© mavoimages | stock.adobe.com

When a manufacturer heard a comment from an attorney concerning working with reps in the absence of a contract, here’s how he reacted:

“I can understand what the attorney was saying. He advised reps to be wary and to avoid contracts that were not fair to both sides. As a matter of fact, he stated his case quite succinctly when he said: ‘In the absence of a clearly worded contract that is fair to both the manufacturer and the rep, I’d advise the rep — if he really wants/needs the business — to go ahead without a written contract.’

“That’s well and good and I know where he’s coming from, but here’s my and my company’s attitude on the matter of contracts. We’ve always believed that it’s important to have our reps under contract. Our approach is that we choose our reps carefully. That means we spend a lot of time up front searching for the right reps, interviewing them, visiting them and requiring that they visit us at the plant in order to get to know our people. Our philosophy is that we want them to become a part of our family. As a result, when we have a contract in place, that ensures that both sides of the agreement are comfortable with the terms. If a rep ever approached me and indicated that a handshake type of arrangement was acceptable, I wouldn’t take him up on his offer. The contract remains the most effective means for formalizing the relationship — that’s important to us and should be to the rep.”

Planning Growth

When manufacturers sign on new reps, developing relationships with existing customers always takes priority. That’s the view of an industry consultant who was recently in touch with Agency Sales. Good manufacturers have a better sense of the big picture and plan their growth. They use the reps and take full advantage of their contacts, piggyback on other principals to get the rep to chase new prospects and constantly feed the rep useful and valuable information to share with the customers. When that happens, the prospects turn into customers, and the rep develops a list of contacts that value his opinion and rarely turn down the opportunity to visit or receive a phone call. The manufacturers need to feed the factory developments to the rep and the rep needs to share those with the customers.

The Importance of a Contact Plan

Both the rep and the manufacturer need to be realistic about the number of prospects in a given territory. Buying a mailing list may be cost-prohibitive for a manufacturer, but if the rep buys the list and can use it for mailers for other principals and justify the cost, it then makes it a win-win all around. Being flexible in using and developing prospect lists is key to driving more sales.

Once prospects are identified, the initial contact can take the form of a cold call, mailed literature, or you can use territory-specific internet keyword searches. It can originate from the factory or the rep — either way, the first impression is lasting, so make sure your mailer or telemarketing makes the right statement. With keyword searches, you can also target specific geographic areas. Most budgets for keyword searches on popular strings are limited. However, if you want to grow a territory and have a rep there to support sales, you could afford to bid higher for fewer leads that you know your rep can turn into sales.

The Follow-Up Plan

Keep in mind that the follow-up plan is more important than the initial contact. This is where the critical go-no-go decision is typically made by a customer. Is this best done by a rep or a combination rep and manufacturer? Everyone knows the sale isn’t made on the first visit, so the process doesn’t end after the first meeting.

Once you have a prospect, the key is to not let them forget you. Most of the time, you have to wait for the customer to reach a reorder point, and you get an opportunity to quote a new job. All the work in finding a rep and signing a contract will be lost unless you can maintain the contact when the next RFQ is sent out. There is little chance a potential customer will remember you when he is sending out RFQs. You need to be asking for RFQs every day, or as often as possible.

This is where many relationships fail to maintain an effective follow-up system to keep your name in front of the customer. It’s the rep’s responsibility to keep the presence with customers, but it’s the manufacturer’s responsibility to provide reasons for the rep to keep making repetitive contacts.

Manufacturers have to realize that reps focus on the customers with active RFQs and pending orders. You need to provide reasons for them to make recurring contact with prospects. This is so easy and yet so few people realize the importance of generating reasons for rep visits or calls. The process should be viewed as a mini press release campaign. In fact, you can even use some of the ideas as outlines in press releases to magazines, trade groups, or even Internet search engines and blogs.

The manufacturer needs to provide a constant supply of reasons for the rep to keep in touch with each prospect. The best reasons include new product releases, new technologies acquired or new equipment purchased. The manufacturer needs to play up the strengths of the new product or process and send the rep in to the appropriate prospects with a sample. The same applies to new technologies or equipment purchases. The manufacturer should publish comparison charts or product samples from the new machine showing the benefits and possible cost reduction.

When a rep calls just to say “Hi,” the prospect will constantly shorten the amount of time spent with the rep. When a rep calls with some important information, the customer will value the information and recognize the rep as a resource and not just another pretty face.

The Right Way to Make a Decision

After he got over the shock of his rep of many years terminating the relationship, a manufacturer reflected on the experience. “Just as so many other manufacturers, I’ve usually been the one who’s terminated a relationship — not the rep. But all things considered, the rep’s decision couldn’t have been carried out in a more professional manner. It was done so well that the relationships we’ve worked so hard on developing over the years will likely not be harmed.

“As it appears to me, and for the most part it was communicated this way to me by the rep, he was simply looking to fine-tune his marketing approach in the territory he served. His ultimate goal was to limit the number of lines he was carrying in order to concentrate more on the remaining lines. He’s not taking on another line with similar products to ours.

“On top of that, he’s still working with us and has promised to continue representing us until we are able to find a home in the territory. And, he’s taken it up a notch by communicating with others that he knows in the territory and alerting them to the fact that our line is available. I’m sure we’re going to find a good home, and I wouldn’t hesitate to recommend this agency to any other manufacturer — although they’re not taking on new lines in the immediate future.”

Maximizing the Rep Search Process

Late last summer MANA manufacturers seeking to partner with independent reps were pointed in the direction of the association’s website (www.MANAonline.org) and RepFinder® in order to meet their needs. In the course of a MANAcast conducted by Jerry Leth, MANA’s vice president and general manager, it was emphasized that “When manufacturers put together a list of prospective reps to work with, they should keep in mind that in order to be successful, you need to create a high level of trust with customers. What manufacturers need to do is locate those reps that have that type of relationship with the customers. Reps aren’t there just to sell products; they are there to help customers solve problems. It’s those types of reps manufacturers should seek to partner with.”

After directing manufacturers to the MANA website and guiding them through steps to maximize their experience in locating prospective reps via the RepFinder®, Leth explained that once you settle on the prospective reps you want to consider working with there are several steps to take:

• “Be sure to ask prospective reps what other lines they represent. That allows you to ensure they don’t carry any competitive lines.”
• “Ask what type of customers they sell to. Equipped with that information you can better decide whether it’s a good fit or not.”
• “Be sure to visit the rep’s website. More than 80 percent of MANA members have websites. Those sites will acquaint you with their territory, the number of salespeople they employ, etc. This is all critical information to have when making a decision.”

Once these steps are taken, Leth advised principals to make contact with prospective reps and then wait for them to get back to you. Once contact is made, it’s time to think about the interview process. “Keep in mind that there’s much you need to learn about the rep and their organization. Remember some people talk a good game, but they aren’t always what they appear to be. That’s why the interview is so important.

“At the end of the interview the manufacturer should have a high level of confidence as to whether a relationship is going to work; and, it will only work if the relationship is a true partnership.”

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