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One of the real benefits of attending and participating in industry-specific trade association meetings is the networking opportunities that present themselves. In addition to the obvious benefit of being able to meet industry peers is the opportunity to ask questions and get real-world answers to those questions. Obviously that means attendees don’t always have to “reinvent the wheel.”

As reported by one manufacturer, that point was made late last fall when he was in the midst of making the move from a direct to an independent manufacturers’ representative sales network. The manufacturer made the move armed with the mistaken belief that doing so he wouldn’t have to go through the process of budgeting for sales as he did when he sold direct.

Thankfully one of his non-competitive manufacturer friends set him straight. According to the manufacturer, here’s what he was told: “Just because you don’t have a payroll and all the tax details that you have with a direct sales force doesn’t mean that you can forget budgeting for sales. Sure, your reps will handle the details of their own business, but in order to support a rep sales team, you still have to budget for many of the expenses you had with your own salespeople:

• Trade shows.
• Sales literature and advertising.
• Samples.
• Field trips to work with reps in their territories.

“These and other expenses must be budgeted. If you don’t budget for them, a lot of the effort your reps put forth will be watered down by a lack of solid follow-up. So, yes, budgeting for sales is just as important when selling through reps as it is when you sell with a salaried sales force. In fact, most reps are willing to give you some guidance as you do your budgeting. Remember, many reps got their start in corporate sales departments. And many were senior sales executives with budgetary responsibilities before they started out of their own. So, if you have any question, ask for help.”

The Importance of Meeting the Team

The regional sales manager for a manufacturer was initially taken aback when he offered his line to one independent manufacturers’ rep because the rep had a condition that had to be met before taking on the line. “Admittedly, we’re a ‘B’ line, but we’ve got a sterling reputation, we’re a solid performer and the rest of our reps love working with us.

“When we offered the line to the rep, he responded that he was certainly flattered and was interested and serious about working with us. However, he continued that he could not accept the line until he had met with our CEO. At first, I’ll admit that I was taken aback by what I thought was the rep’s arrogance. That all changed when the rep explained about the importance of chemistry in the relationship. The meeting was set up, the rep and the CEO met and the rep is on board. He’s been with us for two years now.

“This whole experience has driven home the point for me that everyone involved should speak with each other before tying the knot. Following that process I’m sure there would be far fewer defections and terminations if everyone took the same precautions that they took when hiring a senior executive.”

Surprise at Commission Cut

There was more than a little surprise on the part of one manufacturer when one of his reps came forward with the suggestion that his commission be cut by 10 percent. Obviously this suggestion has to be explained.

What the rep was asking for was in return for the commission cut, that the manufacturer undertake a local trade show and advertising program in the territory. The agent, a former corporate sales manager himself, wasn’t really doing anything stupid. He knew the economics of the situation and what the return would be for him if the shows and advertising were undertaken. The manufacturer said that after thinking over the offer, he loved the rep’s idea and the fact that he showed such confidence in himself. He went ahead with the deal, but with a bit of a change. “If the rep was willing to give up something, I knew I had to cooperate — so I did, but only to the tune of a five percent cut — and for only one year.”

Solving the Competing Line Problem

When a manufacturer goes through a number of mergers and acquisitions, the concern usually crops up with the fact that reps wind up with the problem of how to address competing lines. Here’s how one manufacturer recently addressed and met that challenge.

“After a round of merger/acquisition activity, instead of manufacturing just one line of products (which was sold by our direct sales force), the new larger organization was faced with the task of taking several different — but related — products to market via our existing direct network and a network of independent manufacturers’ representatives who sold other product lines.

“If we had any question about how this task was going to be completed, our customers provided us with the answer. With a resounding voice, they said they didn’t want to be called upon by more than one salesperson. The resolution came with the following proposal that came from our direct sales force. They offered to leave our employ and form agencies with the manufacturer as the first product line. So far, everything has gone well and we’ve even taken the step to help many of the newly formed agencies get additional product lines. Most of them are making more money now than ever before. More importantly, our customers are being well served — and getting what they asked for.”

Getting More of the Reps’ Time

Any number of suggestions have been made in the past regarding how a manufacturer can get more of his reps’ time in the field. In general, those suggestions focus on various methods to incent reps (i.e., temporarily increasing commissions, having sales contests, etc.). However, one manufacturer offered some steps he has taken that focus more on some internal changes. According to the manufacturer, “The first thing I’ve done is to make sure that my company’s sales manager had been a salesperson himself. That ensured that he knew going in all the agents’ problems and needs. At the same time, I’ve emphasized the importance of the sales manager providing our reps with more than enough room to make their own decisions. We want our reps to always do what’s best, given the fact they they’re the ones who are out there working in the trenches. And finally, I think we’ve taken major steps to ensure that we have a spirit of teamwork. That’s critical in getting the rep to spend time on our line. If the rep feels like everyone is pulling together with one goal in sight, then the chances are they’ll be working constantly for us in the field.”

Who’s in Charge During a Joint Field Sales Call

As the national sales manager for a large company was recently looking back over his lengthy sales career, he pointed to one sage bit of advice he received from a mentor years ago concerning how to act during a joint sales call with a rep. The question posed was who takes the lead in front of the customer?

Here’s the advice he was given years ago and he maintains it’s served him well over the course of his career. “Leave no doubt in the eyes of the customer that the salesperson — the rep — is the one who is in charge during the call. It’s of paramount importance that the salesperson take care of all introductions and conduct most — if not all — of the talking. By following that course of action, the customer will follow up with the salesperson, not the manufacturer. Let the rep stay in control of the call. If the sales manager does most of the talking, the customer is receiving a mixed signal and won’t know who’s really in charge. If the meeting with the customer reaches a point where a close is called for, make sure the rep does the closing. Once more, it’s a matter of letting the customer know who’s in charge. If there are any suggestions or follow-up that is called for, take care of it after the meeting, out of sight of the customer.”

Training to Work With Reps

Following the move from a direct to an outsourced sales force, one manufacturer noted the difficulty his inside staff was having when it came to working with independent manufacturers’ representatives. “In hindsight, that was all our fault. We failed to train them properly. Early on we noticed that the biggest problem they had was in realizing that our reps were multi-line sales organizations. They weren’t in a position to drop everything and run to a customer’s office when one of our inside people called.

“Since that faulty beginning we’ve done the needed training but if we had done it earlier, the transition would have gone a whole lot easier.

“If I had any suggestion to offer other manufacturers in a similar situation, it would be to train your own people even before you take on the reps. When they understand the differences and what will be expected of them, you don’t have to do a lot of corrective training after the fact.”

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