The concept of backselling seems to underlie so many conversations that Agency Sales has with independent reps when it comes to defining their relationships with their principals. So too is it the case with Tom Hoarty.
Tom Hoarty (left) founded Process Control Products in 2014.
When he was asked, in general, how knowledgeable are manufacturers about what their reps do for them, Hoarty, Process Control Products, Burlington, Massachusetts, explains, “Sometimes you just don’t know what your principals don’t know. If a principal isn’t thoroughly knowledgeable about all that my company does for them as their representative, then it’s my responsibility to educate them.”
That’s a view that has long been espoused in the pages of this publication, not the least via the many articles on the subject by John Haskell (aka Dr. Revenue).
Editor’s note: What follows is a definition of backselling that appeared in the April 2021 edition of Agency Sales:
“What is backselling? It’s how savvy reps invest a little time every month to ensure their principals understand those reps’ value. They communicate with principals as if the line were in jeopardy even when it is not because they know that anything they say after the line is in jeopardy will sound like an excuse instead of communication.”
And perhaps a little timelier, Dr. Revenue recently offered this interpretation: “Backselling is the process of selling back up the channel to the manufacturers that a rep firm ‘represents’…it is the process of constantly treating each manufacturer as the firm’s most important customer.”
But now back to Tom Hoarty’s experience with backselling. According to Hoarty, “We had an experience a few years ago with a principal that we were very successfully repping for many years. The principal was going through a shift in senior management. The new senior management told us they were getting rid of our regional manager who handled us in New England and all the East Coast. The company contacted us ahead of time to let us know that we were in a good position with the company as we were performing well over budget in terms of bookings and sales, and they were well aware that we had an excellent customer base. In their words ‘We’ve got other rep organizations around the country that we have to grapple with. You just keep on doing what you’re doing, and everything will be okay.’”
Say Goodbye
“Well, we went ahead and did exactly what the new management suggested to do. But then they came back at us in six months with the complaint that they never heard from us and said, ‘Goodbye.’ That more than makes the point that no matter how well you’re performing, you always have to keep in touch with the senior management — especially if there’s new management.”
Hoarty emphasizes that even if a rep organization does keep in touch there could be internal pressures at the principal that could cause a change in sales strategy. “I’ve been on the other side of the picture as the vice president of sales and marketing for a manufacturing firm when there was a change in the CEO office. For years senior management and the Board of Directors had agreed to go to market with independent sales reps around the world, and then a new CEO came in and pushed for a complete direct sales organization without any consideration for how well reps have been performing. What is so often the case is that the new CEO doesn’t know the amount of time, money and resources that their reps have to invest in order to develop relationships. They simply don’t know all that I have to do in order to find customers for them.”
Hoarty goes on to describe how to work with his principals on targeting potential customers together. “At times I have the manufacturer’s regional sales manager come in here and as we drive down the highway, he simply points to all the buildings he sees along the highway and says, ‘There’s a potential customer. Oh look, there’s another potential customer.’ It is my responsibility to have the regional manager know that I spend hours looking for prospects, calling prospects and developing leads for my principals. This all has to be communicated to the manufacturer and that’s what I take pains to do. At dinner that night I remind the regional manager of my efforts and discuss strategies on how the principal could work with the rep organization to develop more solid sales leads.”
This reliance on the concept of backselling is certainly something that has grown on Hoarty after years as a rep. Looking back at his career, he explains, “When I first came out of college, I worked for a distributor who worked closely with reps. And, I had worked for a rep back in the ’80s, so I was very familiar with who reps were and what they did. I’ve always been knowledgeable about what their function was in the territory. I opened my own agency after receiving a call from a friend whom I had worked with more than 20 years ago. He couldn’t find anyone to work his line and asked if I would be interested in taking it on.”
Today Hoarty heads the Massachusetts-based rep firm that covers New England and focuses on the electronics, semiconductor, pharmaceutical, biotech, defense, optoelectronics, and the photonics markets.
An Instrument of Change
If the importance of backselling could very well be construed as a change that Hoarty has experienced over his years as a rep, so too has the emergence of technology as a major instrument of change. “In the past our contacts were all face-to-face. Now, especially with Covid, it seems like everything is through the computer. This results in us spending much more time in the office. I’d say that when I started as a rep, if I was in the office twice in a week, it was a lot. I had regularly scheduled visits in the field in front of customers. Now it’s a lot of phone calls, text messages, emails and Zoom meetings. Is this good or bad? I don’t know. Obviously, it’s critical that I get in front of the customer in some manner, but it’s all about determining how the customer wants to communicate.”
Then there are the changes that have occurred in how best to communicate with customers. “I can spend hours calling prospects and no one calls you back. So many of our clients hide behind their email and voicemails. As a rep you’ve got to understand the various ways people might want to communicate and then use it to your advantage. You can’t just say I’m going to keep on calling because some people are never going to call you back.”
Locating and attracting new principals remain the lifeblood for Hoarty and his agency. “I’m always looking for a principal that fits my line card and customer base,” he emphasizes. “The question remains, “Will representing this company be best for my customer base and rep firm?”
Knowing When to Say “No”
To help answer this question Hoarty relates one experience from his past: “Shortly after I entered my industry, I went to work for a major rep firm. There were seven sales reps in the firm working together. We had a number of major product lines and we sold into a large account base. Shortly after I joined the firm a large account came to us in an effort to reduce their supplier base and proposed that we would be the sole supplier for all of a specific product. This would have taken our sales from about $2 million in sales to $5 million for the principal into the account. Since I was young my first thought was on calculating commissions. My initial response was ‘Great, let’s do this!’ But ultimately, as a rep firm we had a meeting and decided not to bring the opportunity to the principal. Our reasons for making that decision were:
- “First, our principal was often behind schedule in shipping orders, and we didn’t think the principal actually had the capability to supply the volume of the product desired. Naturally, we were concerned about how that would impact our excellent, long-standing relationship with the customer.
- “Second, if we got this order as a long-term commitment, there was always the chance the principal would take the account as a house account.
“We always had a great relationship with the customer and didn’t want to do anything that would jeopardize that. We ultimately convinced the customer to leave the supply chain as it has always been. What this shows is how important it is to do what’s best for the customer, the rep firm and certainly the principal. You want to keep them all happy.
“These are all considerations that have to be weighed when deciding whether or not to take on a line.”
Locating Principals
When it comes to exercising the process of finding new principals, Hoarty explains that recommendations through MANA and certainly attendance at trade shows provide for plenty of opportunities. “I’m always visiting the websites of various trade shows and checking whether my principals will be there or what prospects will be in attendance.”
He also cites the benefits of networking with other reps when it comes to finding new principals. “I’ve developed some new principals after getting to know fellow reps at national sales meetings. You’re together for two or three days at a sales meeting and naturally you’re going to talk about the lines that they represent. If I identify a line that would be good for me in New England, naturally that’s something I’m going to follow up on.”
A natural subject to follow up on with Hoarty when it comes to dealing with prospective or new principals is that of introducing the concept of a shared territorial development fee or retainer when the manufacturer has no existing business in a territory. According to Hoarty, “Sure, it’s a little bit like pulling teeth but you’ve got to remind the potential principal of the fact they have no customers, no business, no market share and no name recognition. I tell the management that if you want to engage with me, then there’s going to be a fee for the work I do. That’s it, if you want to engage, great, let’s go, but there will be a territory development fee.
“Some will reluctantly say yes but will limit the amount of time they’re going to pay the development fee to perhaps three or four months. I tell the potential principal that after the end of initial time frame we will make a decision as to what’s going to happen moving forward. Do we extend the time frame of the development fee, or should we totally go with commission or perhaps a combination of both? When you present it to a manufacturer that way, some might say no and while others will agree.”
The Process Control Products File
- Location: Burlington, Massachusetts
- Products and Services: We sell to New England-based companies in electronics, semiconductor, pharmaceutical, biotech, military and defense, converting and medical instrumentation. Our product offering includes static elimination products and PC board manufacturing.
- Website: www.processcontrolproducts.com
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