When MANA members considered whether they had a responsibility to educate principals new to working with an outsourced sales force, caution was advised. In response to the question, “Is it a red flag that a potential principal has no experience working with the rep business model?” participants in a MANAchat responded with a resounding “Yes!”

In the chat, conducted over a week with 26 association members participating, some cautionary words were heard, however:

• “If a manufacturer has performed his due diligence (and, why wouldn’t he do that?) before approaching an agency, you’d think that they’ve educated themselves about the ins and outs of working with reps; but that’s not always the case. So, sure, the manufacturer bears some responsibility for educating himself, but if he hasn’t, we’ll take the necessary steps to educate him and point him in the right direction — if we feel the line is worth the effort.”

• “We’ve been faced with this situation a number of times and each time we’ve had to make a decision whether to proceed. Should I take the time from my other lines to educate this potential principal? What’s my return on investment (i.e., my time, money and effort) going to be? I’m well aware that my responsibility as a MANA member is to educate manufacturers who aren’t accustomed to working with reps. I do recall one time when we made the extra effort to work with the manufacturer. As a result of our approach, they wound up having a much better understanding of how to manage the care and feeding of reps. They actually went on to hire additional reps after we had educated them.“Sometimes our approach works, other times it doesn’t. It’s all about weighing that extra effort to get them to where they need to be.”

• “We get that a lot. It’s all about a manufacturer thinking they’re going to get a free sales arm for their organization. Years ago, when we first opened our agency, we were more willing to educate manufacturers, but now — not so much. When we did educate them, we really didn’t have a written plan. It was more of a process that would familiarize them with critical matters. We’re at the point today, however, that we don’t even look at a manufacturer that doesn’t have experience working with other reps. We’ve found that it’s too time-consuming to educate them on the nuances they’re going to have face.”

• “If anything, it’s definitely a red flag. When that flag is raised, we are faced with the decision of whether the line in question is going to be worth our effort in educating the principal.”

Categorizing Manufacturers

With those comments as a start, the chat discussion went on to categorize manufacturers that work with reps into three categories: those that have a full understanding of working with reps; those that were new to reps, but open to learning how best to form and maintain a partnership; and finally, those new to reps, but not willing to learn how to do so effectively.

Chat participants agreed that the first and third groups were relatively easy to deal with — with the former, partnerships are easy to establish; and with the latter, as one rep explained, “We simply walk away from them.” It’s with that second group — those not familiar with reps, but willing to learn — that a plan or process has to be employed.

A number of approaches were described to address this situation including one rep who explained, “I’m a member of a task force that created a one-page rep-principal expectation sheet. It simply spells out expectations for both sides and covers what things to speak to so you don’t run into problems down the road. Examples of what we include are commissions and other payments, traveling on behalf of the principal, joint calls, marketing expectations, joint sales calls, etc. It’s all about getting principals and reps together in order to create better synergy.”

A second rep explained, “This is something I run into every time I bring on a new principal. I’d maintain that it’s ultra-critical to establish the ground rules of your relationship before you get to the contract. Once that’s done, I have an onboarding process that I employ. I feel there are a number of things I have to re-emphasize for the first year of our relationship. I do that until we get into some sort of rhythm to the relationship.”

Getting Close to the Principal

Educating your principals can have an added positive result, according to another rep. “If you have a well-worked-out program, you might find that a side benefit is that you can get much closer to your principal. Ideally, they would assign one or two of their people to manage the rep program. In working with them and letting them know what reps do for them, you can then encourage them to spread the word among other members of their organization. You might find yourself in a preferential position with the manufacturer. He’ll see you as an advocate for his company. I’ve had this happen to me.”

The need for educating manufacturers isn’t a problem with their frontline personnel, according to one rep. “What we find is that the people we have to deal with on a daily basis are generally fine. The problem occurs either upline or with new inside support personnel, or the new regional sales manager, all of whom simply don’t understand the rep business model. They really don’t know what a rep is; they think we’re either their customers or re-sellers.”

Taking the Initiative

To counter that one rep is more than willing to take on the job: “We’ve got to take the initiative when it comes to education because we’re the experts — not them. One step I’ve found that’s especially effective is to take a new principal out the field with me and have them meet with my distributors. The distributors are hardly bashful when it comes to letting manufacturers know what we as reps and they as customers need.”

Among the tools several chat participants have used to familiarize principals with working with reps is MANA. “If you tell them to take a look at MANA and they do it, that generally solves the problem,” was one rep’s advice. Also, it was mentioned how valuable the “Steps to Becoming a Quality Principal” program, which can be found on the association’s website, is and the circulation of articles from Agency Sales magazine have also been in reps’ steps to educate their principals.

Another effective approach that reps have successfully employed is the use of strategic planning sessions with their principals. “These annual sessions have always gone very well, and they cover issues and open discussions that head off serious problems.”

One of the major topics chat participants mentioned was the need to inform manufacturers that in order to work effectively with reps, they have to have some “skin in the game.” “Here’s how that subject comes up,” noted one rep. “We’ll start talking with a manufacturer and they let us know how anxious they are to gain a foothold in our territory. What it comes down to is that they want our expertise, but they don’t want to give up any revenue.

“It’s obvious that this is an early indicator that there might be some difficulties in the relationship. What we look for is a shared territorial development that shows the manufacturer is willing to invest in the joint effort. It doesn’t have to be a big number but the manufacturer’s willingness to participate is an indicator of his maturity when it comes to dealing with reps. If he says ‘No, I won’t pay,’ that’s an indication that he isn’t really interested in working with reps and doesn’t want any of his skin in the game. His agreement to accept such a fee, for a defined period of time, for a defined amount, is a recognition that this is part of his responsibility. I’d add that locking him into such a fee provides him with a guarantee that he’s getting some value from the rep in return for his investment.”

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List of MANAchat Participants

MANA wants to thank the following members for their contributions to “The Need to Educate Principals” Agency Sales magazine article. These online virtual meetings create a platform where members exchange information on how to successfully operate their manufacturers’ representative businesses. Jack Foster, Agency Sales magazine editor, wrote the article using the information and knowledge these members provided during the MANAchats.

Thank you! We sincerely appreciate the time you took to participate in the MANAchats and particularly the information and knowledge you shared.

Joel Geisel
Components In Motion, LLC
Shakopee, MN

Jon Russell
Datacom Sales, Inc.
Grand Prairie, TX

Dan Bendell
Divine Industrial Sales, Inc.
Chanhassen, MN

Lance Helfers
Don Helfers & Associates, Inc.
Chesterfield, MO

Nolan Dwyer
EAS-Engineered Assembly Solutions, Inc.
Alexandria, MN

Michael Fontaine
Falcon Project Consultants
Houston, TX

Jim Hwang-King
Health Kare Associates
Monument, CO

David Ice
Ice & Associates, Inc.
Lawrence, KS

Keith Ahlborn
K.H. Ahlborn, Inc.
Burr Ridge, IL

Matt McCroskey
McCrosco, Inc.
San Clemente, CA

Jeff Busse
OEM Associates, Inc.
Buffalo Grove, IL

Mike Barbay
Peneguy Equipment Co., LLC
Baton Rouge, LA

Rick Pierce
Pierce Marketing, LLC
Dayton, OH

Warren Hardy
Pirozzi & Associates, Inc.
Upton, MA

Eric Farst
Rep Com International
Arlington, TX

Bert Merritt
Rep Com International
Arlington, TX

Rick Rudolph
Rick Rudolph Associates, LLC
Melrose, MA

Stephen Williston
S. Williston Sales Co., LLC
North Kingstown, RI

Dicky Yee
South Coast Group
Huntington Beach, CA

Catherine Stephens
Frisco, TX

Owen Swift
Swift Scientific, LLC
Coventry, CT

Charlie Badzik
Technical Marketing Specialists (TMS)
Greenwood Village, CO

David Pasquali
Technical Products & Services, Inc.
Blairstown, NJ

Dan Monaco
Technical Products, Inc.
Orlando, FL

Marilyn Kahler
Tri-Fab Solutions
Scottsdale, AZ

Bill Westover
W.J. Williams Co., Inc.
Beachwood, OH

Richard Wickizer
Wickizer & Associates, LLC
Woodland, WA

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