Part I: Tactics to Bring You Closer

An independent manufacturers’ representative must maintain strong relationships with the principals they represent to be successful and profitable. This relationship is critically important with primary principals whose product sales represent a large share of a rep’s business, yet it is also important to build relationships with those secondary, smaller manufacturers, whose products are complementary to the primary principals.

A strategy for building these principal relationships needs to be developed and maintained.

To be smart, any independent manufacturers’ representative should always remember the following tactics:

• Agree on a fair contract.
• Maintain regular communication.
• Rep-principal relationship.
• Treat the customer service group as a customer.
• Follow company procedures.
• Aggressively market to architects, engineers, and end users.
• Travel with the sales manager.
• Maintain an appropriate number of principals.

These ideas might sound simple, but by putting effort forward in these areas, a manufacturers’ rep is significantly more likely to succeed.

I have spent more than 40 years as an independent manufacturers’ representative in the building materials industry representing both U.S. manufacturers as well as a few international ones. Although each manufacturer operates differently the common thread that connects them is the importance of building personal business relationships with them as well as with their customers.

Most of my career has been representing manufacturers of architectural products. This has been both challenging and rewarding since it required balance of time and effort marketing to architects as well as handling orders and service with the buying customers.

The tactics discussed are ones I used over the years from trial-and-error experiences as well as from discussions with other successful reps during manufacturers’ sales meetings and building industry conventions and seminars. These tactics generally work with principals producing commodity products as well as architectural products.

Let’s look at each of these tactics one by one.

Agree on a Fair Rep Contract

Most manufacturers in the building materials industry use contracts with manufacturers’ representatives that have a clause stating that either party can cancel the agreement for any reason with just a 30-day notice. Although contracts vary regarding how long a terminated rep can collect commissions, in the real world this is negotiable. Manufacturers might consider how many years the rep has had his contract. Most important, the time allowed is based on the rep-principal relationship and how the rep has performed over the years.

Because of these one-sided termination clauses, much has been written about rep contracts for the building materials industry as well as many other industries. One of the best sources for additional information is MANA.

Maintain Regular Communication

As is true in all relationships, the proper level and type of communication is critical. The sales manager expects and deserves to fully understand what is happening in a rep’s geographic territory. If the line of communication is not active, the sales manager has reason to suspect that a rep may not be doing the work the manufacturer expects.

Maintaining strong communication with principals has many components. One way to start off on the right foot is to set sales goals and market development activities at the beginning of each year that meet both the principals’ and a rep’s business objectives. Large manufacturers often set these goals with little or no input from the rep. When this is the case, a rep needs to give the manufacturer his feedback on these goals. He needs to clearly state reasons why he agrees or disagrees with the goals and what he expects from his territory. These comments should be summarized in a brief email for the record.

Small and medium-sized manufacturers that comprise a large segment of the building materials industry often do not set specific sales goals. They expect a rep to grow the sales in his market to the best of his ability but do not define a specific target. At least during the early years of a relationship, it is a good idea for the rep to communicate in some way with each principal concerning what he expects to accomplish during the year. This is good business practice for a rep and demonstrates to the principal the high level of professionalism with which the rep operates. It is also a good idea to provide verbal or written communication discussing the previous year’s results.

Rep-Principal Relationship

A rep is part of each principal’s sales team. The key element in this philosophy is understanding that customers belong to the manufacturer as well as to the rep. Reps who do not follow this philosophy covet key information about each customer and only share this information with their principals when they are forced to.

The justifiable fear of any rep is that a manufacturer can cancel the rep’s contract at any moment in time. A rep’s livelihood depends on sales to every customer, but customers are the lifeblood of any manufacturer as well. When a rep does not share customer information with his principals, he puts up a major roadblock in the relationship. If there is not a 100 percent level of trust between the principal and the rep, the long-term relationship is always susceptible to breaking down. A strong personal relationship with its principals is a key to the success and viability of any rep organization, no matter what is stated in the rep sales contract.

I believe in building long-term relationships between the rep and customers, as well as between the rep and his principals. If a rep is doing his job correctly, his personal relationship with customers is always stronger than a principal can ever develop. There should be no fear in sharing all the information the principal needs.

Treat the Customer Service Group as a Customer

The customer service team of each manufacturer plays a critical role in helping a rep grow his business. If a rep builds his business providing the highest level of customer service at a fair price (not always the lowest price), his manufacturers must have a well-organized and dedicated customer service team to support his efforts; therefore, the rep must develop a strong, friendly working relationship with each of them. As with all customers, the rep must fully understand all the needs of each customer service team member.

Amazingly, many manufacturers do not recognize the critical role of the customer service teams. Often, these teams are not staffed with properly trained people, nor are they always properly compensated. Yet, a rep must begin by assuming that each person on the customer service team is a dedicated, hard-working employee until proven otherwise. Each customer service employee is doing his job within the processes and procedures established by the management team of each manufacturer. Furthermore:

• Treat each person with respect. Treat them as you would expect to be treated if you had their job.
• Never yell or even raise your voice. Such action does not help to solve a problem or accomplish a requested action.
• Listen to their needs.
• Hold each customer service representative accountable for their promises and actions. At the same time, be sure to provide them with the timely and accurate information they need to do their job. Under promise; over achieve.
• Keep interactions as fun as possible. Customer service team members should enjoy interacting with a rep and helping the rep provide the highest level of service to all customers.

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

Part II of the article will appear in the May issue of Agency Sales magazine.