It has been stated that certain events in US history can be cited as specifically changing our economic environment. Until a few years ago, every example was a war – Revolutionary, Civil, World War II, and Vietnam – until the last, the Pandemic

We know its effects on the economy: severe recession, job losses, supply chain severity and more. This was followed by government subsidies that allowed pent up demand spending which was quickly stimulated without improving the supply chain or joblessness issues. In turn this created inflation as prices increased at near record levels. Pricing had begun to stabilize until the tariff war began.

Cause & Effect … The Changed Rep Role

This column aims to discover how these effects changed the course of relationships and expectations between manufacturers and their representatives.

The issues stated above often placed unparalleled margin issues, often causing manufacturers to direct more operational responsibilities to their sales force. Sales continued, but costs increased and there was a lack of necessary controls. The emphasis was no longer what you could sell, but how costs would be decreased. Top management positions went to operational or IT people with little to no sales experience   This margin loss also helped create mergers and acquisitions of manufacturers.

The move to add responsibilities to representatives created margin issues for the representative.

Reps now had additional responsibilities whether clerical or adding selling expenses through software or factory sales support in the way of field salespeople. Reps saw manufacturers and distributors being purchased and becoming either regional or national. This allowed alternatives to grow income, and allow them to meet their manufacturer’s needs for equal vision, values, and strategies

Reps also needed to lower their cost of sale by either:

1.  Expansion of geographic territories to share their operational costs over a wider territory and revenue base
2. Entering markets not previously sought (lighting, gear, HVAC, industrial)
3. Merging with other reps and growing into “super reps”

What Do Manufacturers Now Look For

I recently spoke to a number of manufacturers and asked them what they seek. While it differs by size of manufacturer, there were trends:

1. Needed geography coverage
2. Synergistic manufacturers and products
3. Are they committed to growth & investments? If they go into other territories or markets, do they invest in what is needed or merely “bleed” their existing personnel?
4. Do they have a succession plan for business perpetuity?
5. Can their relationships and territorial knowledge create market and channel development and growth?
6. Do they sell a mix of “our” products? Are they selling “our” breadth?
7. Do they provide feedback on won-loss opportunities and close ratio
8. Do they have specialization into channels, products, and marketing including the utilization of data and analytics with factory electronics and CRM?
9. Line Conflicts: we know they will have them, but how will they be managed to assure our necessary sales? Can we rationalize the conflicts?
10. Is there a strategy to train customers on our products and add value?
11. Market share and market penetration
12. COMMUNICATION:  This is really #1. Do we know what their strategic plans are? How effective and often are we working together on being more successful and effective on meeting mutual goals?

It is certainly agreed that communication is far more than having short meetings at NAED or NEMRA. It needs to be ongoing and often, and at multiple levels (I’ve previously written about regional managers!)

My next article planned is to interview reps on the changes they now pursue when evaluating manufacturers. Reps that are interested in being interviewed, please let me know

I would like to thank the many manufacturers who shared their thoughts with me. Please contact me also if I might get with you for your visions of our industry.

The more industry people I can speak with, the better and hopefully more valuable our information.

Gene