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One manufacturer was fairly quick to back track on its decision to move from an independent rep sales force to direct salespeople. About 18 months after making the change the manufacturer went back to its time-tested and successful rep model.

According to the company’s sales manager, “We initially thought that we were at a point in our growth where it was economically justifiable for us to take our sales direct. To say we were wrong is an understatement. Not only did we come face-to-face with the economic problems just about everyone else has encountered, but we learned that there were a number of other mistakes in our thinking.”

Perhaps the most important was the fact that the company began to lose contact with its customers because its direct sales force was never as present and attentive as its reps had been in the past. The sales manager went on to enumerate some of the points that were large contributors to his company decision to move back to reps:

• Commitment — “When we put our direct sales force in place, one of the major problems we faced from the beginning was that without exception, the salespeople were looking to move up in the corporate organization. Not so with reps. They have always exhibited a long-term commitment to the territory and the customers in the territory. That approach puts the interests of the customer first in the salesperson’s list of things to do.”
• Efficiency — “It didn’t take an awful lot of time to learn that reps were the most economical and efficient means for us to bring our products to market. The fact that reps can execute multi-line sales calls opened many more doors for them (and us) than the one-product-line approach of our direct sales force.”
• Relationships — “When we replaced our reps, we lost the established, stable relationships our customers had with someone who truly understands our culture and practices in the territory. In addition, our reps have always been better at bridging inter-departmental communication gaps than our direct sales force.”
• Advocacy — “In our experience, reps simply do a better job of fighting on behalf of the customer. They advocate for the customer at higher levels with our organization. The direct salespeople really didn’t seem comfortable going over the boss’ head. The rep readily did what had to be done.”
• Consultative Selling — “The consultative selling approach possessed by reps emanates from their understanding not just of our specific products, but in the way that product needs to relate to the other elements of the customers’ projects. They are true solution providers for all of the customers’ problems.”

Valuable Advice From a Peer

A manufacturer counted her good fortune late last fall when she related her encounter with another non-competitive manufacturer experienced in working with reps. According to the manufacturer, she was experiencing some difficulty in making a choice between two rep agencies. “In my opinion, I’ve done more than my due diligence when looking to fill a void in one of our territories. I solicited interest from prospective reps, contacted the industry-specific rep association for advice and ultimately interviewed three agencies. The interviews allowed me to eliminate one agency, but now I have to choose between the two and that’s where I’m sitting right now. It’s a close call and I don’t want to make a mistake. I’ve put a lot of time, expense and effort into this decision and it’s an important one for me and for our organization.”

When we say the manufacturer found herself in the right place at the right time that’s because the manufacturer she was speaking with had some experience and could relate to her difficulty.

The second manufacturer offered, “When you say you’ve done your due diligence, I hope that includes:

• Checking with some of your manufacturing peers who know these agencies.
• Checking with some of your other reps who might know these agencies.
• Do the agencies have synergistic lines?
• Do they have succession plans? Are they willing to share them with you?
• Do they have business plans? Are they willing to share them with you?
• Are they active members of their industry rep associations?”

He concluded, “If you’ve covered all those fairly basic bases, then don’t be afraid to go with your gut. Was the chemistry good between the two of you? Is the agency and its personnel the kind of organization you feel you can develop into a long relationship? If the answers to those last two questions are positive, let your business instincts take over and choose the one you feel most comfortable with. And, good luck!”

Defining Who and What a Rep Is

It’s not all that common that the terms “independent manufacturers’ rep” and “outsourced sales force” appear with any regularity in the wave of sales books that have been sent to Agency Sales over the years. That’s still the case; however, how does the following serve as a perfect description for what a manufacturer should be seeking in its independent rep network?

“Strategic solution sales profession: Sales professionals who are customer-centric and help the buyer understand the solution’s impact and value on its business. They impact politics within the client organization and have vast and deep industry knowledge. They are able to collaborate on the business case, not just return on investment (ROI), but the political and personal impact of not fixing the problem. They have polished communication skills, can read situations quickly and act accordingly, and understand and know how to execute strategies. Strategic solution professionals can adjust to any level (business or product), and they are always honing their skills and looking for ways to improve and get even better.”

FYI — Those words appeared in Selling for the Long Run, by Wendy Foegen Reed, founder and CEO of InfoMentis, Inc.

Value in the Manufacturer’s Words

In case there is the mistaken belief that communication is important only from the rep to the principal, one manufacturer maintained that he believes what the manufacturer has to say to his independent sales force is just as important as what the rep has to put forth. According to this manufacturer, “If we want the rep to regularly tell us all that is going on in his agency and the territory, then why wouldn’t we see the importance of reciprocating by telling him everything he needs? For instance, what happens when we’re introducing a new product? Shouldn’t we tell him well in advance? Let him know exactly whom we’re targeting with the new product effort? Shouldn’t we share with him what we believe our goals are in the future? “I’ve got to believe that our efforts are doomed to failure if we just put a product out there and hope customers come to us. Why not maximize our chances for success by working hand-in-hand with our reps? I’ve got to believe they want to operate the very same way.”

A Valuable Lesson From Day One

When a manufacturer and a rep were in the early stages of their relationship, one manufacturer reports that he learned something very important as they sat across from each other. Discussing their mutual expectations, “I entered the relationship with what I thought was a well-founded expectation of fairly quickly realizing more than $2 million in business in one segment of the territory. It didn’t take long for the rep to let me know there was much for me to know and understand. Thankfully he took the time to be very clear in his communication and couldn’t have done a better job of educating me. What he did was walk me through the territory and by using his contacts and data he let me know immediately that the total amount of business in the territory hardly justified my overly optimistic belief I could reach that lofty level. He didn’t leave me discouraged, however. He was quick to let me know that over a period of time I could make serious inroads and develop a solid base of profitable business. I can’t help but think how quickly things would have soured if I entered the relationship with a belief the rep should be doing much more than was possible.”

The manufacturer concluded by noting that “I didn’t forget this conversation at the beginning of our relationship. Thankfully he’s been more than willing to sit down with me many times since in order to bring me up to speed with his realistic view of the territory.”

Relationships Should Work Both Ways

If the previous item emphasized the importance of the manufacturer and his rep establishing firm lines of communication and understanding at the very beginning of the relationship, the view of another manufacturer firmly endorses that idea. “From the very beginning the relationship has to work for both of you. There are many times when a rep wants your line badly and the manufacturer is able to dictate terms that are overly favorable to him, but not to you. When the manufacturer makes money from the customer and not from the rep partner, then both sides of the partnership have crafted a beneficial relationship. You both have to plan for the short and long term and monitor the progress of your joint planning. You’ve got to be prepared to admit when you’re wrong, and at the same time, not be punitive when your rep partner makes an error. Never take shortcuts; they always lead to problems in the relationship. In addition, never do things that you don’t have to do. Don’t foreclose on potential opportunities with your reps. Leave all the doors open until they absolutely have to be closed. In conclusion, be flexible and play the events of your first-year experience by ear. Don’t be rigid, and the relationships will grow and thrive.”

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