© Olena Vasylkova | Dreamstime.com

Two independent manufacturers’ representatives contacted Agency Sales magazine recently, both of whom told similar stories — stories that we, agents and manufacturers, have heard previously. We refer to their experiences here because while there’s obviously a “teachable” opportunity for both of the agents, there’s also an opportunity for manufacturers to hear firsthand what former agents think about an abrupt ending to what was a lengthy relationship.

The first agent recounted how over the last several years, he and his agency have found themselves on the losing side following a variety of mergers/acquisitions and sales management decisions that in his opinion did little to strengthen the relationship between principal and agent.

According to the representative, “Most recently our principal was purchased by a large commodity company and immediately the corporate culture changed. In that change process what made the manufacturer such a gem to their customers and to their loyal rep force was destroyed.

“Everything we sell is an engineered product and going to a sales management style where distributors and dealers thrive was a real challenge for the commodity company to understand and manage. Despite that, they plowed ahead. We had been with this company for 20+ years and while our territory has declined in manufacturing customer density, sales have been consistent with occasional spikes up and down. We’ve always been extremely proud of the quality of workmanship and service this manufacturer provided, and had no issue spending extra time with our valued customers to hand hold, troubleshoot and act as liaison between them and the manufacturer. Prior to the sale we would characterize the relationship we had as excellent. We were extremely close to applications engineers, test lab personnel, parts sales coordinators and certainly to the sales management team.

“Then the sale came and the change in everyone was notable. People lost their jobs without adequate explanations, assigned roles were changed and people moved to handle different geographical territories. The wet process guy became the dry process guy, then that changed back. Then we experienced a new system to evaluate ‘sales channels’ and oversight was performed by a new company sales manager who, at least in our opinion, knew nothing about products or historical relationships.”

He continued that “We met with their new corporate sales manager, who had never previously met any of the independent representatives. Immediately a barrier was established between us and him with new buzz words like ‘traction in the market’ and ‘sales channel optimization’ were being used to impress us with how things would be handled. At no time during this meeting did applications or customers’ needs work their way into the discussion.

“Having worked with the company for more than two decades, I thought the new sales manager would be interested in our perspective, but that nugget of insight was never teased out. The manager did, however, show great concern that the average age of our agency partners was in the mid- to late 50s. I guess that meant that the end must be near since there were no young bucks in the stable to take over. Clearly we must all be close to retirement or death.

“In any case, following our introductory meeting, we decided to lobby for additional territory given that the home office of our agency’s new hire was within the new territory. The immediate reply was that this was a great idea, but ‘We need to analyze our options.’ Fast forward one month and we had no response to our proposal. A meeting at a trade show was suggested to discuss the plan. The response was that they still thought this to be a good idea, but ‘We need to get into further analysis and sales metrics.’ We were given a spreadsheet to complete which asked questions about our company. (I’m surprised they needed clarification after working with us for more than 20 years.) We left that meeting, shaking hands and back slapping, and assumed we had re-established our interest to grow and invest that would benefit everyone.”

But that wasn’t the end. “More analysis was apparently warranted (note that existing direct sales territory was now not supervised), and many months pass without any indication that a decision was near or that there was a negative issue with our representative company. At no point were we contacted to discuss sales performance, or discuss any sales behavior that was not endorsed by the principal manufacturer — no communication of any kind. We had left e-mails and voice mails for our direct regional sales manager (no response), the new product manager (had actually never even spoken to the man — no response), and even the marketing manager whom we had known for 20 years (no response). After five months, we began to assume that we were no longer loved, but nobody would comment to that point. In this interim period, we did have sales and also several field service issues which the old manufacturer contacts performed admirably (as always).

“It wasn’t until the seven-month anniversary of the initial meeting that we received an e-mail at 5:30 p.m. to participate in a conference call at 9 a.m. the following day where we were told we were being terminated. Our first question was ‘Why?’, to which we received no answer other than the decision was made by others that opted not to participate in the call. Of the people involved in that conference call, only one was someone that we actually knew and who had confided to us earlier (the night before) what was going to happen. The actual sales manager that did the terminating had never met anyone in our firm. The regional sales manager while thanking us for our service, offered apologies claiming he fought hard for our case.

“As I look back over the entire experience it’s obvious that being an independent manufacturers’ representative is sometimes a painful and lonely existence. We value the relationships we have with our loyal principals and absolutely appreciate being held to a level of sales performance expectations. In this specific case there was never a detailed discussion of performance or an effort to fix whatever perceived wrong existed.

“The truly sad part of this story is that the people that brought down our relationship with the manufacturer will likely not even be around within another few months. They’ll simply move somewhere else within their company.”

The second agent recounted how his three-decade-long relationship with a major manufacturer was ended as soon as new management took over the company. According to the representative, “A good part of this is my own fault. This company represented 95 percent of my income and if I’m guilty of anything, it’s of putting all my eggs in one basket. I’m reaching a point in my career where I should be thinking of retirement. Instead, I find myself in a position similar to where I was 30 years ago and just starting my agency.”

When he was asked what’s next, he responded that “This happened just about a month ago, and I haven’t been wasting my time. Thankfully, I know the territory and if I do say so myself, the customers are mine, not necessarily the manufacturer’s. Thanks to my reputation, I already have two excellent possibilities to replace the outgoing manufacturer and expect to sign on with one of them in a matter of days. If anything, I’d say the manufacturer — who’s decided to cover the territory with a factory direct salesman — is going to find himself at a disadvantage. He’s going to be selling against me with someone new, someone who knows neither the territory nor the customers as well as I do.

“Having said all this, however, when we parted ways, we parted professionally and all my commissions — projects that I’m the source for but haven’t been paid for yet — will be paid in full.”

Editor’s Note: It would appear there are several teachable moments in these similar stories. First, from the independent manufacturers’ representative perspective, perhaps the first agent could have/should have spent more time with the principal, especially at such a time when the sale of the company was imminent. Admittedly, this may not have made any difference but with such a change there’s obviously some writing on the wall. It’s best to read that writing and take whatever action is possible.

The second agent would have been wise to: first, always have other potential principals under consideration in order to head off what could be disastrous for his agency; second, it’s never wise to have a single principal be the source of such a large part of the agent’s income.

From the manufacturers’ perspective it appears that communication was lacking in both cases. Since both scenarios featured relationships that apparently thrived over the years, communication must have been present at one time. Why stop? If there was dissatisfaction in the agent’s performance, why not take corrective steps before calling for a divorce?

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