By Bill Field
Ask any manufacturer about independent manufacturer representatives, especially those with critical roles in sales and marketing, and you’ll have no shortage of opinions. It is equal parts, good, bad and ugly. It’s a subject that is emotionally charged and steeped with personal experiences that inform deeply ingrained mindsets about the value and effectiveness of a go-to-market strategy that utilizes independent manufacturer reps. The pros and cons are virtually endless.
On the positive side, manufacturer reps offer immediate penetration into a territory based on long-term relationships that are already deeply embedded. They’re well respected and valued for technical expertise and knowledge. Oftentimes, these rep firms have ancillary product lines across their line card that align closely with your products. In many cases, the most appealing aspect is a commission compensation model that allows manufacturers to have no “financial skin in the game” as opposed to a costly direct sales force strategy. Reps are often seen as a quick fix and a route to immediate sales, without a significant financial burden associated with a direct sales model.
Conversely, from a negative perspective, manufacturers complain about having to compete for share of mind and sales time with competing companies for whom reps sell. Many times, reps are criticized for taking the path of least resistance to make the easy sale to realize immediate commissions. Manufacturers feel they don’t have the depth and breadth of connections and relationships to advance their position, or complain that they literally hand the project to the rep having done all the leg work with the rep coming along for the ride. That’s where commission arguments rear their ugly head and rep/manufacturer relationships begin to unravel.
It is not unusual that manufacturers migrate away from a rep structure to one of employing a direct sales force. The economic climate and market conditions continue to change and the manufacturers migrate back to utilizing reps as a quick and cheap fix. This musical chairs sales philosophy has gone on for decades across every conceivable industry or category where manufacturer reps exist. This shows no sign of abating any time soon.
The companies that have proven to be successful in employing a manufacturer rep sales approach are those that commit to supporting and working with their rep partners as if they were employees. It requires viewing reps as a forethought rather than an afterthought, which is sadly often the case. At Victory Energy, our industrial and firetube reps are our face to the market. They’re an extension of who we are and how we express our concept-to-completion point of difference. Our success is very much dependent upon their success. The relationships we forge are built on trust. These are the tenets of success that have worked for us.
When rep and manufacturer relationships are established based upon these pillars, it sets the stage for mutual success and service longevity. The problem exists that there is far too pervasive sentiment of manufacturers asking everything of reps but requiring nothing of themselves. They employ a “set it and forget it” sales methodology. They rarely visit the territory or make joint sales calls. It’s a one-way street that is pointed toward an ultimate destination of failure down the road where the rep takes the fall.
When the rep/manufacturer relationship is right and running on all cylinders, both sides are working toward a common goal. Reps have a deep understanding of the company culture, the products and the people of the company that they’re selling for every day. They’ve visited plants, participated in trade shows, sales conferences and rep councils, and worked projects side by side with all departments of the business — sales, engineering, project management and field services. They know the company inside and out. Only after this deep immersion are they uniquely qualified to represent and sell products. Good manufacturers understand that you get as much out of a rep relationship as you put into it. You must embrace reps and make them feel as though they’re truly a part of your culture. Too many manufacturers hold reps at an arm’s length and communicate on a need-to-know basis.
With Victory Energy’s vast array of steam solutions — from watertube and firetube boilers to HRSG’s and burners — we require our reps to be extremely technically savvy with extensive knowledge in many industry category applications. With a buying decision team that includes multiple authorizers and influencers, they must have relationships up and down the buying chain of command. Projects often last months and sometimes years. While we have a strong presence at bidders conferences and finals presentations, our reps maintain the week-to-week and month-to-month selling activities. They’re invaluable in keeping a project sold in and moving forward. They’re advancing the cause of Victory Energy products and services at every corner and throughout every office and cubicle. Without these on-going selling efforts, we’re left to communicate through electronic mediums. There is no substitute for the face-to-face selling that a manufacturer’s rep provides.
The value of reps is often overlooked or just plain misunderstood. Many engineers count on reps to keep them informed about new products and services as they couldn’t possibly individually see every manufacturer’s direct salespeople. Reps are viewed as invaluable resources in helping to make engineers’ jobs easier through ongoing product and solutions education. When they’re included as part of a manufacturer’s team, reps are a valuable asset in beneficial ways. This inclusionary behavior elevates the position of both parties.
The analogy of a rising tide lifts all boats is a truism with great manufacturer/rep relationship models. The best relationships are those when both parties are rowing in the same direction, totally in sync with each other. It’s a beautiful thing when it happens. It takes commitment and resolve to assure that manufacturer reps are totally part of the team. That way manufacturers can tap into everything they bring to the party — from relationships and territory presence to sales acumen and industry knowledge. Make 2019 the year that you truly embrace your rep partners. You and your business will be glad you did.