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MANA has been especially active over the last several months when it comes to conducting MANAcasts and MANAchats during which association members can network and share solutions to various concerns and problems.

More than once during those sessions, the subject of contracts between reps and their manufacturers comes up. To that point, there’s never a bad time to emphasize to both reps and their principals that it’s critical to have and rely upon the terms spelled out in a written contract between the two entities for the following reasons:

• While personal relationships and handshakes are great, they should never serve as a substitute for a written agreement.
• Specificity is critical in a contract. Just as important is the need to remain flexible during early discussions with agencies about any number of things including territories, products, commissions, terms of commission payment, performance, the terms of the agreement and the rep’s rights after termination. Then, it’s important to write areas of agreement into the contract.
• When the need arises, specify other points that are not covered in the contract in a letter of agreement — sales meetings and trade show participation, promotion involvement, service, marketing functions, etc.

Rep Councils Provide Feedback

Earlier this year the subject of rep councils was discussed during the course of a MANAchat conducted for manufacturers. The discussion that ensued brought to mind a number of caveats regarding rep councils that manufacturers and MANA have long advocated. Included in some of the discussion was the following:

• Composition — Be sure to include rep and factory senior sales and marketing executives. Others can be invited, but it’s very important to have decision makers take part in the process. It serves no purpose to have someone at the table who has to go back to the office to find out if you can do this or that. Have more reps than factory people — it’s their forum, not the manufacturer’s. Remember reps are your eyes and ears in the field and that’s how you learn firsthand what’s happening in the territory.
• Scheduling — Once the manufacturer has created a rep council, he can’t wait a year to have his first meeting. Since every company is different it’s difficult to determine a set-in-stone best practice when it comes to scheduling. At the very least a meeting should be held once or twice a year. One of those meetings could be scheduled at an industry annual conference. In addition, since technology now plays such an integral role in our business lives, use technology for your meetings. Don’t be afraid to conference call or use webinars or video conferencing.
• Absence of Recriminations — Feelings and egos can be bruised easily, but it’s critical to foster an environment of open and honest communication. There can’t be any hidden agendas or ulterior motives. One way to achieve this might be to use an outside facilitator who can ensure that the group stays on track.
• Managing Information — A well-put-together rep council should result in a wealth of information. That creates the challenge of managing all that information. In order to meet that challenge you’ve got to weave your way through all the ideas that are presented and show the group that action will be taken. That’s why minutes of meetings are important as well as designating someone to take action within a stated period of time.

Additional guidelines for rep council scheduling that developed from the discussion included:

• Meetings should be at least three to four hours long.
• Don’t schedule them for the end of a quarterly month.
• Avoid Monday or Friday scheduling.

The Value of a Quick Response

Following a survey of his outsourced sales team, one manufacturer identified three distinct subjects that his reps, in general, took issue with:

• Availability of knowledgeable factory personnel — “Whenever we have a question in the field, nothing makes us look better than our ability to get an instant and accurate response from the factory. That results in us and the manufacturer looking like we’re a true team.”
• On-time quotations and delivery information, not to mention on-time and accurate commission payments — “Next to consistent product quality, quotations and delivery are probably the most important things customers want to know about. If they can’t be provided by the reps with that information, they’ll probably look elsewhere for service.”
• Regular and timely communication — Nothing makes the reps feel more like a member of the team than always being included in the loop when it comes to corporate information. According to one rep respondent, “We don’t like surprises. They catch us off guard. That’s why when there’s a new personnel appointment, new product announcement, price change, or anything that we can make use of to solidify our relationship with customers, we want to have it first. That lets the customer know that we are truly the manufacturers’ representative.”

What Should Manufacturers Value?

When the owners of a rep firm are interviewed for profiles in Agency Sales, inevitably they are asked if there is anything they do for their manufacturers that they wish the manufacturers were more appreciative of. When we recently related to a manufacturer that that question was always asked, he had an interesting response. “I can relate to that because from the day we started working with reps about 30 years ago, we’ve always made it a practice to evaluate our reps’ performance. Our philosophy has been that if we don’t cast a careful eye over all the things our reps do for us, then there’s no real way of our knowing if this is the most cost-efficient way to bring our products to market.

“When we started with this practice, our evaluation basically consisted of just looking at sales in the territory and determining if they matched expectations that our marketing people said we should expect. Even after a few years when we were able to enjoy the luxury of several years’ experience, we still just threw numbers into the review. Things changed a couple of years ago, however, when our national sales manager suggested that there were other important variables we ought to be considering in our reps’ performance.”

It was then that the company took a careful look at what other services reps were providing in addition to making sales calls and following up. “For instance, several of our reps were conducting mini-trade shows that we never really knew about. Others regularly conducted in-plant seminars for customers. The point is that there’s much more to a review than just looking at sales. We weren’t unhappy with our reps at all when we undertook this new approach. But when we discovered what they all did for us, we certainly enjoyed the view that was provided of our marketing partners’ activities.”

Taking Care in Selecting Reps

Some things never change. That’s certainly the case when it comes to being careful when it comes to selecting the right rep firm for your company. This all was emphasized when an article that appeared in Agency Sales about 20 years ago came to mind. At the outset, the article made a point to stress the importance of MANA’s online directory (now RepFinder®), and the value of following up on recommendations from customers, other reps and from non-competitive manufacturers.

That wasn’t all, however, as the article listed several keys to keep in mind during the decision-making process:

• Do nothing by default — Unfortunately too many companies hire employees to take on agents without really taking the time to choose the best of the pack. If you find yourself in the position of having to settle, you are probably better off not making a choice and reopening the search process.
• References — Be sure to check references before you conduct the interview. It’s quite easy to look over a list of major customers and principals and make a bad decision. The idea of checking references is not because of distrust; instead, it shows you strengths that any agency may take for granted, or not even mention.
• Expand the search — You will probably want to advertise in publications such as Agency Sales magazine and in some of the vertical industry magazines that cover your industry. In addition, you’ll want to contact agents listed in directories (e.g., MANA’s RepFinder®), and those who are recommended by other agencies and manufacturers.
• Importance of the interview — Conducting a face-to-face interview is critical, and during that interview you should strive to get at the agent’s goals and objectives. Always remember to ask behavior-oriented questions. If you want the territory to grow, make sure the agency you select can perform that function with their present staff, or is willing to grow along with you.
• Expand the rep profile — What you are looking for in a rep should be expanded beyond the basic requirements (i.e., experience, contacts and territory) and should include personality characteristics that will be critical in the relationship. You should have an idea of how each potential rep will mesh with the individuals in your organization, as well as with customers.
• Assign one person with the responsibility — By responsibility we mean “full” responsibility to select a new agency. That doesn’t mean this person has to work in a vacuum all by himself; others may assist such as field salespeople or some of the manufacturer’s other personnel. But, when push comes to shove, the actual responsibility should be assigned to just one person.

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