A manufacturer recently offered what he viewed as a report card that evaluated his company’s performance in the marketplace once they had made the move from a direct to an independent manufacturers’ representative sales network.

Here’s how he described his company’s experience: “From the very beginning the combination of all of our reps’ talents clearly became evident. Their in-depth knowledge of the territory, local contacts and relationships coupled with their flexibility in the field immediately improved our market performance.”

He continued, “Then there’s the issue of synergy. The agencies we chose to go to market with had line cards that clearly complemented our products. What that resulted in was a feeling that we were getting much more time in front of the customers than we did with our direct sales force.

“In the end we came away with the feeling that the majority of our reps provided penetration at a much higher level within our customers’ corporate framework than we were enjoying previously.”

Tackling Tough Things First

Reps often wait for late — sometimes too late — in the interview process with a prospective principal before they pose the tough questions. One manufacturer let us know she’s more than prepared to discuss anything, but she doesn’t really want to wait for the agent to raise the subject.

“If we’re genuinely interested in a specific agency and believe there’s a real future in the two of us working together, we’ll anticipate his concerns and put them on the table first. For instance, consider subjects such as post-termination compensation, house accounts, or payment for pioneering work. We’d be less than honest with a rep if we shied away from or talked around these subjects. That’s why early on, we’ll ask the rep what his level of concern is with these and other subjects. Then we’ll put all our cards on the table and come to an agreement. We’ve done this for years and the reps we’ve wound up working with have all turned into top performers for us. Why? Because we’ve been honest with each other from the very beginning and nothing’s changed over the time of our relationship.”

Correcting a Bad Situation

In the midst of a teleconference rep roundtable discussion this fall, one rep got some attention when he began complaining about two of his principals. Another agent quickly spoke up and said “The way you’re talking really doesn’t reflect well on yourself. If you’ve got all these complaints, it just shows me that you haven’t done much to correct the situation.

“Let me change the tone of our conversation this way — let me tell you some of the good things I’ve experienced while working with my principals:

• “From the very beginning of my relationships, my principals have communicated to me exactly what they expect from their reps, and they’ve never varied from that course.”
• “They’ve always operated on a personal basis and have extended themselves so I feel as if I’m a member of their corporate family.”
• “My principals allow for adequate sales and marketing planning to produce realistic results. They don’t expect something to happen overnight.”
• “In general, the communication I experience with my principals has been excellent. They promptly answer requests for information and assistance, and they make sure I’m always included in the information loop.”
• “They’ve made it a habit to show an understanding of how I operate and appreciate the demands I have on my time. As a result, they don’t expect me to be selling their products exclusively all the time.”

Establishing Ground Rules

The marketing director for a mid-sized manufacturing firm described a step he took at the beginning of a relationship with new reps. “We’ve made it a habit to send a questionnaire to about 50 agencies asking them how they work with manufacturers who are similar to us. My goal in doing that was to learn the norms for reporting, commission payments, quotes, follow-up, and everything else that’s important to reps. Once armed with their feedback, I was able to create a set of ground rules that are acceptable to us and to most of our agents. I’d be lying if I said those ground rule are never broken, but by and large, I’d have to say that everyone knows in advance just how we’re going to be working with each other.”

The Rewards of Making the Right Choice

Admittedly the national sales manager carried a bias with him since he spent several years working as an independent manufacturers’ rep, but his advocacy for using agents grew out of a remarkably short period of time. Here’s how he relates his experience: “I had been a rep for eight years with my father’s agency. When an opportunity presented itself to work for a manufacturer, I accepted knowing that I’d have to do some persuading to get the company that I’d joined to make a move from a largely direct sales force to one more dependent on reps.

“I was right, it did take some persuading of company management but now just two years after making the move, we’ve got the metrics that show it was the right thing to do. Already we’ve seen an increase in the number of customer contacts that our reps make vs. what we had with the direct sales force. With that, there’s been an increase in overall sales and we’re more confident that we’re properly covering the territory over what we did in the past.

“In addition, we’ve also found that the reps we chose to work with have a far greater appreciation of the local product needs than our direct salespeople had. As a result, they’ve been able to provide us with constructive feedback to modify product design, advertising or promotions that is tailored to a specific territory.”

To Know or Not to Know

When a MANA manufacturer put forth the expectation that he wanted any agent he signs to know intimately everything about his product line, he was surprised to get some immediate pushback from other manufacturers. For instance, one of his peers offered: “You should expect your agent to know your market and understand your technology. That’s what’s most important. You really shouldn’t expect them to know that much about your line. Your job is to train them in the line. The fact that they bring all the other requirements to the table is what makes this training fairly easy. But you have to do it, and you can’t expect them to know the line without your help.

“As time passes and the relationship grows, however, you should expect your agent to know the line cold once you have trained them and they have had the opportunity to take it to the field.”

There’s No Rushing Success

“If I’ve learned anything after several years of working with reps, it’s that no two agencies are alike.” That’s how one manufacturer began the conversation describing her experiences covering more than three decades of working closely with independent manufacturers’ representatives.

According to the manufacturer, “Sure, we’ve always wanted immediate results when we’ve signed on with a rep, but over the course of time we’ve worked with reps, we’ve learned not to rush them. If they’re any good — and hopefully we’ve determined that they’re good before we signed them — then they’ll deliver in their own good time. You’ve got to keep in mind that one agency may be able to dive right into your line immediately and dazzle you with sales from day one. Another agency, however, may be in the middle of a special program for another of its manufacturers and they’ll have to defer the launch of your line for a short period of time. The key here is to communicate with your reps and learn all you can about their current and future plans. That way you’ll have a much better fix on what they can do for you.”

Planning for the Future

An exchange of opinions between two manufacturers on MANA’s LinkedIn discussion page showed that both felt an agency’s future plans were key to his company’s decision to work with them. The first manufacturer explained that when he joined his company as a sales manager, the company was in the process of changing from a direct to an agency sales force. In the course of training some newly signed agents, he explained: “We were persistent in our questions about what their future plans and goals were. If the agency was a one-person operation, did they plan to grow or add more people in the field? If they were just starting out, did they have the contacts and financial ability to make it through those initial ‘tough’ times?”

The second manufacturer concurred when she said, “We’re always interested in what the agency thinks it will look like in five or more years. Our feeling is that five years is just about as far as the majority of agents plan. How they answer that question will let us know whether the agency has given enough thought to his or her direction and whether we will continue to be a good match in the future.”

In addition, she emphasized, “I’ve always been especially interested in what their personal plans are — if the agent intends to retire soon, to personally concentrate on one existing principal, or to spend time further developing his people. These are all considerations I’d like to know if he’ll share with me.”

The Secret to Motivation

“Because of the commission structure and the way we work with our network of reps, we’ve found that they are entirely self-motivated.” That’s the way one manufacturer opened his presentation to a group of his peers earlier this year. He continued, “You don’t have to micromanage a rep sales system. All you have to do is stay in touch, travel with, watch and listen to what they do. Keep an eye on their sales. If you see something going wrong, just give them a bump and they’ll react. “I’ve also found that reps are more inclined to make that final sales call of the day compared to what a direct salesperson might do. That practice all has to do with their self-motivation and their desire to make more money.”

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