Several years ago Agency Sales published a lengthy series of articles that explored the subject of what constitutes a “Perfect Principal.” The series ran over three years and by the time it was finished more than 30 manufacturers were interviewed and profiled.

Since that series concluded in 2006, several MANA members have suggested we take another look at the manufacturer-rep relationship and examine it especially from the manufacturer point of view.

This month, we begin that effort again. If readers would like to recommend a principal that they work with for consideration in this continuing series, they are asked to contact Agency Sales editor Jack Foster ([email protected]).

It only seems natural that since the Hatco Corporation started as an independent manufacturers’ representative firm that it would go to market with reps when it transitioned to a manufacturer well over half a century ago.

It has made that transition from rep to manufacturer by working hand in hand with a national and international network of reps so well that one of its independent agents offered, “I work with a factory that is a true partner in every sense of the word. Hatco will tell you that their success is built on the independent representative model. I will tell you that it is one of the truest partnerships we have. They are a manufacturer that really listens to its reps and implements what it says it will. Hatco is through and through a 100 percent rep partner.”

Heady praise certainly, but apparently well-deserved.

A look back at the company’s beginnings shows that Hatco began as a rep firm with its founders Gordon and LaReine Hatch providing electrical supplies for customers including heating elements for water heaters. According to Michael Whiteley, vice president, sales and marketing, that background led to the development of a booster heater (“…a water heater on steroids to support commercial dish washers”). Since that beginning the company has steadily supplied the marketplace with a variety of food warming products, buffet supplies, sanitizing equipment, drop in soup wells, holding cabinets, drawer warmers, and self-serve countertop warmers. The company’s corporate offices are in Milwaukee and manufacturing facility in Sturgeon Bay, Wisconsin.

Beginning as a Rep

Whiteley continues that since Hatco traces its roots to that manufacturers’ rep beginning, it was only natural that Hatch took his product to market with reps. “He understood the many advantages of taking products to market with reps. That’s why reps were his first partners. He knew it was better to rely on reps who had long-term relationships with customers rather than to depend on direct salespeople who might have some temporary success.”

The fact that Hatco has remained true to its original plan of working with reps can be seen in a quick visit to the company website (www.hatcocorp.com). It’s there that testimony to its long-standing relationships with reps can be seen as a number of independent firms can boast of 50- and even more than 60-year partnerships with the manufacturer. (See the accompanying sidebar to read what some of Hatco’s reps say about the company.)

“We’re a medium-sized company that sells its products across 100 countries,” Whiteley explains. “We’ve grown to understand the fact that there’s value in having a person that lives in a territory. We’re aware of the fact that customers have a variety of needs and we don’t provide all the products they need to solve their problems. We know how important it is to have reps that can boast of experience with key customers and who bring a portfolio — rather than just our products — of solutions to customer problems. Our goal has been that we’re one of the top three lines that a rep will carry.

“We’ve stayed true to that business model over the years and don’t plan on changing.”

Domestically Whiteley says that Hatco works with 27 independent agencies and additional firms internationally. “Since we have such long-standing relationships with agencies, we don’t have that many occasions when we have to look for a firm to cover a territory. When we do, however, among the attributes we’re looking for are that they have the relationships we’re looking for with the right customers. They must have a complementary product portfolio in order to meet the customers’ needs. Does their line card reflect any conflicts with other manufacturers’ products? Do they have the proper staff in order to cover the territory? Do they have a test kitchen? Do they possess the facilities and technology in place?

“Having said all that, however, in reality we don’t change reps all that often. I’d say that over a period of 15 years, there’s only been four opportunities for us to interview prospective reps. And that was caused by some sort of change in the marketplace, not really with dissatisfaction with a firm.”

Rep Turn Offs

If Whiteley was quick to list those attributes the manufacturer seeks in a rep, he jokingly notes that a real turn off for him would be if a rep “…was over the age of 80, rode a horse to work and took orders on a piece of paper.” But perhaps more important, he stresses that any rep his company does business with “can’t be boring and must have a sense of humor.”

Just as most manufacturers in other industries, Whiteley admits that getting and keeping the rep’s mindshare remains an important concern. In order to alleviate that concern, he explains that “It’s a constant effort. Let’s say they’ve got four or five major lines. That means that they’ve got to serve four or five masters every day. We have to figure out the easiest and simplest way for them to work with us.” To meet those goals, he says “We pay our reps well over the industry average. We make every effort to solve their problems and don’t leave them hanging in the air when they have a question about a product or price. On top of that we’ve been cited as having the number-one customer service department by MAFSI.”

He continues that “We never run away from our reps. We want to be their emotional favorites.”

Perhaps serving as an example for what the company looks for in an independent agency, Whiteley cited what occurred during a recent field sales visit he completed in New Jersey and New York. “What I find most rewarding in a rep firm is their relationships with their customers. During my trip we had 13 appointments over a period of two days. In each one of those visits our rep knew every single person in the customers’ building — that included the buyers, receptionists and the guys who were sweeping the floors. That’s the kind of relationships you only develop from closely working with someone over the years.”

Admittedly the food service industry that Hatco serves is a bit different from the OEM business that so many of MANA’s members work in. However, Whiteley acknowledges that the food service industry possesses many similarities to the concerns of other industries that reps work with. For instance:

• Succession Planning — “Our interest in our rep firms’ succession plans is a major focus for us. If, like us, you’ve got relationships with rep firms than span 50 and even 60 years, chances are you’re going to have rep firms with a good number of people who are 50-plus years old. We want to be assured that within those agencies there’s a viable group of 30- to 40-year olds that are well-equipped to help them through future planning. We want to know that a reasonable investment is being made in the firm and we ask them to share their structured business plans with us on a yearly basis.”
• Pioneering Work — “We don’t have an established policy when it comes to pioneering or shared territorial development fees. But what we have done is to have a reputation for constantly introducing new technology into the industry. When it comes right down to it, some reps have a real passion for pioneering work and there will always be others that just want to sell the same old stuff out of the catalog. To encourage work with new technology we do a great deal of training and offer attractive incentives to encourage new product sales.”
• Training — “When it comes to product training, we’ll bring in 50 people (our reps and some of their dealer personnel) for a week every month. There’s a good deal of classroom work and included in our training is a lot of cooking, eating and more cooking and eating.”
• Communications — “On the subject of communications from our reps, we don’t want to know about everything they’re doing. What we are interested in are the big opportunities that they’re working on. We would like monthly reports from the agency principals, but what we’re looking for are short and to-the-point reports. From our side, we put out a monthly electronic newsletter that lets them know what’s new, what’s happening with the service department, and any other breaking news.”
• Importance of a Rep Council — “Our rep council is made up of seven members from agencies big and small, east and west. We meet on-site, annually, for two full days. We pay for the travel and lodging. When it comes to the agenda, they own the first part of it and they discuss matters among themselves. We own the back end and find that most of the conversations we have are in alignment with what they feel is important.”

Whiteley notes that he feels the reps appreciate the efforts of the rep council. “We’re always focused on what we can do better together.” He adds that the company skipped one meeting a couple of years ago, because things were going so well. “The next year, all the reps let us know they wanted to meet again. That’s what lets me believe they appreciate the existence of the council.”

In conclusion, Whiteley says that his company’s long relationships with reps in general, and so many reps firms specifically for so many years, leads him to believe, that “Any manufacturer has to look at what brings the better return when it comes to taking products to market — a direct sales force or independent manufacturers’ representatives. I have to go back to the argument that if your company’s product portfolio doesn’t represent everything that the customer needs, it makes much more sense to work with reps. They’re the ones who bring that bundle of products to end-user customers that efficiently meets all their needs.”

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What Reps Have to Say

Independent manufacturers’ representatives that work with Hatco Corporation are hardly shy about boasting what it means to their agencies to be aligned with the company. Typical of comments offered by reps that can be seen on the Hatco website are the following:

• “Hatco has always held a keystone place on our line card. Representing Hatco equates to end-users automatically opening doors for us — this has become all too rare in the industry. The representative carrying Hatco is always associated with having quality products, possessing a high level of product knowledge and having the moral courage to do what is right in tough situations.”
• “Representing Hatco as one of our lines is like having a large department store as the anchor to a mall. It is what drives customers to us. It is the cornerstone of our rep firm. It brings us status and respect by both our customers and other manufacturers as someone that deserves to represent the best company in the industry.”
• “Hatco has been a fantastic partnership for all of us since we joined forces in 2004. Hatco gave us the opportunity to move into different sectors of the industry and to add a truly world-class manufacturer and brand to our portfolio which moved our business on to the next level. It also gave us the platform to work with global chains and form relationships with other reps around the world which remain strong to this day. The Hatco family is a credit to the brand and its history. The support we receive is second to none and the culture is one we aspire to.”

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