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In the course of a conversation covering a variety of topics a manufacturer with a long history of working with reps was asked if he would be willing to share his thoughts/philosophies concerning house accounts.

Here was his thinking on the subject: “We’ve been in business for well over half a century and have a proud history of working with independent reps for more than 40 years. With that long period of time in place, we’ve adopted a philosophy that we treat our reps as part of our family. We don’t look upon them as ‘just those guys who get a fat check for selling something for us.’ What we’ve done is to recognize the fact that they’re a variable cost. We — and they — sell a great deal of capital equipment, and everyone makes a lot of money. On the other hand, when things aren’t so hot, they don’t get paid as much. Having explained that, we believe that reps are paid because they know the territory and we support the heck out of them to let them do their job to the best of their ability.

“If we introduce the concept of having house accounts for any number of reasons, then that’s not supporting the rep. That would work against what we’ve always believed in. If anything, that would motivate against them doing their best. Our feeling is that by the way we work with them, we get a much higher mind share.”

When this manufacturer was asked what he might say to a rep who was faced with the specter of one of his long-standing principals introducing house accounts for any reason, he offered the following: “You might want to view that as some sort of a ‘red flag.’ Perhaps it’s the beginning of them thinking about going direct.”

The manufacturer continued that if that’s what he would say to a rep, here’s what the rep might consider about communicating to the manufacturer who contemplates such a move: “Take a moment to consider what your sales model is and what you hope to accomplish by such a move. If you say the rep is an integral part of your channel, then it’s important that you talk the talk, and not everyone does that. By introducing house accounts, you’re differentiating your reps by isolating that account, and you’re isolating it for the wrong reasons. For instance, one of the most important reasons for working with reps is that they call on multiple purchasing points within a customer. They can get multiple sales within that facility. As a result, by turning it into a house account, you’re not getting the benefits of the rep’s abilities. How many times does the rep come across a new opportunity with a customer because he enjoys better penetration than you could achieve? You get much more motivation by letting them go after anything and everything they can get.

“Some companies have a major problem when they have to write a big check to the reps. That’s not me. When I have to do that, I’ll be sure to send them a little ‘love’ note congratulating them on the effort and thanking them for the help. Simply stated, that’s our philosophy. We run our business well and our philosophy allows us to head off any problems ahead of time.”

Surveys as Intel

A manufacturer that has experienced good luck when it comes to eliciting information from his reps via annual surveys described his thinking:

• “The first thing I do is to make sure that I don’t ask too many questions. I find that if you overburden the rep with a lengthy document, chances are that he’s either not going to complete it, or his effort will be half-hearted, at best.
• “Next, I make sure I’m specific concerning what I’m looking for. There’s no sense in asking an open-ended question if I can get what I want by simply focusing in on the subject from the very beginning.
• “And, finally after I’ve completed a survey, I always make sure to pass the information along to all of my reps. There’s nothing worse than keeping results — even if they’re negative — a secret. If I fail to share the information, no one believes I had any real reason for asking my questions in the first place.

“By taking that final step, I’ve been pleasantly surprised that some reps have gotten back to me with suggestions on how to improve a poor situation, or even how to make a good situation better.”

Always Say Thanks

Never underestimate the value of written “atta-boys.”

One rep we visited with recently admitted how important compliments from their principals were to them — for a couple of important reasons. “First, it lets everyone in our organization know the professional kind of job we’re doing for our manufacturers. Second, when we receive a letter praising our efforts, that lets us build a growing file of recommendations we can show to prospective principals and customers. And, to make sure that the agency employees, prospects and customers see how much their efforts are appreciated, the rep has cleared an entire wall in its office building for display. You can hardly miss it because it’s the first thing you see when entering their building. The bottom line is it works for all concerned.

Let Reps Do the Job

“I’ve learned something important about dealing with people in my office that has been very helpful in my relationships with reps,” maintained one manufacturer. “When I was a younger manager intent on climbing the ranks in my company, I had the very annoying habit of assigning a task to someone in the office and then literally looking over their shoulder as they completed the task. Naturally, it was impossible for me to keep my mouth shut as they attempted to complete the task to my satisfaction. Finally, one day someone said to me: ‘You assigned the task to me, right? Then leave me alone and let me get the job done. It will be completed a lot better and faster that way.’ I’ve never forgotten those words — especially as I’ve crafted a long and successful career of working with reps.

“If I trust a rep to represent my company’s line, then I trust them enough to do the job correctly. Once they take on the line, my job and the job of everyone at the factory is to provide them with all the support they need to be successful. Then, it’s my job to get out of the way. They’ll let me know when they need something.

“This is a philosophy I’ve subscribed to for years, and it’s an understatement to say that my reps and I couldn’t be happier.”

Working Together to Solve a Problem

An obvious sign of the trying economic times was related by one manufacturer that was informed by its top rep firm that it was downsizing from two full-time people on the road to just one. The move was taken because the rep’s other principals had undergone some tough times and had downsized themselves. The principal involved was the rep’s top line, but it was his feeling that having just one person work a fairly large territory wasn’t going to cut it. The rep agreed but was unable to hire another person to continue the expected coverage. But the rep and the principal desired to continue to work together so they had to agree on something. What they finally agreed upon was that the rep would either give back a portion of the territory or appoint a sub-rep. The rep opted for the latter, and things seem to be working well thus far.

Support for the Rep

Closely related to the concept of understanding the rep’s role in the marketplace is the practice of fully supporting the rep in all that he does. Ways manufacturers can fully support their reps were discussed in the course of a rep virtual teleconference late last year. Among the suggested practices were:

• New Products — The lifeblood of any successful rep is a pipeline filled with new products. But, that’s not all. To accompany those new products, he needs a steady stream of product samples, literature, and advertising support. The rep must be fully armed so he can properly communicate the value of your product to customers and prospects.
• Current information — There’s no worse-case scenario than to have information concerning your company circulated in the field and the rep is the last one to know what’s going on. When anything of any importance occurs, keep the rep up to date — or better yet, let him know in advance.
• On-time quotation and delivery information — The unforeseen happens with regularity. When it does and when it affects information related to quotes or deliveries, it’s imperative that the rep have the information quickly so he can pass it on to the customer. Want to lose a customer in a hurry? Don’t communicate on matters
• of importance.
• Assistance — The rep is constantly contacted by his customer for needed information. The real-world experience is that reps don’t always have the answers. That’s why it is so important that manufacturer personnel be at the ready to provide the product, installation, etc., information that the customer needs. Is there any better way for the rep to look good in front of the customer than to have the factory provide an instant response to their questions?

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