Will Artificial Intelligence Be the End of Reps? — Part 2

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Last month I started a discussion about why Artificial Intelligence (AI) won’t be the end of reps. This month I share two stories that show why AI can’t replace reps.

AI Can’t Ask for a Favor

Someone at my principal in Europe decided to ship mounting hardware by ocean freight (eight-week delivery) instead of air freight (two-week delivery), so mounting hardware stock dropped to zero for six weeks. The factory’s message: “Tell your customers they have to wait.”

My principal’s products were useless without mounting hardware and customers’ production lines were shut down.

My largest customer was about to switch vendors. So I called another customer who had ample mounting hardware and asked for a favor. “I need to borrow 1,000 meters of mounting hardware for a month.” That customer let me borrow that hardware and I saved my largest customer. AI can’t do that.

AI Won’t Push Back

My largest customer had a rule. If you don’t increase your prices, you get to keep the business.

Every year my principal announced a routine 5 percent price increase. Every year I pushed back because prices in this product category actually were going down, and if the customer shopped around, they could get the same product for 30-40 percent less. Every year the factory backed off and this became one of their most profitable customers.

Then a sales manager who never met the customer took the account away from me and gave it to a direct salesperson 700 miles from the customer. And, when the factory announced its annual 5 percent price increase, the direct salesperson did exactly what he was told and insisted on the increase.

The customer found a new source for half the price.

AI is just like that direct salesperson. It does exactly what you tell it to do. Unlike AI, reps will push back when the factory does something foolish.

AI can’t do jobs that require trust and independent thinking. Those jobs will always go to reps.

Relationship Reviews — Strengthening the Partnership Between Manufacturer and Rep

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One of MANA’s highest priorities is helping manufacturers’ reps and manufacturers develop mutually profitable, interdependent, and long‑lasting relationships. Part of the process includes relationship reviews — manufacturers’ representatives and principals should constantly be reviewing each other’s performance with the goal of improving the relationship.

Improving the relationship involves both of you. On our own, we fail to see how others perceive our performance. We think we do okay, but unless someone comments on how we do something, we never know. We may do something we think is fine and it drives the other party nuts. They do not say anything, … Read the rest

Evaluating Goes Both Ways

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Whether manufacturers know it or not, their reps are constantly evaluating the profitability of their lines. This can be done formally via a structured line profitability analysis or informally with the rep actually measuring how much time he spends on a line and then asking himself if it’s really worth the effort. Depending upon the analysis of accumulated data, what inevitably can result is a parting of the ways.

Two reps recently reported to us the results of their decisions concerning some of their lines. According to the first rep, “Ours was a fairly simple decision. We contacted two of … Read the rest

Best Practices for Virtual Selling

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Virtual selling is any form of selling that occurs without the buyer and the seller physically present with each other in the same room. Telephone, text, email, Zoom — it’s all virtual selling. Since virtual selling, in that sense, is longstanding, there’s no reason to think negatively about it.

The first key to successful virtual selling is to accept the fact that selling fundamentals don’t change just because you’re using a communication tool that is new to either you or the prospective client. The medium used to communicate with your target audience is just that — a medium. Your product … Read the rest

Never Agree to Go to Timbuktu to Collect Your Commissions

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The Problem

Many of my clients represent principals based in foreign countries. Most of them represent automotive parts manufacturers. The automotive industry is a global industry. Many principals are based in Europe, China, Japan, India, Korea, and other countries. One of the topics in the negotiation of the sales representation agreement is often the state or country that will have jurisdiction and venue in the event of a dispute. Many principals will attempt to include a provision requiring any disputes to be resolved in their home country. I strongly recommend that any sales representative located in the United States or … Read the rest

Will Artificial Intelligence Be the End of Reps? — Part 1

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A sonnet written by a machine will be better appreciated by another machine.
— Alan Turing, English computer scientist widely considered to be the father of artificial intelligence.

Will there always be reps?

That’s a question that I was asked when reps’ role delivering three-ring engineering binders was upended by online access to technical data on manufacturers’ websites.

That’s a question I was asked when online quotations and order entry processes eliminated many clerical tasks in reps’ offices.

And now it’s the question I am asked because Artificial Intelligence (AI) disrupts some services traditionally provided by reps.

What happened to reps when three-ring engineering binders faded away? Reps evolved! Reps became guides who helped customers drink from the fire hose of data suddenly available from manufacturers’ websites.

What happened when online quotations and e-commerce disrupted manual processes previously handled in reps’ offices? Reps evolved! Reps removed from their line cards some of the commodity product manufacturers who only valued reps for quoting and order entry services. Reps shifted their resources to launching CRM systems that let them give better information to their principals and better anticipate their customers’ needs.

What will happen as AI disrupts other aspects of the services reps provide?

AI will increasingly be adopted for roles that don’t require face-to-face contact. Reps will evolve and refocus their resources on roles that do require face-to-face contact.

  • Reps will spend more time doing site visits to help solve their customers’ problems by integrating multiple products from their line cards into custom solutions.
  • Reps will spend more time teaching and coaching their customers’ employees on the functions and applications of their principals’ products.
  • Reps will be the conduit for insights and expertise they developed while solving one customer’s problems to be applied to their other customers’ problems.

Yes, there will always be reps, because reps are customers’ trusted face-to-face resources. And that is a role that websites, e-commerce or AI never can provide.

What to Look for When Searching for Manufacturers’ Representatives to Represent Your Company

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To be successful in sales requires creating high-trust relationships with customers. We like to buy from those we know and trust. When you search for manufacturers’ representatives to represent your company, you want to find those with high-trust relationships with the customers for what you supply. They created those relationships by helping the customers with the other products they represent that do not compete with what you supply.

How do you create that list of other products? If you already work with independent manufacturers’ representatives, check out their line cards for the companies they represent. Not working with manufacturers’ representatives … Read the rest

Making the Right Choice

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When considering what type of rep — whether a generalist or a specialist — is best for you, what it comes down to is determining from the outset what works best for you and your company.

For instance, one manufacturer that is firmly in favor of the generalist maintained that “although agents do need a certain level of technical sophistication in order to sell our products, that level is not as high as you might imagine. I look for agents who have a wide range of competencies; who can move quickly from one sales situation to another.”

On the other … Read the rest

Using Text Messages for Prospecting

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Have you ever received a text message like this?

Hi Jeff! I’m Calvin with XYZ. We offer tailored consulting-focused medical insurance plans with competitive rates and nationwide coverage during open enrollment. Would you like a quick quote?

Or how about this?

Hello Jeff. This is Elijah from ABC Bookkeeping. We’re an online bookkeeping service starting as low as $109 per month. Can I call you to explain the details?

Or even one like this?

Greetings Jeff. I know that technology integration is a concern for your industry. Our latest product addresses this directly, providing tools and platforms for sales trainers. Read the rest

Your Principal Sells Its Business: Now What?

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As a sales representative, you’ve spent years developing the brand name and recognition of your principal in the marketplace. You’ve generated new clients and coddled existing ones for your principal. Sales are up to the benefit of both representative and principal. Now, you’re told that the principal has sold its business and is moving on. Where does that leave you as a sales representative, especially with regard to your earned but unpaid commissions as of the date of the acquisition?

It depends on the answer to many questions as well as the relationship you may have with the buying and … Read the rest

Marilyn Kahler and Marty Grimes Join MANA’s Board of Directors

MANA announces that two new members have been elected to the association’s Board of Directors:

Kahler-MarilynMarilyn Kahler, president of Tri-Fab Solutions, Scottsdale, Arizona, began her career as an independent manufacturers’ rep in 1986. Prior to becoming a rep, she enjoyed a successful career in real estate. She was then hired as a business development manager for an established rep firm, and she became the sole owner of the company in 2008. Kahler’s agency supplies made-to-print components manufactured by multi-spindle, Swiss and complex machining. Products represented include die casting, injection molded plastics, stamping, spring and wire form.

Commenting on her … Read the rest

Musings on Line Card Profitability

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“I put $3 million down that hole in the ground and never heard it hit bottom.” — Thomas Edison

When we think of Thomas Edison, we think of his successes. The electric light. The record player. But in 1881 he spent $3,000,000 to build machinery that he thought could extract iron from rocks that had only moderate iron content.

The Edison Ore-Milling Company never was profitable, and the money he put down that hole in the ground was equivalent to $90,000,000 in 2024 dollars.

Reps, like Edison, often have ventures that put their money into a hole in the ground. But, for reps, their “hole in the ground” is representing lines that bring in $50 for every $100 the reps spend promoting the line.

Reps, unlike Edison, can benefit from the experiences of their colleagues who burned daylight on lines that were never profitable and almost always say they let the situation go on for months or years longer than they should have.

And MANA membership includes a tool rep members can use to take the emotion out of assessing lines that might not belong on their line cards, MANA’s Line Card Profitability Analysis Workbook.

What’s in the Line Card Profitability Workbook?

  • An assessment tool that takes into account a line’s income and the degree to which it really fits a rep’s line card.
  • A step-by-step assessment example that makes the tool easy to follow.
  • Adjustments for a line’s intangible contributions to a rep firm.
  • Real-world case studies of reps who discovered one of their lines did not belong on their line card.

Ready to do line card profitability analysis on your line card? Download MANA’s Line Card Profitability Analysis Workbook in the member area of the MANA website, www.MANAonline.org, look for “Publications,” and also watch our 12-minute YouTube video, Line Card Profitability Analysis.

Customer Service Basics

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Did you ever notice that when you pick up the phone to make a doctor’s appointment, call your insurance company, call a retail store or just about any company, you almost always get some kind of automated system? The message often states that “We are busy taking care of another customer, but your call is important to us, and we will be with you as soon as possible. If you don’t wish to wait, we can call you back. Press one for a call-back or press two to stay on the line.”

Many times this turns into phone tag. Now … Read the rest

What Reps Expect

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The joint concerns of what reps and principals should expect from each other in the relationship were tackled by a group of manufacturers and reps when they recently got together. See if any of these items are important to you. First, consider what they had to say about the rep’s expectations of their principals.

Expectations — “Will there be a clear understanding from the very beginning of our relationship of the expectations of each other that we’ve jointly agreed upon? How about collections? If a joint customer is in arrears, do they expect me to go out and make collections? … Read the rest

Are You Losing Your Mind to Reactive Decisions?

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I do it like everyone else. I open up my email and battle with the 50 or more messages I don’t need to or want to see. If I open up a browser, I am confronted with the same thing. I am now getting texts with all this junk. No matter how much I try to dodge them, these irritating nuisance messages appear before my eyes forcing me to delete, click away, move to junk or try to block the sender. You probably face the same thing.

Those who research these kinds of things will tell you that we make … Read the rest

Key Reasons to Have a Comprehensive Succession Plan in Place for Your Business

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You have invested time, money and sweat equity into your business. In the case of a family-owned operation, there may be generations of investment in the successful launch and growth of your business. Most business owners are deeply involved in the day-to-day demands of the business, and, because of that, too often we see business owners fail to carefully plan for an eventual day when they will no longer be in a position to operate the business. Then what?

Succession planning is a topic far too many businesspeople avoid discussing. It is understandable — similar to putting together a will, … Read the rest

An Invitation to the WomenReps 2024 Business Conference — Connect, Learn, Grow With Other Reps!

WomenReps 2024 Business ConferenceMANA is pleased to help publicize this non-MANA live event. It is open to all women reps regardless of whether or not they are MANA members.

You are welcome to share this information with other women independent sales representatives who might be interested.

Registration is open for the upcoming WomenReps 2024 Conference, a unique three-day event, April 16-18, 2024, dedicated to fostering connections, sharing knowledge, and promoting sustainable business practices. This conference will be held across two beautiful states, starting in Savannah, Georgia, and concluding in Hilton Head, South Carolina.

Event details:

  • Cost: $797 per person.
  • Limited Space — 16
Read the rest

ISA24: Reshaping Networking Experiences and Surging Exhibit Hall Demand

The Industrial Supply Association (ISA) is generating significant buzz with its upcoming event, ISA24, scheduled to take place at the Charlotte Convention Center from April 15 to 17, 2024. Making waves for its innovative approach to networking experiences within the industrial supply channel, ISA24 is capturing the attention of industry professionals and experts alike.

The focal point of ISA24’s acclaim is its fresh take on networking, moving beyond traditional formats to create both valuable and enjoyable experiences. Attendees can anticipate an array of lively interactive activities, collaborative sessions, and unexpected engagement points throughout the event, making networking at ISA24 an … Read the rest

Small Changes and “Trifling Matters”

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“Some may think these trifling matters not worth minding, but they should remember that human felicity is produced by little advantages that occur every day.”
— Benjamin Franklin

What did Franklin mean? One example dates back to the days when America was still a British colony.

Streets were lit at night by oil lamps, with the flame protected from the wind by blown glass globes. Franklin observed two issues with that practice:

  1. Breakage was a problem because blown glass globes had to be imported from England, a time-consuming and costly process.
  2. Soot from the flame darkened the globes, reducing the illumination they provided.

Franklin designed a replacement for the globes with four panes of flat glass. When street lamps were damaged, flat glass to repair them was readily available. His design also left an open chimney at the top to let soot escape before the glass was darkened.

I can share two more modern examples of small changes from MANA’s journey to advance the professionalism and use of independent manufacturers’ representatives:

  1. By capturing statistical data from searches in MANA’s RepFinder® database, we now send quarterly emails to rep members to let them know how many times their firm appeared in the results of RepFinder® searches.
  2. We had so many best practices resources available to reps and manufacturers that finding the resources they needed was challenging for our members. So VP & GM Jerry Leth curated our resources to let members view our most important online resources.
  • For reps, “Steps to Rep Professionalism.”
  • For manufacturers, “Steps to Selling Through Independent Reps.”

Little changes like these can be just as important to MANA members as breakthroughs like MANA’s launch of the first rep search smartphone app.

What kinds of small changes could you make that would make a big difference to your customers or partners?

Do you have an example to share? Reach out to me by email at [email protected] with the details.

MANA — A Wonderful Rep Resource

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Recently, I was attending a MANA function with many other manufacturers’ representatives and my peer group from various industries across the U.S.

During the conference, we held an open forum Q&A and amongst the group were many single person agencies or simply rep agencies seeking advice or counsel. The discussion included topics like representative-principal contracts, succession planning, acquiring new lines, buy‑sell agreements, marketing techniques and the many other areas we all face running a manufacturers’ representative agency in today’s environment.

As I sat and listened to the discussion and each rep’s carefully thought-out reply, one common theme was apparent: the … Read the rest

Understanding Reps

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A manufacturer who was switching from a direct sales force to reps called recently for some guidance.

During the course of the conversation, he mentioned that he planned to take on each rep in each territory on a trial basis. When he was asked why and what he thought an appropriate trial period should be, he answered, “I want to make sure that I’m doing the right thing by switching to reps and I want to make sure that each rep I appoint is going to be able to do the job to my satisfaction.”

When it was explained that … Read the rest

Never Agree That Your Commission Rate Will Be Agreed Upon on a Job-By-Job Basis

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My sales representative client and his principal are beginning a relationship and are having a hard time agreeing on a commission rate for new business.

My clients often ask me for advice regarding a reasonable commission rate. I generally tell them that the commission rate is an economic issue that is part of the bargaining process. I am a firm believer that commission dollars are more important than commission rates. Both parties need to have a good understanding regarding the potential size of the programs that will be quoted. Often the principal will push for language that the parties will … Read the rest

If You Are Looking for Gold, Look for Quartz

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When manufacturers call me looking for help finding reps, I suggest that they take a lesson from gold miners. If you are looking for gold, start by looking for quartz.

Gold often occurs in between quartz crystals. Looking for quartz can help you find gold you otherwise would have missed.

How do you look for “quartz” during a rep search? Let me give you an example, and for the sake of this example, I will oversimplify.

Let’s say you’re a manufacturer of nails. You do a search for reps who sell nails and the list is disappointingly short.

It’s actually even worse than that, because the reps you found who sell nails already have a built-in conflict on their line card. They already represent a nail manufacturer: when you call them, many can’t represent you too.

Instead, you need to look for “quartz,” and search for reps who sell fasteners. Now you find reps who sell screws, nuts and bolts, but don’t have a line of nails. Perfect fit! But just a start.

Broadening the search, you also search for reps who sell complementary non-competing products. This takes some thoughtful reflection on your part. What kinds of reps would have great contacts to sell nails? Reps who sell hand tools, like hammers, would have great contacts to sell nails.

I suggest that manufacturers ask themselves, and perhaps some of their best customers, “In addition to my products, what else do my best customers buy?” Then they can get some categories that give better results.

If you are a manufacturer who needs help finding reps or a rep who needs help getting found by manufacturers, reach out to MANA by email at [email protected].

Are You Planning to Sell Your Manufacturing Business?

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As a manufacturer who partners with manufacturers’ representatives, we hope you create relationships with your manufacturers’ representatives that work well for both of you and last a long time. Your manufacturers’ representatives create high‑trust relationships with customers who then purchase what you supply because of that trust, and as a result, your business becomes profitable. A win‑win for both.

History indicates that not an insignificant number of those who purchase manufacturing businesses who outsource the sales function to independent manufacturers’ representatives terminate the manufacturers’ representative agreement following the completion of the sale.

Why might they do this?

They look at … Read the rest

Treating Reps as Family

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In the course of a conversation covering a variety of topics a manufacturer with a long history of working with reps was asked if he would be willing to share his thoughts/philosophies concerning house accounts.

Here was his thinking on the subject: “We’ve been in business for well over half a century and have a proud history of working with independent reps for more than 40 years. With that long period of time in place, we’ve adopted a philosophy that we treat our reps as part of our family. We don’t look upon them as ‘just those guys who get … Read the rest

Harnessing the Power of AI

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I am going to go off course a bit and delve into something that used to freak me out because I am a bit old school when it comes to the digital world. However, I know it is powerful and can transform business — especially sales — when used in conjunction with interpersonal real people skills. So, let’s dive into a topic that is hot in the digital world: AI.

The world of sales is evolving at an unprecedented pace, with businesses constantly seeking innovative ways to engage customers, boost revenue and streamline operations. In this digital age, one of … Read the rest

Live to Fight Another Day

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This article addresses a problem that arises frequently in my law practice, namely, unilateral changes made by a principal to the sales commission agreement. These changes often happen quickly and without warning. Needless to say, unplanned reductions in take-home pay can cause significant angst for both the salesperson and his or her spouse.

The Big Question

“What should you do when your principal unilaterally reduces your commission rate?” The answer is: “That depends.” We are currently litigating a case that involves this exact problem. The key facts of that case are as follows:

  • Our client had an oral agreement with
Read the rest

ISA24 Annual Convention to Unleash Networking Excellence and Industry Trends

ISA24 logoThe Charlotte Convention Center is set to become the epicenter of the industrial supply industry as the Industrial Supply Association (ISA) gears up for its Annual Convention, ISA24, on April 15-17, 2024. More than just a meeting of industry professionals, ISA24 is where business gets done, connections are made, and the future of the industry is shaped.

Innovative and enjoyable networking activities at ISA24 promise to reshape conventional norms, aiming not only to build relationships but to solidify existing partnerships, offering an unparalleled experience of networking excellence that goes the extra mile.

Brendan Breen, CEO of ISA, emphasizes the significance … Read the rest

Million Dollar Deal. Rep’s Share: 100%

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Yes, sometimes reps write a six figure or seven figure deal and get to keep all the money. And it happens more often than you’d think.

How does this happen? It happens when the rep sells their rep firm to a new owner and retires.

What kind of difference would a six-figure or seven-figure payday make in your lifestyle after your retirement? Enough to put in some serious planning? Of course!

Can you answer “yes” to these questions? And if you can’t, would the possibility of a six-figure or seven-figure payday be enough to motivate you to work on changing any “no” answers to “yes”?

  • Have I identified a willing and able buyer, either within my own company or outside it?
  • Have I kept financial records to document for that willing and able buyer the financial returns he or she can reasonably expect after the sale?
  • Have I structured my company so that this willing and able buyer can manage day-to-day operations after I’m no longer part of the company?
  • Have I planned for the retention of key employees and principals after the transaction is completed?
  • Have I secured the counsel of a rep-savvy attorney and a rep-savvy accountant to navigate the many potential legal and tax pitfalls of the transaction?

And with careful planning, the sale of a rep company can be a win-win for the buyer and the seller. One MANA rep reports he has purchased five rep companies over his career, earning the sellers a fair return on their entrepreneurial investment and allowing the buyer to assemble a regional rep powerhouse that stretches from Maine to Virginia.

MANA membership includes a wealth of resources for reps who are ready to give succession planning some serious attention. Visit the member area at www.MANAonline.org, click on “Steps to Rep Professionalism” and go to step 12, “Plan for Your Succession and Sell Your Rep Business.” Or contact us by email at [email protected] or by phone at 877-626-2776.

Delegate to Elevate

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The tasks business owners shouldn’t do and how AI and virtual assistants can help independent manufacturers’ reps.

In the ever-evolving landscape of entrepreneurship, independent manufacturers’ representatives play a crucial role in driving business growth and success for their factories. These owners have a unique set of challenges and opportunities, often wearing multiple hats to ensure the smooth functioning of their ventures. However, in the pursuit of efficiency and productivity, it’s essential for business owners to recognize the tasks they should avoid and harness the power of AI-driven tools like ChatGPT and virtual assistants to optimize their operations.

Running an independent … Read the rest