A manufacturer recently related what he considered to be a daunting task as he sought out agencies to represent his line of products in new areas of the country. According to the manufacturer, “We already had a solid reputation and good sales in the eastern part of the United States. Our next goal was to expand to the Midwest. Our initial efforts identified three prospective agencies to contract with. After we interviewed the first two, I have to admit I really didn’t know how I could choose one over the other.”

It was the interview with the third candidate, however, that tipped the scales and made the decision a lot easier.

“When I met with the head of the third agency, I was struck by the extra effort he had taken to become familiar with our line and our company. In addition, he had even gone to the trouble of visiting with companies he believed would be prospective customers for us. As a result of those meetings, he not only came up with a number of great practical ideas on how he would open the territory for us, but he brought an idea for modifying our product to make it more saleable in the territory.”

He concluded by saying that “This agency went a long way toward showing me his ability to serve as a consultant not only for my company, but also for customers.”

Combatting an Anti-Rep Attitude

During the course of an interview for an article in Agency Sales, a manufacturer’s sales manager related his experience when he joined a company that had an anti-representative culture. According to the manufacturer, “I had been with a couple of companies before, so when I joined this one, I recognized immediately that there was an anti-rep bias throughout the organization. Since I was a believer in the rep way of going to market, I realized this was something I had to fix immediately.

“Here’s how such an attitude develops. Reps are viewed as outsiders rather than business partners who are integral to the success of both organizations. I’ve found that the most productive long-term relationships are those that are based on mutual respect and support. The senior executives of any manufacturer must have a clear responsibility for developing a clear understanding of the need for this type of win-win relationship and for developing a rep-supportive culture throughout the firm. Anything less than that will result in a company shooting itself in the foot before a race is even started.”

One Manufacturer’s Take on House Accounts

The subject of house accounts is one that never seems to disappear. Predictably enough, independent manufacturers’ representatives have found ways to deal with such situations, but most will voice their displeasure with house account situations and express a willingness to walk away.

It was interesting recently when a manufacturer noted that he felt agents should view the introduction of a house account as a “red flag” in their relationship with a principal.

While he was quick to warn off agents from house accounts, he went on to have this advice for manufacturers that might think this is the way to go: “Take a close look at your company’s sales model and carefully evaluate what you’re trying to accomplish — especially in your relationship with manufacturers’ representatives.

“If, on the one hand, you’ve always preached that agents are integral to your marketing and sales effort, then it’s important that you carry through on that claim. But is instituting house accounts consistent with your stated philosophy? Isn’t the manufacturer that introduces house accounts showing a belief in isolating agents from various opportunities? And, what’s that going to do to your relationship?

“Here’s my bottom-line thinking when it comes to dealing with reps. I’ve never had a big problem writing a big check to my agents. Isn’t that what I’m ultimately striving for — to increase sales to the point where my agents have earned that large payday? Rather than regret the fact I’ve got to pay them well, my approach is to congratulate them on their effort, reward them for the hard work and let them know that there’s more to come in the future. That’s the approach I’ve always taken, and at least based on my experience, it’s worked very well for me.”

Another manufacturer weighed in on the subject with this view: “When a manufacturer makes a conscious decision to use independent representatives to outsources his sales, there really shouldn’t be any in-between. You either believe in the rep way of going to market or you don’t. Trying to do both ways is unfair, greedy, and plainly not what I consider to be an ethical way of conducting business.”

Constantly Maintaining a High Profile

A manufacturer fairly new to working with his outsourced sales force posed a question to a consultant that was visiting his company. The manufacturer, perhaps owing to a lack of a lengthy track record with agents asked, “Once the rep makes the sale, what’s he do? Does he simply stop working on that account until something new comes up?”

The consultant was quick to respond that this query betrayed a bit of an unfair, if not archaic, view of the representative’s job in the field. According to the consultant, “Here’s what it comes down to: That view exists because the manufacturer stops seeing or hearing from his rep. As a result, he simply makes the assumption that the rep isn’t doing anything and is just there waiting for his commission check. To counter that view, it’s up to the rep to be doing all he can to remind his principals of this presence in the field and all that he does when it comes to servicing customers. This can be done in a number of ways, including communicating to the manufacturer on a regular basis and having customers provide documentation of the services that are provided.”

Thoughts During Expansion

In the midst of its plan to expand the number of agencies it works with one MANA manufacturer member paused to pass along some of its corporate philosophy when it comes to working with an outsourced sales force.

According to the company’s national sales manager, “Because we don’t have a broad line of products for the industry we cover, it would be impossible for us to go direct now or in the future. Logistically reps allow us to cover the greatest amount of territory in the most cost-efficient manner.”

Emphasizing that need for cost efficiency, he continued that “If we don’t sell any of our product, then no one makes any money. We’ve gravitated to independent agents because the more he sells, the more he earns, and the more we make. I’ll never complain about the size of the rep’s commission.”

Since the company was in the midst of a rapid expansion, the company’s president willingly offered his view on what it takes for an agent to get his attention. “What we’re looking for in prospective reps is that they already have a career in the industry, a knowledge of the customer base in their territory and that they’re willing to learn all they can about our products. Perhaps most important though is that we want reps who are hungry. We’re also looking for reps who are honest and straightforward in their business approach. We want reps who are willing to partner with us in developing the market. If we can accomplish that kind of a match, then we’ll all be happy.”

Repeating a Familiar Message

Some advice never gets old. We were reminded of the truth of that statement during the course of an interview for this issue of Agency Sales. Elsewhere in this issue, Scott Lindberg, CPMR, was asked his thoughts on the subject of agents conducting line profitability analysis on their product lines. This isn’t the first time Lindberg has appeared in the pages of this publication. Nearly 15 years ago he offered some advice to manufacturers who outsourced their sales efforts — and that advice is as true today as it was close to the turn of the century.

According to Lindberg, “Everyone wants to add value, reduce cost and become more effective and efficient. Today’s rep not only brings more value for less cost, but also is able to solve problems, offer solutions and communicate which available product or service solves the customer’s problems.”

He concluded by noting that because “products don’t exist in a vacuum, the multiple-line rep is able to focus on the product being designed and on the whole bill of materials that pertains to the customer’s needs. Reps relate the specific need to the total situation and are able to bring a solutions approach involving several related products.”

This sounds like advice that ought to be repeated frequently.