Communication between reps and principals can be challenging. Continually practicing good communication interchanges augmented by a well-developed trust relationship are inherent to success when the chips are down.

Let’s look at a common situation.

Principal to Rep: “What’s happening at the ABC Company account? I see sales are declining.”

Rep to Principal: “Lots of good stuff happening there, but my competitor, who is a rep for your biggest competitor, is breathing down my neck due to your price position.The business is in jeopardy ”

Interpretation —

Principal to Rep: “What are you doing for me at ABC Company?”

Rep to Principal: “Is your manufacturing operation staying competitive, so I can avoid losing the business?”

This scenario is often the opening to discussions between the rep and his principal about their biggest mutual concern — retaining their customer’s business. Their previously-established relationship, or lack of one, will almost predetermine the outcome.

A major problem can occur at this juncture in the conversation if a solid communication relationship has not been established between the rep and the principal. With the conversation at this point and business on the line, it’s far too late to develop an understanding of how the rep-principal relationship needs to work. That knowledge should be embedded in the rep-principal DNA very early in the business relationship. Constant discussions about what the principal expects from the rep at ABC Company must occur. Goals should be established. Targets set. Expectations developed. These conversations are most often initiated by the rep as he is closest to the customer and is focused on the customer’s needs and expectations. He is in a very strong “advisory” position to the principal while simultaneously acting as an advocate for the customer. The rep needs to “sell” his principal that he has management responsibility at ABC Company and takes that responsibility seriously. The principal must trust the rep and rely on him in the role he plays.

Let’s establish the roles of each party. Everyone in this relationship must understand that their goals are congruent, but they are approached from entirely different positions.

The rep is an independent contractor who must maintain the separation between his agency and his manufacturer’s business. Yet the rep must be able to speak authoritatively and negotiate forcefully for the manufacturer, as if the rep were an employee. The rep is the manager of the relationship with the customer in his territory. Reps protect that relationship at almost any cost, because it helps define the value of the customer advocacy role the rep has with his customers.

The principal, on the other hand, is driven by manufacturing concerns and his position in the larger market. He often has other reps and customers’ business and price points to consider in his decision process. His business relationship to all the customers is through the reps, and he must trust their business skills .

Maintaining the relationship while having the freedom to critique each other’s performance and maintain the separation of each role can cause difficult discussions. The core issue of arriving at a unified position, while maintaining the individual relationships, is direct and open communication-based trust previously established.

Establishing successful direct and open communication involves developing a trust relationship between the rep and the principal at the very outset of their business relationship. Without trust, open communication becomes difficult at best and is subject to endless searches for secondary agendas. That foray takes both parties into unproductive areas and away from solving the actual problem.

With trust in the communications, the rep/principal discussion is able to focus on the issues and get a set of actions established, which will be beneficial to both parties. Trust changes the dynamics for the rep because he now has the confidence that the action he will take with his customer will be supported by the principal. The principal has confidence that the action his rep is requesting is justified by the rep’s knowledge of the competitive situation at the customer.

With trust in the communication, the rep/principal scenario that we saw at the top of this editorial might sound like the following:

Principal to Rep: “Your sales reports about our competitive position at ABC Company are very similar to reports we are getting from our other reps across the country. Therefore we have reevaluated our manufacturing costs and changed our price point on these items.”

Rep to Principal: “I appreciate your letting me know that. I will initiate a new quotation to our customer to establish new pricing immediately. Thanks for trusting my analysis of the situation.

Interpretation —

This dialogue was courteous, effective, and demonstrated the previously-established trust relationship.

The need is for the rep and his principal to constantly build trust, so that these kinds of direct solution-based discussions can occur. The building occurs through solid communication followed by solid action.