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How do you know that an agency is right for your company? That’s the question posed to four MANA manufacturer members and their responses provide some valuable guidance to other principals searching for that right fit for their companies.

First up, the national sales manager for one company explained, “Recommendations from existing sales reps are key in our decision-making process. After we gather the names of potential reps we’ll often call their references and principals to confirm their capabilities. We look at this as just a normal part of our due diligence — it’s hardly an invasion of privacy.” He added that his company has done very little when it comes to using rep search companies. “We’d only do that as a last resort.”

The sales manager for a Midwest manufacturer continued the discussion when he said, “We will always check the MANA Online Directory and our industry-specific rep directory to look at some of a prospect’s specifics. In addition, we also consider a rep’s membership in MANA or an industry-specific rep association as a real plus. That shows us that they’re serious about their profession and have taken steps to associate with others who are like minded.”

After that relatively cursory directory check, “We make every effort to personally speak with at least four of the rep’s existing customers. What we’re looking for there are obviously their recommendations, thoughts and concerns. Once that’s done, we’ll contact consultants or other third parties who might be less biased than our customers. And, finally we talk with other principals that the agent represents in order to assure that there are no conflicts. Once we narrow the list down, we’ll interview the short list of reps in person — in their place of business.”

Continuing the emphasis on the importance of input for existing customers, another manufacturer notes, “We’re always sure to contact current area customers for their input. What we’re looking for there is:

• Synergy of the rep’s product lines.
• Territory coverage.
• Agency history with comparable lines.
• Current line conflicts.

“And perhaps most important in our process is that we’re sure to conduct at least two face-to-face meetings prior to any conclusions. The latter is important for us because it’s people who sell things and personal chemistry is important. These in-person meetings between agent and manufacturer and customer still carry significant weight. I can’t expect that any agency that can’t sell me on their capabilities will have any luck in the field selling my products.”

And finally, it’s a letter that the last manufacturer makes use of to help him start the determination process. The letter in question asks a prospective agent to inform the principal of their history, mission, plans for new products, personnel, etc. “Once we receive the answers to those and other questions, we conduct a review by phone and finally a personal meeting. When we have the information we feel we need, we’ll make the move toward a final contract.”

He adds, “We feel the approach we take not only elicits valuable information, but it also sends positive signals to any rep who might want to be part of our rep selling team.”

Questions That Need to be Answered

Well into a lengthy career with a manufacturer, the national sales manager for a company described how he had been present at the time his company made the change from a direct sales force to one partnering with independent manufacturers’ representatives. “What we went through was hardly an easy task as we found that there wasn’t a large inventory of agents who were familiar with our product line. With that as our introduction to reps, over the years we’ve been able to develop a number of questions we feel agents have to be able to answer if we are going to work together.”

Among those questions that he volunteered were the following:

• What is their sales philosophy? — “Approximately 85 percent of our sales come through distributors. As a result, our agents must work with and instill loyalty throughout our distributor network. If there’s no belief in each other’s abilities, there won’t be many successful sales. In addition, we also attempt to determine how an agency’s other principals view direct vs. distributor sales, which helps us shed some light on how the agent is accustomed to conducting business.”
• What does the future hold for the agency? — “Does the ownership of the agency have plans to grow or add more personnel in the field? If the agency is a recent startup, does it have the contacts and financial ability to endure the ‘tough’ times while growing through the good times?”
• Agency ownership background — “Do the personnel of the agency possess an understanding of the products that we manufacture and do they know how customers will make use of our products?”
• Territory potential? — “Our experience has been that because of the size of the territory when covered on a direct basis, our coverage was more limited and we really didn’t have knowledge of its full potential. By increasing coverage via agencies and considering the amount of thought put into their view, we seek to achieve a more accurate indication of how well the agent might know his territory. On the other hand, an inordinately high estimate could very well be an attempt to give us what we want to hear.”

Taking Quick Corrective Action

When a manufacturer who six years ago made the switch from a direct to an independent agent sales force was asked to describe the process he experienced, he surprised two other manufacturers by relating how all didn’t go smoothly at the beginning. According to the manufacturer, “Our first step was to hire a marketing manager to preside over the switch from direct salespeople to a rep sales force. He arrived with us complete with great credentials and recommendations. However, when we discovered that his plan to get the job done included the recruiting of agents of our competitors, we suggested that he find other employment. We quickly hired another marketing manager and now the rep force we’ve created is one of the best in our industry.”

Recognizing Contributions

“Everyone likes to be appreciated and recognized. That’s why we’ve taken such efforts to let our reps know that we appreciate all that they do for us.” That’s how one manufacturer began his description of the fairly informal philosophy his company employs in its relations with independent sales agents. Here’s what his company does:

• Contact — “As our agency network has continued to grow, we’ve made a concerted effort to stay in touch with those agencies that have been with us since day one.”
• Recognition — “Once you get into the habit, compliments are truly an effective means of letting your reps know that you value their work. Whether it’s commenting on the success of a tough sale or the opening of an important new account, we’ve found that our reps feel it’s important to be noticed.
• Visits — “Field visits may be logistically difficult, but they pay back the effort in spades. We’ve found that our agents really value and enjoy having us work with them in the field.”
• Value Selling Time — “Do everything possible to avoid scheduling meetings during selling hours. Pre-screen advertising and trade show inquiries before forwarding them to you reps. Do that so reps don’t waste time following up on leads that aren’t really worthwhile.”
• Communicate — “Always advise reps of impending changes in price, product and personnel. Don’t let your reps suffer the embarrassment of hearing about changes while they’re out in the field.”
• Training — “Believe in training and see to it that you keep your rep network up to date with all the latest training.”
• Support — “Make sure your inside sales staff is always there for your reps. In addition, back them up with all that they need in terms of sales aids, working websites, catalogs and the latest product information.”
• Meet the Family — “Treat your reps as if they’re a part of your corporate family. Invite them to corporate events even though distance and travel schedules may prevent him from accepting.”
• Commissions — “Among the most important things you can do is to always pay your commissions accurately and on time.”

The Opposite of Motivation

If the previous item described ways to motivate a network of independent manufacturers’ representatives, how about considering the following ways to drive your agents in an opposite direction?

• Always be late in quoting.
• Don’t communicate with agents until it’s convenient for you.
• Pay commissions late.
• Regularly communicate with customers without informing your agencies.
• Waste time and effort on unproductive territory visits.
• Fail to recognize that your agent is your representative in the field.
• Allow your inside people to feel competitive with your agents.
• Don’t listen to your agents’ feedback.
• Make sure they know that you’re “The Boss.”

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