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How do you manage your rep agency? Do you focus on profit and sales goals, or do you manage with systems?

Setting performance goals is common, but goals have disadvantages. Goals focus on a particular result. Normally goals are not modified to reflect rapidly changing operating and economic conditions. It is discouraging not to reach goals. You might question the reason for setting goals in the first place. I found “targets,” which are not as definitive as goals, worked better with my systems.

Systems are the procedures, processes and methods used to achieve certain results. One well known business guru is quoted as saying, “Organize around business functions, not people. Build systems within each business function. Let systems run the business and people run the systems. People come and go but the systems remain constant.”

My rep agency represented manufacturers of architectural construction products. Selling had two phases. The first phase required the marketing of our products to commercial architects and engineers, so our products would be included in the construction documents. The second phase was to solicit purchase orders from general contractors and subcontractors who constructed the building projects. I received my commission after these customers paid our manufacturers. It was not unusual to receive a commission for a sale up to three years after the process began with a presentation to an architect or engineer. I managed my business with systems. I set targets, not goals.

The systems listed pertain to a single-person rep agency. Systems for a multi-person agency are similar for the sales force and manufacturers. Additional systems are required for operations.

Sales Systems

1. Employ a long-term outlook for closing sales and building your business.
2. Continually build and strengthen long-term personal relationships with customers and manufacturers you represent.
3. Follow the 80/20 rule. Focus on the 20 percent of key customers that account for 80 percent of sales. Track the performance of the remaining 80 percent. A few could graduate to the top 20 percent.
4. Spend 80-85 percent of time on selling activities.
5. Continuously improve selling techniques. Read and attend sales courses.
6. Mentally rehearse sales calls and calls to manufacturers. If necessary, write down objectives for the call and the topics you want to discuss.
7. Employ annual, monthly and daily planning including focus targets and action lists.
8. Follow up, follow up, follow up. Use personal visits, telephone calls, emails or texts appropriate for each customer and manufacturer.

Systems for Meeting Manufacturers’ Expectations

1. Negotiate a fair representative agreement.
2. Classify manufacturers as focus group (80 percent of commissions) and secondary group.
3. Set sales targets for each manufacturer.
4. Maintain a positive mental attitude in all conversations.
5. Foster strong personal relationships with all levels of management.
6. Treat customer service and support personnel with respect — do not yell.
7. Contact key manufacturers weekly requesting quotes, entering orders, asking technical questions, or providing market updates. Touch base with secondary manufacturers at least once per month.
8. Become a partner. Provide the sales and market information requested.
9. Do not adopt a manufacturer’s CRM unless it fits within your systems.
10. Be cautious and adjust operations if any single manufacturer exceeds 25-30 percent of commissions.
11. Regularly evaluate the profitability of each manufacturer. (MANA is an excellent resource)
12. If it becomes necessary to resign, never burn bridges.

Business Operations Systems

1. Establish the appropriate business structure, Sole Proprietorship, C Corporation, S Corporation, or other.
2. Spend no more than 15-20 percent on administrative functions. This applies to managing your agency as well as reporting to manufacturers.
3. Cash is king. Focus on cash flow. Monitor and control expenses. Establish a bank line of credit if necessary.
4. Develop programs for continuous improvement of operations with target dates for completion.
5. Measure as many sales variables as necessary to serve your customers and manufacturers and to improve sales efficiency.
6. Maintain strong relationships with your accountant and lawyer.
7. Establish a retirement plan.
8. Establish a program and a schedule to stay physically and mentally fit.
9. Keep your life in balance. Your family and your social and spiritual self are as important as your agency.

Summary

Systems keep you focused on providing the highest level of customer service to maintain your position as their preferred provider of the products you represent. Systems assure you provide the sales effort in your territory expected by your manufacturers. Systems provide the means to operate a profitable agency.

Different systems work for each person and agency. Use the systems that work to achieve the performance you are seeking. Managing with systems assists you to reach your maximum potential.

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