Manufacturers – How Are You Evaluating Your Reps?

We’re at the time of year where seemingly many manufacturers review their independent manufacturer reps / lighting agents and contemplate change.

How do I know? Follow your LinkedIn feed. Notice the number of companies that announce new relationships.

Between now and the end of January this will continue. In some instances, there could be very good reasons. In others, seemingly it is change for the sake of change.

The question then becomes why?

Yes, companies and people change, however, in any given market there are only X available reps / agents.

From that your competition already is aligned with “their” reps / agents, so your viable options become limited unless

• You know your competition is dissatisfied with their rep / agents (and hopefully it is via “street-talk” rather than something else that is insipidus) and you think this is a way to win market share / increase sales (reality – conversions are difficult.)
• The rep is dissatisfied with the manufacturer.
  • Then the question is, “why?”
• You decide to pursue the rep/agent because you have a better proposition (more volume, better commission, easier to do business, brand, personal relationship, etc.)

But is change for the sake of change the answer? Is a deeper analysis, sometimes self-analysis, needed?

Evaluating Reps

Many rep decisions are left to regional managers and then approved by corporate management. Rarely do the decisions start at the top. Given this, the process then should be:

• What makes a rep effective for a manufacturer? In looking at their national network, what are common attributes? What are the common efforts / investments that are made by reps / agents? By the company? While it is typically not feasible to have every criterion exactly the same, just like you cannot hire every employee in the same mold, there are characteristics that are common to success.
• How are you defining “success?” Is it solely sales growth? Market share? Profitability? Distributor feedback? Are there objective criteria that are communicated. Is there an understanding of the underlying metrics of the business … the number of quotations, a win/loss analysis (after all, there are times manufacturers either cannot perform (inventory, shipping delays, etc.) or choose to “not be in the market / not meet the price,” generating specs, or other “steps to the sale” and business dynamics?
• A consistent, systemic, rep / agent evaluation process that integrates quantitative performance (for the year but also multi-year due to market and marketplace dynamics), internal team feedback (as “training” a rep on your systems / products is a cost), customer feedback, and direct reports (regional managers.)

And, at times, it is a personality clash with a regional manager … which does happen.

The Role of a Regional Manager

Over the past 5-7 years there have been more discussions in the industry regarding the role / effectiveness of regional managers.

For many companies, the role has evolved from one where regionals could make an array of decisions to one where they are a local communicator. Some are valued in the field for their ability to strategize, interact with end-users / contractors and/or distributors, some have good product knowledge and are “trainers” and then there are others where; to be nice, they are considered a “nuisance” and do not add value.

In fact, I have spoken with rep principals who have said that they spend time with a factory’s regional manager so as not to distract, and frustrate, their team. Some prefer to interact virtually with a regional manager because the line is small dollars and the regional does not add value and taking up one to two days of rep man-hour time becomes a waste of time and detracts from servicing customers.

As reps have become more sophisticated business leaders and have access to more information, they are considering the ROI of manufacturers on their line card … and of the distributors that they call on. We call this ROIT as their investment, their “inventory,” is time. It is the time invested representing a manufacturer. The administrative time (quotations, follow-up, expediting, training, meetings, etc.) as well as the sales time in front of end-users and distributors (which can also affect their credibility at these entities.) The same for a rep calling on a distributor. They need to focus on what the customer is interested in / will be of value to them, and what is profitable … and profitable is commission dollars / PO (or invoice). A high commission rate with little sales is still low commission dollars, especially if the line is time-consuming / exhausting.

The question for manufacturers then becomes, if you are changing reps in a territory, is it also a reflection of your regional manager’s effectiveness? If a regional manager is supposed to be your local leader, is the need / desire for change, especially when it is a rep you’ve been satisfied with for a while, a moment for internal review? Are you asking, “what could we do / have done better?”

And there are times where two companies decide that they are not a strategic fit for each other. This is the same discussion that companies have with underperforming, or disruptive, employees. Not everyone is “the right” fit.

Questions to Ask Yourself

But, in a market where there can be limited options to representation in a local market, the questions become

• How can ‘we’ (you) be better?
• How can we (collectively) be better?
• Do we want to be better and try?

Clear, reasonable expectations and good communication, coupled with consistency, can lead to long-term mutually profitable relationships. Change for the sake of change is not only disruptive but frequently does not lead to a better result. Strategic decisions are a different matter and the criteria, and communication of those, is different.

And it is fair to ask, “where do we stand on the line card?” so that both sides understand the rep’s strategy.

So, if you are contemplating change, ask yourself “why?” Is it a “they” thing? An “us” thing? Or, have the sides grown apart and it’s a joint thing?”

And, while the NEMRA Rep of the Future is a guide for reps, it is also a vehicle for manufacturers. Ask yourself … “am I providing my reps the tools to address each of these areas for me?”

If you are a manufacturer, ask us about our Rep360 strategy to help you gain insights or how to use the Rep of the Future and Manufacturer of the Future as guides for your organization.