“Two possibilities exist: either we are alone in the Universe or we are not. Both are equally terrifying.” — Arthur C. Clarke

Two possibilities exist: The concept of sales force outsourcing is so powerful that it would naturally develop on its own outside North America, or it would not. It’s very comforting to know that sales force outsourcing is such a powerful concept that reps can be found in Europe, North America, and South America. (Apologies to Arthur C. Clarke.)

How powerful? The international association that counts reps worldwide reports that the 42,000 reps in North America are part of a worldwide ecosystem of 537,000 reps.

Engaging in a worldwide ecosystem is very important to MANA members.

• MANA representative members need to be visible to international principals seeking North American representation.
• MANA manufacturer members need resources to find representation in Europe and South America, and learn the local practices of reps in those countries.

MANA’s participation in the Internationally United Commercial Agents and Brokers (IUCAB) gives MANA access to just the kind of exposure and information MANA members need to flourish internationally. (Outside of North America, what we call manufacturers’ reps are referred to as commercial agents.)

What is IUCAB? Many other countries have their own rep associations just like MANA. IUCAB is where those country rep associations meet to share best practices and solve common problems.

As a member of IUCAB’s Executive Committee MANA plays a critical role in the IUCAB. I recently met in Hungary with other Executive Committee members (pictured above) from the rep associations of Austria, France, Germany, Italy, Norway, and the United Kingdom to work on strategies to promote reps internationally.

Through IUCAB, MANA engages with 18 other countries’ rep associations in Europe, North and South America, and insures our place at the table in the international community of reps.

IUCAB Executive Committee members (left to right): Christian Rebernig, Austria; David Johnson, United Kingdom; Axel Sturmberger; Austria; Charles Cohon, North America; Ralf D. Scholz, Germany; Olivier Mazoyer, France; Marco Righetti, Italy; and Ole Kristian Bull, Norway. Not pictured: Enric Enrech, Spain.

This is how a computer stores the word “rep.” Binary language. Nothing but ones and zeros. To human eyes, incomprehensible.

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Something else about ones and zeros has been almost equally incomprehensible. Can reps earn commissions selling ones and zeros?

Let me explain.

Yesterday I had a conversation with a manufacturer of communication software used in manufacturing plants so employees on the plant floor can communicate more effectively.

The software manufacturer wants to sell his software using manufacturers’ reps. After all, he reasoned, reps who are calling on specifying influences for other equipment on the plant floor would be a natural to sell his software. Except….

Except that most reps I speak with are used to selling a physical product. The product ships from their principal to a customer, the customer receives an invoice, and the rep gets paid a percentage of the invoiced price.

But selling software is different. When a rep selling manufacturing software makes a sale, ones and zeros pass from the software company to the customer. No physical products move. If the software is sold as a subscription, there may not even be an invoice. Let me give you an example.

A rep convinces a customer to equip 100 manufacturing employees with productivity software. The customer pays $20 per employee per month, $2,000 total a month, and the rep gets paid commission each month the customer continues to use the software.

If the rep has negotiated a good contract, the rep will continue to be paid sales commission for as long as the customer uses the software. It’s the ones and zeros equivalent of a life-of-part/life-of-program agreement for physical products.

It’s the first month of a new decade. Has the time come for reps to embrace selling intangible products, or does the rep business model require physical products? Please write to me with your comments; my email is ccohon@manaonline.org.

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We often hear that customers are more loyal to manufacturers’ representatives who have been in the same territory for decades than they are to direct factory salespeople who often rotate into a new territory every two to three years.

But there’s more to it than just longevity in the territory. Let me share three stories about reps who went the extra mile for customers.

One rep’s customer ran out of connectors and the rep’s principal was backlogged for six weeks. The principal’s response was, “Sorry, we are bringing in the connectors by boat instead of by air to save money. The connectors are already in the container on their way to the boat and there is nothing we can do.”

Because the rep knew his customers very well, he knew that another one of his customers had an abundant stock of the connector and he was able to borrow enough connectors from one customer to keep the other customer supplied until the principal’s cargo container arrived.

A rep found he had stepped into something unpleasant when his principal shipped defective products to his customer. The principal insisted that the best they had to offer was to have the customer return the defective parts for rework. The customer insisted that they didn’t have time to ship the parts back and wait for them to be returned.

To break that stalemate, the rep went home, grabbed his toolbox, drove to the customer, and reworked the parts himself at the customer’s site.

A rep’s customer complained that the principal’s website was hopelessly difficult to navigate, making it impossible to find the catalogs and drawings the customer used on a routine basis. The rep built a simple web page with links to all of that customer’s most commonly used parts, and posted it on an easy-to-remember domain name so the customer would not have to navigate the principal’s website to find the most commonly used parts.

These are just a few stories of reps who creatively solved problems their customers faced. Do you have a great story to share? Send it to me at ccohon@manaonline.org.

Manufacturers and reps both say 2020 looks great for reps, according to MANA’s second annual member survey.

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What do manufacturers say?

• 84% increased or maintained the number of rep firms they used last year.
• 90% plan to increase or maintain the number of rep firms they use next year.

What do reps say?

• 79% increased or maintained the number of lines on their line card last year.
• 90% expect to increase or maintain the number of lines on their line card next year.
• 87% expect to increase or maintain their company’s revenue next year.
• 88% expect to increase or maintain their company’s profits next year.

Will all reps benefit equally?

No, say manufacturers, who report they are increasingly selective when they search for reps. To even get on the list to be interviewed, top manufacturers say reps must:

• Regularly update their MANA member profile.
• List a professional e-mail address in their MANA member profile.
  • AOL, Yahoo, and even Gmail accounts can hurt your chances.
  • E-mail addresses like sales@repcompany.com also can hurt your chances. Manufacturers want to contact a specific person, not a department. Anything less than jsmith@repcompany.com may bump you off the list of reps to be contacted.
• List a professionally created website in their MANA member profile.
  • Manufacturers say that websites that do not include the rep’s line card make them assume that rep has something to hide — so that rep won’t be contacted for an interview.

For reps with MANA member profiles that hit the sweet spot manufacturers seek, 2020 looks like a banner year. Want help checking your MANA profile to be sure it sparkles? Contact MANA VP & GM Jerry Leth at jleth@manaonline.org or me at ccohon@manaonline.org. And grab your share of banner year profits in 2020!

Full details of the survey are available to MANA members. Request a copy at ccohon@manaonline.org.

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Rep search technology has been stalled at the Blockbuster Video stage for the last 19 years.

Today we launch smartphone-based rep search that is going to hit old-style rep search like Netflix hit Blockbuster Video. And it’s available exclusively to MANA members.

Let me explain.

Back in August 2000, MANA launched the online rep search to supplement the printed directory that dated back to 1949. And for the next 19 years, the technology manufacturers used to search for reps remained pretty much the same.

• Search the online database for reps from your desktop or laptop computer.
• Download a list of potential candidates.
• Start contacting those reps by phone or e-mail.

Other than rep search, a lot has changed in 19 years. More and more we use smartphone apps instead of our laptops for banking, shopping, and booking travel. Pretty much all the business we use to transact on our laptops can now be done on smartphone apps.

Except rep search. Until we launched the RepFinder® by MANA smartphone app.

Is the RepFinder® app just a way to download the old style list to a smartphone? That would not be good enough! On-the-go Millennials are not content with apps that just let them browse a list. They expect to complete their transactions from smartphone apps. And with some Millennials turning 38 this year, more and more are starting to have rep search responsibility at their manufacturing companies.

Now MANA is making sure that MANA rep members can be found by these smartphone-wielding sales managers.

RepFinder® lets manufacturers use our smartphone app to search for reps, view each candidate’s MANA member-profile, and contact the best candidates right from the app.

That’s right — manufacturers “Swipe Right” if they want to contact that rep and “Swipe Left” if they don’t.

RepFinder® by MANA is now available for download on the Apple App Store and Google Play. It’s the very first rep search app available, and it is exclusively for MANA members.

To read more about the app, turn to page 10 of this issue. Questions or comments? Contact me at ccohon@manaonline.org.

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We all know the business reasons to sell through multi-line manufacturers’ reps. Things like these:

• Reps are known and trusted resources for customers in their local territories.
• Reps help manufacturers avoid fixed costs, like salaries and benefits, of direct salespeople.
• Reps tend to remain in their territories and work with the same customers for decades, while direct salespeople tend to relocate every few years.

But here’s a new reason to sell through reps: Multi-line reps are fantastic for the environment!

Let me explain. Multi-line reps tend to cover two to three manufacturers’ products during each sales call. If separate direct single-line salespeople had to be sent to call on those same customers to cover the same topics, it would take two to three times the number of single-line salespeople, each working for a single manufacturer and driving their own vehicle.

What happens if twice the number of salespeople and twice the number of vehicles make those same sales calls? If the average salesperson drives 50,000 miles annually, then every time one multi-line rep is replaced by two single-line direct salespeople, it means an extra 50,000 vehicle miles.

The average passenger vehicle emits 404 grams CO₂ per mile.¹ So, 50,000 extra vehicle miles means 20,200 kilograms more CO₂ in the atmosphere annually.

But there is more! Single-line direct salespeople tend to fly more air miles than multi-line reps, perhaps 20,000 miles a year. So, the two single-line direct salespeople in our example would also add 40,000 air miles that would not be flown by multi-line reps. The average commercial airliner emits 184 grams of CO₂ per passenger mile,² so that’s 7,360 additional kilograms of CO₂ emissions.

Total environmental impact: 27,560 kilograms of CO₂ emissions. That’s 60,760 pounds. Roughly 30 tons. About the same as losing 12 acres of new forest.³

So, selling through reps is not just fiscally responsible, it’s environmentally responsible too! Why would you go to market any other way?

¹ https://www.epa.gov/greenvehicles/greenhouse-gas-emissions-typical-passenger-vehicle
² http://urbanforestrynetwork.org/benefits/air%20quality.htm
³ https://www.carbonindependent.org/sources_aviation.html

Recently I’ve heard from reps who report hearing a new question during line interviews: “Can you write me a business plan?”

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Eager to outshine other reps competing for the line, these reps pulled out all the stops to be sure that their in-depth business plans proved their knowledge of their territory and market.

Their business plans detailed all the customers they planned to convert to that manufacturer’s product and the competitors’ products those customers were using. To really impress the manufacturer, sometimes they even reported the prices those customers were paying.

It seemed like a good strategy at the time. But when reps who submitted business plans didn’t get the line, they looked back at the process with mixed feelings.

“We wrote a business plan for a product we don’t currently have on our line card, so if the manufacturer uses that information to sell his products, it won’t actually take any money out of our pockets*.”

“At the time we had an internal discussion about asking the manufacturer to sign a non-disclosure agreement, but it would have thrown cold water on our discussions for sure.”

“In retrospect, we showed the manufacturer way too many of our cards way too soon. If I had it to do all over again, I would give a list of prospective customers but not share any information about the current brands they use or the prices they pay. I would give a total of prospective sales in the territory, but not break it out customer by customer. And I would include a polite footnote indicating that I would share granular details after the rep agreement is signed.”

Have you been asked to write a business plan when you were interviewing for a new line? Did you write one? Did it work out well, or would you do things differently next time? Please e-mail ccohon@manaonline.org to let us know!

* Details may have been added, removed, or altered to protect the privacy of those who share their stories with us and to better illustrate the concepts discussed in this article.

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Today a book arrived in the mail. It was written by a “world-renowned sales consultant, coach, speaker, influencer, and best-selling author,” according to the press release that came with the book.

Very quickly, it became obvious that this book illustrated three points worth sharing with MANA members — but not points the author intended.

1. One over-the-top, unsupported claim casts doubt on every other claim you make.

Tony Robbins could claim to be world-renowned without offering supporting evidence. But the author was not Tony Robbins. If you are not a household name and make an unsupported claim to be world-renowned, every other claim you make is tainted.

Reps know that their livelihoods depend on credibility with their customers and principals. We don’t make claims unless we can back them up.

2. Prospective customers don’t appreciate receiving a homework assignment.

A 240-page book and an 8-page press arriving in the mail looks to me like a homework assignment. If the book includes some genuinely unique insights, share a few bullet points in a short note, don’t expect me to search a 240-page book to find them.

Reps know that a brain-dump of all their product’s specifications does not win customers. A short individualized presentation that identifies the specific benefits that particular customer will value is the way reps close orders.

3. You have only seconds to differentiate yourself before losing a prospect’s interest.

I know you have been disappointed by other sales books, but mine is different, claims this author. As claimed by pretty much every other author of every other sales book ever written.

Reps know prospects hear “Our prices are low, our quality is great, and our service is excellent” from every salesperson. So reps do pre-call research to uncover one or two differentiating characteristics of their offering that will be important to this prospect, and leave generalities to the amateurs.

I have never met a rep who was world-renowned. But I have met countless reps who are recognized by customers and principals as the go-to experts in their sales territories. So they are renowned where it counts by the people who matter.

A week of snorkeling and kayaking in the Florida Keys reminded me of one of the reasons there will always be manufacturers’ reps.

Everywhere the Atlantic met the shore, I saw mangrove trees, and only mangrove trees, thriving in the shallow ocean water.

Why only mangrove trees? Because mangrove trees adapted to thrive in environments that would kill any other tree. Ocean water salty enough to kill any other tree. Ocean tides that would drown any other tree. Waterlogged soil so barren of oxygen it would choke any other tree.

And not only do they thrive in toxic environments, mangrove trees gradually actually make the environment around them better because their massive in-the-water roots slow tidal water just enough to let sediment settle and build soil up around the tree.

Why did mangroves remind me of manufacturers’ reps?

Because savvy salespeople around the world look at their local markets and say: “There may not be enough business here for a factory to base a full-time salesperson locally, or even for a salesperson to stop here very often. But there are definitely orders to be written here.

“A salesperson trying to live off the orders from one factory’s products would starve here, but if I could find 10 or 12 manufacturers who need local sales coverage, I could thrive here.”

So, mangroves and reps both adapt and thrive in environments too harsh for their competition. Too salty, too drastic tides, too little oxygen in the soil for trees that would compete with mangroves. Orders too sparse and too dispersed for direct salespeople who would compete with reps.

That is why there will always be reps. Because while some look at a market and say, “nothing could grow here,” reps look at the same market and see opportunity.

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Golfers wouldn’t dream of hitting the links with just irons or just woods in their bags. Many manufacturers’ representatives feel the same way when it comes to the rep associations that support them in their profession. Let me explain.

MANA is a horizontal rep association, so we focus on rep and manufacturer resources that can be applied to any industry that uses outsourced sales forces.

Because MANA can serve all reps and manufacturers who use reps, we have thousands of members. Thousands of members means we have the budget, for example, to invest very heavily in RepFinder® rep/manufacturer matchmaking tools and print Agency Sales magazine every month.

Vertical rep associations focus on rep resources for one particular industry. Many times this is a conference specifically for reps in that particular industry.

Six vertical associations now purchase MANA memberships for all their rep members, giving their rep members the very best of both horizontal and vertical rep association resources.

• AIM/R, Association of Independent Manufacturers’ Representatives, Inc., plumbing, HVAC/R, kitchen/bath, waterworks, irrigation and related industries.
• HDMRC, Heavy Duty Manufacturers’ Representatives Council, commercial vehicle supplier industry.
• IHRA, International Home + Housewares Representatives’ Association, home, housewares, gourmet, giftware, consumer electronics & hardware industries.
• ISA, Industrial Supply Association, the association for the industrial Maintenance Repair Operating and Production (MROP) channel.
• NMRA, National Marine Representatives’ Association, marine industry.
• PTRA, Power-Motion Technology Representatives’ Association, power transmission and motion control industry.

From all of us at MANA, hats off to the leadership of these six associations for having the vision to be sure their members have both irons and woods in their bags, to help them to effectively manage their professional manufacturers’ representative firms.

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The rep in one of ABC Widget Manufacturing Company’s most important territories retired abruptly. So, ABC Vice President of Sales Sue Smith had a problem. And an opportunity.

Sue used MANA’s RepFinder® database to find candidates to take over the territory.

Several looked like they would be at least as capable as the rep Sue needed to replace. And one of the reps looked like a head-and-shoulders stand‑out.

Fred Jones’ rep firm was a head-and-shoulders stand-out over any other candidate, but all the other manufacturers on Fred’s line card were heavy hitters in Fred’s industry. ABC Widget Manufacturing was more of an up-and-comer. So, to hire Fred, Sue had to figure out how to punch above her weight class and sell Fred on representing ABC.

Sue met with Fred and shared the following:

• “Our top management is very responsive to our rep council’s recommendations. I can share with you a list of changes and improvements ABC has made that came out of rep council meetings.
• “We treat our reps like part of the team and members of the family. I have a list of reps in other territories who would be happy to speak with you about us.
• “And when you’re talking with those reps, here are some topics I hope you will discuss:
  • We communicate quickly and accurately with our reps for information and quote requests as well as any problems that may come up.
  • We ship on time and our quality is excellent, so once you make a sale, you don’t have to think about taking calls from customers with complaints about deliveries or quality.
  • We do not have any house accounts.
  • Whatever it takes, we will always make you look good to your customer.”

Fred signed up to represent ABC and couldn’t be happier that he did! “Yes,” said Fred, “We probably do spend a little more time working on ABC than the commission income strictly justifies, but when a manufacturer treats you right, you just can’t help spending more time on her line.”

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“Drainage! Drainage, Eli, you boy! Drained dry! I’m so sorry. Here: if you have a milkshake, and I have a milkshake, and I have a straw — There it is. That’s a straw, see? Watch it — my straw reaches across the room, and starts to drink your milkshake, I drink your milkshake! I drink it up!”

Daniel Day-Lewis, There Will Be Blood, 2007

Daniel Day-Lewis won the 2008 Academy Award for Best Actor for his portrayal ruthless fictional oilman Daniel Plainview.

Plainview bought up oil leases cheaply from property owners across Southern California during a late 19th and early 20th century oil boom. When a hold-out property owner finally comes to Plainview begging to sell, he delivers his famous speech. The property owner’s oil is long gone, gloats Plainview: “I drink your milkshake!”

Has someone got their straw in your milkshake? Here are some things to think about to help you protect the value of your rep firm.

• Most principals would say that the value of your rep firm is your customer relationships. Do you only have relationships with today’s decision-makers? Or have you also built relationships with junior staff who will probably be the decision-makers in the future?
• Principals also value your rep firm for your deep market knowledge of your territory. Do you continue to prospect for and build new relationships with new customers? Or have you become comfortable with orders you can secure from customers you already know well?
• Are there services that your customers or principals need and other reps in your territory supply that you have been reluctant to supply?
• When you start to think about selling your rep firm, the prospective buyer will value your firm more highly if you have deep relationships at all levels with your most important principals. Do you visit key principals periodically to build those relationships?

If a few key players at your customers retire, will your orders be in jeopardy? If a few key players at your principals retire, are you at risk to lose the line?

Whether you see it or not, there is always someone nearby, looking in your direction, holding a straw. To maintain the value of your rep firm, you must remain vigilant and keep their straw out of your milkshake.

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“We have had great success selling through reps,” said the manufacturer, “and we use reps throughout North America. Except of course in the home territory.”

He said “of course” as if there was no other choice.

Why do some manufacturers think selling without a rep in the home territory is an “of course” decision?

Sometimes a small company’s founder feels customers he or she developed in the company’s early years require the founder’s continued personal attention.

Other times a manufacturer thinks it’s cheaper to tack responsibility for local customers onto the other duties of a local employee.

What happens when the founder is still the salesperson for customers in the home territory? One of the founder’s two jobs suffers.

• A founder who devotes enough time to being the salesperson in the home territory spends less time managing the company, so crucial decisions are stalled while the founder is distracted by sales calls.
• A founder who devotes enough time to managing his or her company can’t give customers and prospects the attention needed to grow sales in the home territory.

What happens when sales calls on local customers are tacked onto the duties of a manufacturer’s local employee?

• The local employees’ primary duties always come first and local sales calls get pushed back “until I have time for them.”
• The local employee calling on customers knows that every customer visit means work piling up at his or her “real” job at the company, so sales calls become halfhearted “I need to check the box that I was here and get back to the office” events.

It’s a no brainer. Why would a company squander its home court advantage by assigning local sales responsibility to someone who can only make sales calls when they can squeeze them into their schedule around the duties of their “real” job.

That’s why many manufacturers use reps in their home territory. They need a sales force that has one job — to call on customers and prospects all day every day.

Of course.

It’s time to share my favorite backselling story.

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What is backselling?

It’s a word coined by John Haskell, a frequent contributor to Agency Sales magazine and author of Profit Rx under his pen name, Dr. Revenue^®.

In my own manufacturers’ representative firm, I took backselling to mean, “Communicate with principals as if the line were in jeopardy even when it is not, because once the line is in jeopardy anything you say will sound like an excuse instead of communication.”

Here is my backselling story.

I had broken one of the fundamental rules of running a manufacturers’ representative firm. I had let one principal become more than 50 percent of my company’s income. Much more than 50 percent.

We were so busy selling the product that it just happened without us noticing it. Once we did notice, we needed to think about ways to make sure that this principal knew how much value we brought to their company; not just the local regional manager, but also the team at the principal’s headquarters. So, we asked to schedule a visit.

Apparently, it was the first time one of their reps had asked to visit headquarters, perhaps because the only way to get to their small town was to fly to Oklahoma City and drive 139 miles southwest or fly to Dallas and drive 141 miles northwest.

On that drive we realized we had come empty-handed. So, we stopped at Walmart and bought one-hundred one-dollar sleeves of “fun size” candy bars. Arriving at our hotel, I emptied my roller luggage and filled it with candy.

We visited customer service, product marketing teams, product engineering teams, and pretty much everyone we could see in the day and a half we’d scheduled. And at the end of each visit I opened my luggage and asked, “As a very small thank you for all you do, could we offer some candy?”

You would have thought we were giving away gold bars instead of candy bars. No one had ever come to headquarters to thank them for their help, and no one had ever brought them even a small token gift to thank them.

Each year our visits got longer and our discussions became more productive. Each year our bond with that principal grew stronger. And each year we gave away more sleeves of candy bars. I knew we had made our mark when we arrived for our third annual visit and saw a head pop up over one of the cubicle partitions and announce loudly, “Hey, it’s the candy man!”

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It’s a question I hear all too often.*

“I’m the sales manager for a manufacturer, and my boss thinks our rep is getting too rich off a new order. I don’t know for sure whether I agree with my boss or not,” said the sales manager.

“I can see the argument that the rep should be rewarded for bringing in a huge order that took five years to close, but the rep’s check last month was bigger than my boss’ check — that is not sitting too well.”

My reply?

The sales manager made the most obvious argument himself. The rep worked for five years before any commission was earned. Now the rep is being compensated for the five years of unpaid work leading up to the order he or she earned for your company. Each commission payment the rep receives covers both payment for that month’s shipments and an installment payment toward reimbursing the rep for all the unpaid work during the past five years.

But there is more to it than that. It will be easier to explain if I use an example.

Let’s say you invested in 50 risky stocks five years ago. Most of the companies went out of business. Some of them earned you a modest profit, and one of them was a big winner.

What was your five-year profit?

Is the gain on the big winner your five-year profit? Of course not. You calculate your net profit by totaling all your losses and all your gains.

Consider that the rep had many losses on prospects in which he or she invested time and effort that never returned a cent of commission.

These losses, which are an expected and normal part of being in the rep business, come from pursuing prospects where the rep’s principal ultimately can’t meet the prospects’ price, delivery, or performance standards.

Reps don’t expect their principals to be an ideal fit for every prospect. Quite the contrary. They expect that only a modest percentage of prospects will be a good fit for their principals and use the commission from the orders they do receive to offset the cost of making calls on prospects that turn out not to be good candidates for their principals’ products.

“Pursuing five to eight prospects for each order that eventually closes is part of the rep business,” explained one rep. “I came into this business with my eyes open. But when I do make a big win, I have to be sure to remind my principals that the commission I receive on each closed order has to cover my cost pursuing that order, and five to eight that didn’t close.”

* This article combines conversations with a number of MANA members. Their comments have been edited for clarity and brevity.