Mike Gallagher
If Mike Gallagher has learned anything over the course of his lengthy and successful business career it is the value of employing and relying on best practices.
Just as so many reps before him, Gallagher, president and CEO of Centro, Inc., began his business career on the manufacturing side of the desk working for companies including Thomas & Betts, Norton Abrasives, and Square D Company.
“I spent most of my business life working with large companies that sold products through distribution and rep channels. When I was about 40, I determined that my goal of serving as president of a publicly traded company was not really going to be a good fit for me. I decided that just working for the money and rewards that came with it wasn’t right for me. At the same time, I decided if I got the chance to run my own business, whether a distributorship or rep agency, I would take it.”
As a result, after years of working on the manufacturing side, in 2001 he and partner David Forell acquired Centro. Today, after the retirement of his partner in 2014, Gallagher emphasizes how important best practices have been in the success of the Memphis, Tennessee-based company.
Gallagher admits that when we took over Centro, “I had never worked in the process industry before and did not know a thing about it. And honestly, I did not know the difference between a butterfly insect and a butterfly valve. Luckily, I had a good team of people at the company, and they were desperate for good leadership. We restructured the company, executed a plan for the future, and went with it.”
Learning From the Past
Any conversation with Gallagher devoted to the history and success of Centro begins with his emphasis on the importance of relying on best practices that he learned from observing top distributors and rep firms when he worked for manufacturers. Among the best practices he’s leaned on heavily over the years are the following.
Financial compensation — “Don’t mess with peoples’ pay. If there’s anything I haven’t changed in more than two decades, it’s how our people get paid. Here’s the problem when it comes to paying people — the more a company makes, too often the owner thinks that it’s his money. That’s not the case. You should never believe that someone isn’t worth making a lot of money. I wish I had more money to pay our people more.”
He adds, “I provide a platform that allows our people to make a lot of money. Every month that we reach our goals, everyone in the company, not just the salespeople, gets a bonus. My thinking is that when the company does well, we all do well.”
No excuses — “We employ a no-excuses environment here. I don’t charge any of our salespeople when it comes to spending money. The company pays all of their expenses. If we didn’t compensate them for their business expenses, that would serve as a disincentive for them to go out, meet with customers, and entertain them (e.g., lunch, dinner), all with the goal of making the sale.”
Ease of operation — “Centro is an easy-to-run company because we have everyone pulling on the same end of the rope. Everyone knows how we’re doing as we regularly review and share all our numbers on a quarterly basis.”
Expert leadership — One of the major changes Gallagher employed when he took over Centro was to divide the company into six distinct divisions:
- Automation and robotics.
- Instrumentation, measurement and control.
- Process equipment and sanitary.
- Filtration and process system.
- Pump and seal.
- Valve, actuation, and engineered products.
“To run those divisions,” he explains, “we have experts — division sales managers — on our staff that serve almost like having a factory guy on the staff.” The division sales managers do the target account planning with the territory salespeople and work with the vendors on our annual sales goals.
Team effort — Referring to the quote, “A rising tide lifts all boats,” Gallagher emphasizes that “If everyone is working together and the company is reaching its goals, they’re going to make more money than they made last year. Growing our business is good for everyone.”
Dealing With Change
Employing those best practices has served him and Centro well during the more than two decades of his ownership even in the face of fairly significant changes in business practices driven primarily by advances in technology. Gallagher maintains, “A lot of reps don’t understand or don’t accept the fact that technology has changed how the customer expects us to work and what they expect from us as a selling organization. The customers who are in the decision-making roles grew up with computers and use their smartphones to search the web to buy products. To be successful, reps have to understand how to leverage technology to their benefit. They’ve also got to understand the buying preferences of this new generation of customers.”
He adds that Covid and its aftermath have had an enormous impact on people and how they buy. “People have become more self-sufficient as they changed the way that relationships are built with the rep community.”
Continuing to reflect on how customers’ buying practices have changed, Gallagher notes that “Years ago when I was a salesperson, when I’d call on a customer, there was always a receptionist, and I could complete any number of cold calls. Today our salespeople find that customers prefer to interact through their phones and computers and are often inaccessible for in-person meetings. Our salespeople have had to learn new skills in video conferencing, email marketing, text messaging, and proposal/quote development. If the customer is avoiding you, you’ve got to look in the mirror and consider why this customer doesn’t think you are going to say anything important.
Technical Products
“At Centro, we sell very technical products, products that often operate in highly dangerous environments. That’s why it’s important that we strive to explain in a very quick and efficient manner what the value is that we have to offer. We have got to let the customer know that if they give us the time, we can tell them how to make a valve last longer, how they can improve their productivity. What all this means for the rep is that you’ve got to find a way to connect with customers through technology in order to present your value proposition.” In addition, he emphasizes, “The most powerful factor influencing a sale today is the establishment of trust between the rep and the customer. That’s hard to achieve in this day and age. That’s why harnessing technology is so important.”
If it’s important for the rep to establish firm relationships with customers, it is especially important to have a good relationship with manufacturers. On that subject, Gallagher wishes that vendors had a clearer understanding of what reps do for them. “We create a consistency in the marketplace and develop deep customer relationships that make it easier for the manufacturer to be able to do what they do in our territory. For instance, in a number of territories, I have had the same salesperson calling on accounts for 20 years now. At the same time, manufacturers are restructuring annually, and I’ve got one sales manager who is the fifth or sixth person I’ve worked with for over 22 years. There is much less consistency in the sales organization on the manufacturing side. At the same time, many manufacturers change pay plans on a regular basis, which often discourages their salespeople.”
Conversely, he continued, “Since I come from a manufacturing background, I would maintain that we have a clear-eyed appreciation for the things that our manufacturers do well. As a result, we try extremely hard to focus on leveraging their brands, their strengths, and the quality of their products. At the same time, we make every effort to regularly thank their inside people for all that they do for us. We try to show them how we are working aggressively on their behalf and let them know how we’ve invested a lot of time, money, and effort in our company. Bottom line, we let them know that we are doing our best to build business for them.”
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