Manufacturers And Reps Explore Their Expectations

Agency Sales,  Jul 2007  

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Perhaps the most appropriate analogy concerning what manufactuers' representatives and principals should expect from their relationships was offered by one California rep. "Isn't it a little like bringing someone into a marriage? You want to know ahead of time what each party expects from the other. It's only with that knowledge that you have a real chance for success."

That's how Susan Fox, Applied Industrial Materials, Torrance, California, approaches a new business relationship.

The extent to which Fox considers the importance of identifying mutual expectations is seen in the fact that prior to an agreement with a principal she'll actually go through a recitation of exactly what the principal should expect from her. In return, she requires the same from the principal. Fox maintains, "It's a very simple process that I complete before going to contract. They know exactly what they're getting from me. In order to receive that from me, here's what I need from them."

From her perspective, she says, "I expect to receive commissions on time. After all, cash flow is important to my success. But that's not all. I also bring up the subject of shared development costs, and I want the necessary information (e.g., names, addresses and contact points) for their 1B' and 'C' accounts. Once armed with that information, it's my intention - when possible - to turn them into A' accounts."

She's not done yet.

"Other requirements are:

* Have me listed as their rep on their web site.

* Support me technically.

* Supply me with leads.

* Provide me with all the necessary product information and the inside and field support that I'll need to get the job done.

* A written contract is an absolute necessity. If the manufacturer balks at that last point, it shows me that the relationship has little chance of working.

* Last, my expectation is that any principal I align myself with must have strong competition. If they currently have a small market share, then they truly need me and my agency."

Other manufacturers' representatives and manufacturers interviewed concurred with Fox's approach and all admitted that to assume anything in the relationship without first discussing it was an error.

Dealing With the Unknown

Geoffrey Boyd, president, Stirling Equipment &. Systems, Inc., Sturbridge, Massachusetts, says, "With some companies it's a lot easier to have this conversation than with others. Unfortunately, for a variety of reasons some manufacturers don't necessarily know what to expect when dealing with reps. We've had the experience that the manufacturer doesn't have much of a track record in the territory, and all they really want to talk about is what it was like in the 'good old days.' With others - those that understand the process of working with reps and have some sort of an idea of what it takes to make it work - we'll ask what their experience in the territory has been and what they expect from us. In return, we want to know how they're going to support us in terms of training, product literature, etc. Also, who is the sales manager and what has his experience been in working with reps? Finally, we ask about communication. How are they going to keep us informed about what's happening from their perspective, and how do they want us to keep them informed about activities in the territory?"

Boyd adds when there's a good exchange of thoughts and opinions on matters such as these, then things usually work out quite well.

Working With Basic Understandings

Lou Basta has a lengthy track record as a rep. Basta, president of Design Metals, Old Chatham, New York, who has been a rep for 41 years, explains, "At the beginning of my career, I don't think we had an 'expectations conversation' per se. When the subject of expectations did come up, however, it might have come in the form of the principal saying something like, 'What are you bringing to the table?' or 'What's your list of accounts?' It never seemed all that important because it was so basic."

He does add, however, that he's presently working with a few rep search firms, and in the course of matching reps with principals, the subject of expectations and capabilities is generally addressed. "For instance, if I'm informed that a principal is looking for representation in this territory, we'll fill out a form that communicates what the principal expects from their reps, and it asks if you can meet those expectations." He says that some of the areas covered are territory coverage, ability to follow up, ability to read prints, knowledge of a specific manufacturing process, ability to travel the territory, etc. "These matters are all covered ahead of time so that when you finally sit down with the principal, you have a pretty thorough knowledge of what each of you expects."

Basta adds that he's never had to part company with a principal because either he or they failed to meet any agreedupon expectations.

Expectations - a hot Button

The timing for a conversation on shared expectations couldn't have been better for Steve Postma, president, Merritt-Pac Corporation, Cerritos, California. According to Postma, "This is a hot button of a subject and it's something we just went through. Recently we were interviewing an off-shore principal, and when it came time for us to ascertain their expectations, they couldn't tell us anything. I would ask them what to expect in terms of sales figures, and they just didn't know. It was very frustrating. The only way we could figure out their sales expectations was to conduct a marketing study for them. As a result, they inadvertently found out what the potential was for their products. The important thing for us was to determine exactly what we could do to assist them, and that's what we did. But that's what you have to do with any principal. You have to determine ahead of time how you can best help them."