The New Manufacturer Marketer … Reps

The recent issue of NEMRA’s Hot Wire had an interesting article on the marketing role that reps are now undertaking on behalf of a number of manufacturers:

Representatives Shoulder the Marketing Task

Many NEMRA reps report that as a result of their manufacturers downsizing, more marketing responsibilities have been shifted in their direction. If, in fact, there are more functions for the rep to perform, has this affected their relationships with manufacturers? With distributors? Has it impacted what services reps can provide? In addition, the question has to be asked and answered, are principals compensating reps for doing more? If not, why not?

One rep describes the trend this way: “What we’ve got here is a perfect storm of downsizing:
1) The customer downsized, so the customer’s buyer often is too swamped to get around to ordering something until it’s urgent.
2) The distributor’s purchasing is downsized, so the order is delayed getting placed on the manufacturer until it’s even more urgent.
3) The manufacturer has downsized, so their ability to respond to urgent orders is diminished. And sometimes we get the call to expedite before the order has even been sent to the manufacturer.”

Another rep agrees that her agency—just as so many others—is feeling the pressure as manufacturers cut back on their marketing operations and place more responsibility on their reps. The results are a bit of a mixed bag, she maintains. “We’ve got some distributors who are especially adept at marketing. Since we know our distributors and the needs of the marketplace as well as we do, things usually work out quite well. With the help of those distributors we can generally implement whatever plans manufacturers have to be executed. On the other hand, however, there are some distributors who may not be as experienced when it comes to putting a marketing plan in play. When that occurs we can wind up wasting a lot of valuable time and spinning our wheels.”

She adds that sometimes when the latter occurs there can be a certain level of frustration. “For instance, consider if a manufacturer has about a half dozen promotions he has scheduled for the year with the stipulation that the distributor has to commit to one of them. There’s no consideration for the fact that they’ve planned those promotions for the whole country with no thought for the fact it may not work here in our territory.

“My point is that if manufacturers require their reps to perform more in the marketing area, they have to be flexible to us, our customers and our territory.”

When asked if there should ever be any push back from the rep when it comes to shouldering additional responsibilities—often with little or no additional remuneration—she says “Certainly. But when we do that, we do it in a constructive and structured manner. We don’t just say we don’t want to do this we because we don’t want to. We’ll let them know why we don’t think the effort would be especially productive and it will probably not be worthwhile to proceed.”

As with any action, there’s naturally going to be a reaction, and that’s the case as described by another rep that this trend may be harmful and impact the relationship between rep and distributors. “Here’s how this evolves,” he says. “The manufacturers continue to push more and more functions our way, and they fail to fund the performance of those functions. What’s happened is that they’re trying to do more with less and through their efforts, we’re trying to do more with less. The logical outcome is that we can find ourselves in a situation where we have real concerns with performance issues. The manufacturer looks at the rep’s performance and is dissatisfied; the rep is dissatisfied with the principal; and the distributor looks at the rep and the manufacturer and is dissatisfied. It’s unfortunate, but that’s the real world in which we work.”

He continues that if the rep decides to push back, the manufacturer holds the ultimate trump card. “All he has to say is ‘If this isn’t working for you, there’s probably another rep who will take the line.’

Finally, a fourth rep reports that “Since this trend continues to grow, I’m finding myself in ‘Excel hell,’ writing reports back to our principals letting them know what we’re doing for them. As a result, this can affect my ability to get out there in the field opposite the customer to develop business. Since we have so many more functions to perform, time management becomes that much more important to us.”

Perhaps the entire situation is summed up by NEMRA President Hank Bergson when he says that “If we all operated in a perfect world, we’d realize that manufacturers contract with reps to gain and maintain customers and get orders. If every action reps take on every day is geared to accomplish those goals, then reps are performing their primary functions. When more responsibilities are thrown into the mix (e.g., printing catalog pages, doing things that other people don’t want to do, etc.)—often without adequate remuneration—the rep isn’t really doing what he’s paid to do. I’d ask the question, why would you operate that way?”

Aside from the compensation question (which for many reps has been reduced as manufacturers seek to reduce expenses, plus a slowdown in materials being sold), perhaps other issues need to be considered:

• If you are a distributor, do you view your marketing department as a strategic resource? Is it strong enough to handle the marketing for the manufacturer and does it know which manufacturers you want to market?
• While reps try, how many of them are skilled marketers?
• If manufacturers are cutting marketing staff, how do they expect to create demand for their products? How will collateral / product support materials get to distributors?
• If manufacturers continue to cut marketing and hence reduce their ability to build demand, and their brand, is there any wonder why generics / off-brand products are gaining a foothold?
• If a manufacturer can’t implement, or support, perhaps they need to increase their coop/MDF offerings to selected (marketing-oriented) distributors?
• And doesn’t this further emphasize the issue of the “have” and “have not” distributors? Will marketing groups come to the rescue of their manufacturers and distributors?

Reps can be effective salespeople, but they get compensated for closing/writing business, not being territory managers. Perhaps a conversation I had over 10 years ago with a rep in Philly will come true – someday reps will be compensated based upon non-sales metrics because the role will truly become expanded (but realistically most manufacturers are afraid to go this far.)

What are your thoughts? How does this impact you?