salesperson.

In response to that concern, one manufacturer volunteered how a few of his reps have headed off this scenario. “I’ve had reps come to me and say they’re well aware that some of their business with large accounts is recurring business and not new business. As a result, they don’t have as much to do with the account as they would if it was new. They’ve negotiated with me in some cases to lower commissions on such an account, with the understanding that they will receive a higher-than-normal commission for new business they develop in the territory.”

He continued that this process accomplishes a couple of important goals. “First, with the recurring business, I know they are still there to service the account, and that’s especially important because they are the ones who established the relationship in the first place. Second, I’m more than willing to pay a higher commission for new business, because even though I pay out more, I’m making more at the same time. It’s a win-win for both of us.”

No Problem With Paying More

A logical follow-up to the previous item took place earlier this year when a rep reported that the following conversation took place during his virtual interview with a prospective principal: “During the course of the interview, the rep asked “What is your company’s position when the rep’s monthly commission check winds up being larger than your own? Without skipping a beat, the rep reports the manufacturer said “I’ve got absolutely no problem with that at all. If he’s making more, then I know I’m making more. Besides, have you ever heard of a manufacturer going out of business because the commissions it paid were too high?”

Deflecting the Praise

Over the years when interviewing principals as to why they chose to go to market with reps, Agency Sales has asked the question “Do you consider yourself smarter than the competition for having made that decision?” Overwhelmingly, manufacturers deflect any sort of praise and instead answer something along the lines of “I think it’s my reps that make me look good,” or “Looking at the bottom line, it’s really a no-brainer.” And finally, one of our favorite responses is, “Reps are simply team players that do the job for us. Otherwise, we wouldn’t be using them.”

The Value of Training

Historically reps and their principals agree that reps want and need training — and the more the better. Here’s how one manufacturer states his views on the rigorous training regimen it has established with its reps. “What I’d call our standard operating procedure when it comes to training for new and existing agencies is something like the following. We regularly offer field support via our application engineers on a monthly or annual basis. The type of training support we provide is all based on what our reps tell us that they need. Then, to complement that effort, on a quarterly basis, we provide a hands-on product training session at our headquarters location. The sessions generally comprise no more than 15 reps who spend two days reviewing our operations, getting reacquainted with our engineering expertise, and they even spend a small portion of their time reviewing our sales and marketing criteria. These sessions are conducted at the plant, and over the period of two years we’ll have our entire rep network cycled through here.”

While the manufacturer touts this approach — what do his reps think? According to one of his reps, “There have been some occasions in the past, either with a new product or a new application for an existing product, that we had a need for new, updated information. The manufacturer moved fast enough to help us, and their efforts made a lasting impression on our customers. They really got the idea that we and the manufacturer were interested in a lot more than just selling them more products.”

One of the manufacturer’s newer reps added, “I wish this approach was employed by my other principals. Since we’ve been to the plant and established strong relationships with just about everyone there, I don’t think we’ll ever be surprised by something they do. They’ve continually shown us that they’re fully committed to keep us up to speed with all of their company’s programs.”

Why Preparation Is Critical

It goes without saying that the manufacturer has to be prepared for any and all questions in the run up to a prospective rep interview. But, not only should the manufacturer be prepared, so too should the rep. And, the level of the rep’s preparation should be considered as you ultimately make your decision.

An industry consultant emphasized that there are some reps who are basically unprepared to answer the questions that have to be answered during the interview process. “One thing you as a manufacturer must remember is that the rep must possess a belief that there’s nothing more important than selling himself to you. He can’t expect to be hired just because he makes a good appearance and handles himself well. You’re looking for much more than a pretty face. The person you hire is going to be your eyes and ears in the field. He is ultimately you in the eyes of the customers. Hire carefully.”

What to Look for in a Rep

When the subject in a conversation with a manufacturer turned to what he looked for in a potential rep, the manufacturer was quick to point to preparedness and knowing when to listen as important skills.

According to the manufacturer, “Whenever I meet a rep for a personal interview, he had better be prepared with industry and territory knowledge and a working knowledge about my company. I don’t know how many times I’ve met with reps who show me right off the bat that they haven’t prepared for the meeting. If we have to spend the entire meeting going over fundamental information, there’s very little chance I’m going to sign that rep.”

And next, even for the rep who comes prepared, there comes a time in the meeting that he’s got to hold his tongue if he wants to make an impression on this manufacturer. “Talking too much and not listening enough are cardinal sins,” he explained. “The rep will go on and on about himself and his agency when all the major points have already been made. Instead of talking at great length he should treat me as a potential customer, read my body language, try to get a sense of what my needs are, and then respond accordingly. It’s the rep who shows me these talents who gives me a much greater sense of optimism in establishing a relationship.”

Mistakes to Avoid

When a manufacturer was beginning the move from a direct to an independent rep sales force, she queried some of her noncompetitive contacts about missteps she should avoid. According to the manufacturer, here’s some of what was advised:

• Failing to understand the rep’s multi-line business — As a result, many manufacturers want to be first and foremost all of the time with the rep in front of the customer. The knowledgeable principal, on the other hand, understands the work of the rep firm and recognizes the strength in the synergistic approach.
• Placing unrealistic demands on the rep, owing mostly to their own lack of sales/marketing planning — The word “communication” comes to mind here. If the manufacturer thoroughly communicates his plans, goals, etc., to the rep and gets feedback in return, unrealistic demands tend to disappear.
• Operating on a company-to-company vs. a person-to-person basis with the rep firm — The best advice to follow here is “Don’t treat reps as reps, treat them as a part of the team.”

Communicating Succession Plan Details

The obvious benefits of an agency communicating its succession plan details were recently detailed by one manufacturer. According to the manufacturer, “We’ve enjoyed an excellent working relationship for more than 10 years with one of our reps. Since the agency owner was in his early 50s when we began the relationship, we knew that we weren’t going to be together forever. As a result, from day one, both of us agreed that joint planning and communication were key to our relationship. When he finally decided to make a move, he outlined two options for us. The first involved him selling the agency to someone he had brought on board a couple of years earlier just for that reason. His second option involved trying to find another agency that might be interested in buying him out. Since he constantly talked to us, we felt free to alert him to the fact that we knew of another agency that was looking to expand. The synergies between the two were fantastic. Plus, that agency had an interest in taking on the existing personnel. As things worked out, he followed through on the option we outlined, and his former employees kept their positions with the potential for lucrative futures. Our relations with the agency that took them over couldn’t be better and we’ve already seen an improvement in sales performance.”

MANA welcomes your comments on this article. Write to us at [email protected].