Issue: May 2024

Will Artificial Intelligence Be the End of Reps? — Part 2

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Last month I started a discussion about why Artificial Intelligence (AI) won’t be the end of reps. This month I share two stories that show why AI can’t replace reps.

AI Can’t Ask for a Favor

Someone at my principal in Europe decided to ship mounting hardware by ocean freight (eight-week delivery) instead of air freight (two-week delivery), so mounting hardware stock dropped to zero for six weeks. The factory’s message: “Tell your customers they have to wait.”

My principal’s products were useless without mounting hardware and customers’ production lines were shut down.

My largest customer was about to switch vendors. So I called another customer who had ample mounting hardware and asked for a favor. “I need to borrow 1,000 meters of mounting hardware for a month.” That customer let me borrow that hardware and I saved my largest customer. AI can’t do that.

AI Won’t Push Back

My largest customer had a rule. If you don’t increase your prices, you get to keep the business.

Every year my principal announced a routine 5 percent price increase. Every year I pushed back because prices in this product category actually were going down, and if the customer shopped around, they could get the same product for 30-40 percent less. Every year the factory backed off and this became one of their most profitable customers.

Then a sales manager who never met the customer took the account away from me and gave it to a direct salesperson 700 miles from the customer. And, when the factory announced its annual 5 percent price increase, the direct salesperson did exactly what he was told and insisted on the increase.

The customer found a new source for half the price.

AI is just like that direct salesperson. It does exactly what you tell it to do. Unlike AI, reps will push back when the factory does something foolish.

AI can’t do jobs that require trust and independent thinking. Those jobs will always go to reps.

Relationship Reviews — Strengthening the Partnership Between Manufacturer and Rep

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One of MANA’s highest priorities is helping manufacturers’ reps and manufacturers develop mutually profitable, interdependent, and long‑lasting relationships. Part of the process includes relationship reviews — manufacturers’ representatives and principals should constantly be reviewing each other’s performance with the goal of improving the relationship.

Improving the relationship involves both of you. On our own, we fail to see how others perceive our performance. We think we do okay, but unless someone comments on how we do something, we never know. We may do something we think is fine and it drives the other party nuts. They do not say anything, … Read the rest

Reps Build Something of Their Own

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The three partners of The Garham Group have been able to achieve their goals of successfully creating and growing a business all their own while “Bringing Products to Life.” As stated on the agency’s website (www.garhamgroup.com), the products they “bring to life” reside primarily in their customers’ backyards.

Anthony Zasuwa, one of the agency’s three partners, states: “We specialize in exterior building and outdoor living materials. These include decking, railing, cladding, foundation, and hardscape products. During the last five years, there’s been a real emphasis on backyard spaces. As an agency, we focus on selling innovative products that last a … Read the rest

Changes Can Trigger Line Productivity Analysis

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Sometimes it takes a trigger to spur a rep into action. It might be something along the lines of a change in commission rates, new ownership taking over a manufacturer, or dealing with a new sales manager, but whatever the cause, reps report that performing line productivity analysis can be an indispensable tool when these changes occur.

That was the gist of conversations that took place in the course of a MANAchat devoted to the subject of reps carefully analyzing how profitable their lines are.

One rep started off the conversation by stating a fairly common predicament that many reps … Read the rest

Key Factors in Choosing a New Principal

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Whether you are looking to replace a line, expand your line list, or start from scratch and build your agency business, there are many factors to consider when signing on with a new principal.

Let me focus on six:

  1. Fit with your agency mission statement.
  2. Buy-in to outsourced sales model from principal’s ownership and senior management.
  3. Reputation for quality products and services in your geographic territory.
  4. Excellent references from agencies in other territories.
  5. Financial strength.
  6. Commission/compensation plan.

Let’s drill down a bit deeper:

1. Fit With Your Agency Mission Statement

Sounds self-explanatory; but easier said than done in my experience. … Read the rest

Regular Communication Pays Huge Dividends

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Keeping your agency “out there” is a great tool for success in the rep business. I send out Christmas/Holiday cards. Mine are a bit special. They contain four pages of photos from the past year along with a few lines of copy underneath.

The response to the cards is quite remarkable. People actually read the little captions on the photos. A picture definitely does say 1000 words.

I get phone calls from people I haven’t seen in person in years. I get emails. Once, I even got a handwritten note from an old friend.

What does this mean to your … Read the rest

How to Build Trust by Managing Customer Expectations

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Are you noticing how customers are becoming more demanding? When managers bring me in to deliver customer service training for their teams, one of the most frequent concerns they share is how customers seem to be angrier, more frustrated, and more rushed than ever. But is that really true?

My experience over the 30-plus years that I’ve been speaking and training on the topic is that customers aren’t necessarily grumpier. It’s that they occasionally receive service that’s faster than expected, like Amazon’s overnight delivery. And they’re also doing business with organizations like Uber that report real-time the driver’s location, and … Read the rest

Significantly Increase Sales by Practicing

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Every sports team practices — not just the pros. College, high school, pee-wee, shoot I remember my Pony League baseball team practicing when I was five years old. Add to this the fact that many, if not most, professionals practice. Would you want a heart surgeon who hasn’t practiced on cadavers, and in many other ways, shapes and forms, doing open-heart surgery on you? Of course not. Actually, in that case, you’d hope that they not only had tons of practice before their first surgery and between the others, but you’d also hope that they got lots of game experience … Read the rest

Are Outside Salespeople Obsolete?

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One of my clients recently asked me: “Are outside salespeople obsolete?” He is the CEO of a distributor that specializes in automation equipment. He had just lost three field salespeople and was thinking about replacing them. “What kind of person should I look for,” he asked, “in light of the recent and radical changes in the economy?”

While his need for a solution was urgent, the question he asked is one that every B2B sales leader should be asking in the next few months.

Outside Sales

For generations, outside salespeople thrived on face-to-face relationships. Their approach to the job was … Read the rest

Launching an Independent Manufacturers’ Rep Agency

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My rep agency was founded in 1975. Communicating with customers and manufacturers was by telephone and “snail mail.” There were no internet connections, emails, or cell phones.

During my high school and college years, I worked for my father’s construction subcontracting business each summer. My father had business friends who were independent manufacturers’ representatives. They each earned excellent incomes and enjoyed the freedom of owning their businesses. Since my father owned his company, I thought I would also like to own my business. The independent manufacturers’ rep business intrigued me.

After graduating from Lehigh University with a degree in industrial … Read the rest

Evaluating Goes Both Ways

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Whether manufacturers know it or not, their reps are constantly evaluating the profitability of their lines. This can be done formally via a structured line profitability analysis or informally with the rep actually measuring how much time he spends on a line and then asking himself if it’s really worth the effort. Depending upon the analysis of accumulated data, what inevitably can result is a parting of the ways.

Two reps recently reported to us the results of their decisions concerning some of their lines. According to the first rep, “Ours was a fairly simple decision. We contacted two of … Read the rest

Best Practices for Virtual Selling

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Virtual selling is any form of selling that occurs without the buyer and the seller physically present with each other in the same room. Telephone, text, email, Zoom — it’s all virtual selling. Since virtual selling, in that sense, is longstanding, there’s no reason to think negatively about it.

The first key to successful virtual selling is to accept the fact that selling fundamentals don’t change just because you’re using a communication tool that is new to either you or the prospective client. The medium used to communicate with your target audience is just that — a medium. Your product … Read the rest

Never Agree to Go to Timbuktu to Collect Your Commissions

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The Problem

Many of my clients represent principals based in foreign countries. Most of them represent automotive parts manufacturers. The automotive industry is a global industry. Many principals are based in Europe, China, Japan, India, Korea, and other countries. One of the topics in the negotiation of the sales representation agreement is often the state or country that will have jurisdiction and venue in the event of a dispute. Many principals will attempt to include a provision requiring any disputes to be resolved in their home country. I strongly recommend that any sales representative located in the United States or … Read the rest