If some reps have been better able than others to weather lengthy economic storms, it’s probably as a result of their positive outlook. At least that’s the view of Hank Bergson, former president of NEMRA. According to Bergson, president, Henry Bergson Assoc., LLC, Katonah, New York, “I’ve found that basically reps are optimistic by nature, and that’s been a great help to them in these trying times.”

“Probably owing to the fact they knew business would eventually pick up,” he continues, “reps did what they had to do a couple of years ago in order to get them through. By that I mean they got right-sized and put the right people in the right spots. They reduced salaries and bonuses while looking to develop business in new markets. Now that things are a bit better some of their cuts have been restored, but they’re still not doing a great deal of re-hiring. Bottom line, no one is being foolhardy in the face of a long-awaited recovery.”

Bergson adds that in general, “It’s probably the non-commodity reps who are doing the best right now. Having said that, you’ve got to keep in mind that what I’m talking about are usually the top-performing reps that carry premium lines. Basically, it’s all about being the right rep, with the right product line in the right territory. If that’s the case, things might be a bit easier for them as opposed to others.”

He continues that one important attribute that a rep must possess today if he’s going to survive and thrive is the drive to develop new skill sets. “It’s those reps who are paying attention to economic forecasts, and being proactive and professional in all that they do. They’re also the ones who are looking for new business opportunities, whether it’s learning how to improve their sales skills or just developing new markets such as the military, green, solar or wind farms.”

As if word from the trenches is needed to lend credence to Bergson’s view, the experience of John Moore & Associates (JMA), Nashville, Tennessee, does just that — and more.

Planning Pays Premiums

According to Troy Jennings, president, planning for what the agency was going to endure began when the economic picture was a good deal brighter than it is today. Jennings, together with his wife and brother-in-law, purchased the agency in 1999. “It wasn’t long before we began to experience the effects of the lagging economy. Looking back at what we did, it seems as if we bought in just in time to take a ride down the river.”

“As far back as 2006,” he explains, “I brought our entire group together and began making changes. I told everyone at that time that like any business we were riding an economic wave. When things are good, that’s fine, but you’ve got to keep in mind that when a dip occurs, you’re going to dip with it.”

Jennings continues, “Our rationale was that this was a discussion that was much easier to have when things were going well. If we could talk about it, plan and execute the changes that had to be made, we would be much better off.”

These were some of the subjects discussed in anticipation of operating in a down economy:

• Restructuring of the company’s bonus program.
• If positions had to be eliminated, determining which would be the first to go.
• Identifying duplication of effort or overlap of responsibilities and planning for consolidation of effort.

Jennings continues, “This marked the first time we ever prepared for the bottom of the economy while we were at the top. Our efforts didn’t necessarily eliminate the feeling of fear or the need to constantly communicate, but what it did was to allow us to move forward without using the economy as an excuse.” The rep explained that because of his agency’s early planning, bonuses remained and there were no layoffs.

Integral to all of the agency’s planning to operate through a sluggish economy was a focus on a couple of well-thought-out strategies.

New Markets

Jennings explains how JMA worked with one of his outside salespeople to develop a market it hadn’t addressed in the past. According to Jennings, “We were running into the situation where our contractors were returning products. By serving as a rep for a company that would place these products with another customer we were able to place these products with other customers and turn a profit on our efforts.”

Maximizing Synergy

“We quickly realized how important it was for us to not only work the lines we had, but also to accentuate the positives of those lines with other lines we represented. When we’d go into a customer, we made it a point to speak of all the related lines together. We did that principally so that our distributor customers wouldn’t have to do that for themselves. We did the work for them. On any given sales call, we’ll focus on two or three product lines and educate the customer as to how it will meet his needs.”

Personnel Training 

“When things were good,” according to Jennings, “all some outside salespeople had to do was open their mouth and wait for a cooked bird to fly in. With the challenges presented by the economy, that’s hardly the case today. We used technology as a training tool and we trained our own people, upgrading their skills, so that they’ve become a sales force that can actually train itself.”

Jennings concludes by noting that all the steps taken by JMA have better prepared the agency to take advantage of what he terms is an improving business climate. “What we’re experiencing now certainly doesn’t compare to what we had at our peak, but 2011 turned into a much better year than we expected. In addition, 2012 holds much more promise because of what we’re doing and where we’re located.”

Taking a Proactive Stance

JMA is hardly the only agency that sought to navigate a turbulent economy with a carefully-laid-out plan. Taking an especially proactive stance in the face of negative economic projections was Mike Parham, PEPCO Sales Company, Irving, Texas. Parham explains that “If anything, I’d say we got our foot deeper within the market segment we already had a foot in. We were already into new residential construction. We now have a heavier presence there and continue to get heavier on the commercial side.”

In terms of what changes the agency made in order to improve its profile, Parham, who serves as AIM/R’s chairman, explains, “We acquired two more agencies in 2010. One is in plumbing and the other in HVAC. We added people, and also expanded by adding a training center in Houston. That was done so we could conduct more in-depth training sessions for contractors and distributors. I’d say that, in general, we took a very aggressive stance while everyone else was downsizing. At the same time, we continue to look for additional opportunities wherever they present themselves.”

Commenting on how these steps have affected the agency, Parham explains, “I’m pleased with the way we’ve performed. Our level of performance and professionalism has never been higher than it is today. Having said that, however, business is really just okay. The economy still has a long way to go. Sure, we all wish it would get better right away but the fact is it will just be a grind for several years into the future. It will take all of us a while to get out of where we are. There’s too much debt; there are too many people who really don’t know the rules of how to conduct business. From a personal and corporate perspective, there are too many people who don’t understand what the taxes are going to be. As a result, various business decisions are being held up. If you don’t know the tax rules, all you can do is just move ahead quarter by quarter. But if you’re going to do that, you had better have a good strategic plan and good communications. I guess what I’m saying is that you’ve got to plan, hold people accountable, and be professional. If you do all that, then you should be fine.”

Avoid Damage to Relationships

Mark Creyer, president of AIM/R, reports that he has heard about changes association members have had to make in order to get through an unforgiving economy. “At last fall’s AIM/R conference we heard about reps re-addressing how they were conducting business. It was not unusual to hear about agencies cutting personnel, cutting or at least putting a cap on a salesperson’s mileage, cutting back or eliminating outings, etc.”

In the face of how they are adjusting business, however, Creyer, L&R Associates, Inc., Hatfield, Pennsylvania, admits that some steps could cause harm to the rep-principal-customer relationship. “Sure there’s always the danger of cutting off your nose to spite your face. That’s why important changes should only be made after communicating with principals and customers. Everything you should do should be transparent so no damage is done to the relationships.”

In the face of these changes in the way business is conducted, he notes the personal relationships that serve as the foundation of a rep’s success could take a hit. “At the same time many of our customers have downsized to the point where they don’t have the people or time to devote to sales calls. That’s why it’s perhaps more important today for reps to know their customers and how they want to be served. Many of them prefer the Internet and phone to the personal visit. If that’s the case, then accommodate them accordingly.”

What havoc the economy has wreaked on business in general and reps specifically, Creyer, just as Parham does, stresses how important it is for reps to be professional. “Have a business plan and work the plan,” he advises. “It’s the truly professional rep who is going to survive and thrive. Those who aren’t professional will simply go away.”

Creyer adds that in the face of all the challenges offered by the economy, “I love the work I do and am glad I’m a rep. As I look forward, I remain optimistic even though we’re probably never going to see growth like we’ve had throughout the 80s and 90s. We’re simply going to have to work harder for smaller profits.”

A bit of a different economic view is provided by Mike Richie, CPMR, J.T. Chapman Co., Houston, Texas, who explains, “We cover 16 states from St. Louis all the way to the West Coast. Compared to others, we’ve been pretty lucky. While we may have tightened our belts a bit, we haven’t laid off anyone. Surprisingly, here in the south we haven’t seen that much of a drop in business. The oil business remains very strong and has even gotten stronger. While we may have taken a bit of a hit in California, our business in Denver and Salt Lake City continues to grow.”

He adds that even though business has continued strong, “We’re always looking at different markets (e.g., meat and poultry in the Midwest, agricultural in California, oil business here) for business opportunities.”

Interestingly, he relayed a few of the economic views that were offered to attendees at last year’s PTRA Annual Conference by Alan Beaulieu, president of the Institute for Trend Research. Beaulieu, who has spoken at MANA, AIM/R and PTRA events in the past, said that he sees economic activity as flat through the end of this year and doesn’t see an economic recovery until halfway through 2013. At the same time, he’s not envisioning a recession or a double-dip recession in 2012. He concluded his remarks by noting that “there’s a lot of people sitting on top of a lot of money because of a lack of leadership from Washington. Many people are concerned tax-wise and won’t make a move until they see a clear direction from the Nation’s Capitol.”

Richie maintains that he — just as the other reps interviewed for this article — remains optimistic about the short- and long-term economy. “I’d maintain that the majority of the country has weathered the worst of it. Based on what I’m hearing from other reps (specifically PTRA members) they’re seeing some light at the end of the tunnel.

“Basically I’d typify their outlooks as optimistic but guarded. They’re seeing business in a better light than they did previously.”