Manufacturer's Corner

Agency Sales,  Feb 2004  

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The Newsletter For Sales Executives Who Use Manufacturers' Representatives Sharing best practices to help you get the most from your rep partnership

February 2004

COMPENSATION FOR VALUE ADD

When the subject of reps wanting to be paid for value-added services they perform on behalf of their principals was raised, one manufacturer responded: "If one of my reps approached me with the request that we consider paying him for services he was performing above and beyond what is normally expected, my reaction is that this is a totally acceptable subject for a conversation. As a matter of fact, if I ever learned that a rep was grousing about not being compensated for something he was doing, I would go to him and let him know that he hasn't been taking advantage of the relationship we have here. Rather than complain, I'd want the both of us to put our cards on the table, consider how the situation is currently being handled, and then solve our mutual concerns."

WHY SHOULD A REP WORK WITH YOU?

Years ago we heard journalist Bill Moyers ask a presidential candidate "What recommends you to be President of the United States." That's a bold question, and it's one we've used in a similar vein when speaking to manufacturers about working with reps. We've phrased it this way: "What recommends you as a principal that a rep would want to conduct business with?" Thankfully, the majority of manufacturers we ask the question of hardly skip a beat when they answer. Recently one came up with what we thought was a great answer. "We pay our reps on time. We're honest with them. We communicate with them regularly, and we don't play games with them. We treat them just as we treat our full-time employees."

If it works for that manufacturer, Lhere's probably no reason why it shouldn't work for most.

NO MOTIVATION NEEDED HERE

While reciting a virtual litany of benefits for going to market with reps, a manufacturer told us what really gets him excited about working with his nationwide network of reps. "We don't have to worry about getting them out of bed in the morning and having them make sales calls. They do that all by themselves."

This point came up when the subject of motivating a sales force was introduced after a recent industry function. The manufacturer continued that "While we are totally committed to reps nationwide, we do have one small territory where we have a three-man office that handles a few accounts. Even though they're located near our headquarters, we constantly wrestle with the need to motivate our salesmen there. We worry about them getting out of the office, calling on customers and performing at the level we know they should. Comparing them to what our reps do throughout the rest of the country, the major area where they fall down is in a willingness to get out in the field, make scheduled or even cold calls and developing new business.

"When I look at our reps, however, it's a whole different ball game. I don't know, maybe we deserve some of the credit because we chose them well. There's never a concern about them meeting their numbers. I think a large part of it has to do with the fact they're entrepreneurs, and they're responsible for their own income. If their numbers fall, they don't get the income they want and need. That's motivation enough. It's a pleasure to know that they get themselves up and out every morning and do more than we expect of them."

Editor's Note: We haven't heard too many endorsements of the rep function that were as complementary as this.

FINDING REPS

When a manufacturer was asked what he found his most effective means for locating new reps to represent his line of products, lie was quick to emphasize that the need to locate new reps didn't surface all that often. "We pride ourselves on the long-standing relationships we have with our rep network. The need does arise occasionally however, when we do have to replace one of them. I'd emphasize that this occurs primarily when one of our reps has gone out of business or because of conflicts caused by merger/consolidation activity in the marketplace and he can no longer rep us. When that does happen, what we've found to be most effective is a double-edged effort combining communicating with our existing reps and consulting with the rep association serving our industry. The first thing we do is to ask our remaining reps if they can recommend someone in the territory in question. We've found that through their networking activities over the years reps get to know each other and can recognize the qualities that will make them effective."

He continued that if, in conjunction with that effort, his company will access the rep locator that the rep association they maintain membership in provides. "We do this for two reasons: First, if we're not satisfied with the recommendation we've received from our existing reps, we've got to look elsewhere; second, many times we confirm recommendations by finding a prospective rep in the locator. The fact that they are members of the rep association shows us that they are among the more professional in their profession and that serves as a recommendation itself."