As the foodservice market continues to evolve, rep groups and manufacturers are seeking new ways to better support channel partners and end users. We’ve asked Dr. Revenue – nationally-known sales and marketing consultant John Haskell – to share his thoughts on potential best-practice considerations. Following is Part 1 of a four-part series, focusing on the reasons for different thinking in alignment decisions.
Power Reps—What? Who? How?
If you associate with Power Reps you’ll have marketing and sales power in your territories.
Regardless of industry, after years of consolidation, all territories have several Rep organizations that stand out above the rest.
If you are a manufacturer does your line merit the attention of a major Rep organization? If not, why not?
What does it cost your manufacturing company to manage your sales program? If you have a small number of Rep firms that are totally professional with advanced systems and procedures your cost per territory or per substantial customer is less.
Small Rep Firms cost the manufacturer money and produce much less revenue.
How to beat the typical manufacturer mind-set if you are a Rep.
What is the manufacturer’s impression of Reps? In the Food Brokerage business the manufacturer knows—the Brokers are absolutely essential to his business. If you are with a smaller, weaker broker you lose. If you are with a major Broker you win. In that business the manufacturer knows that the Broker has superior people, superior facilities and superior capabilities.
In some industries groups of larger Reps have emerged as “Associations” working together to improve their operations, developing custom CRM programs and providing data.
In many other industries the evolution is in much earlier stages. In the industrial tool world, reps are consolidating and learning to deal with the large manufacturers who control most of the business. The Reps with more feet on the street are the Reps who grow market share and revenue.
In the Foodservice Equipment and Supply world the Reps are gradually consolidating and smaller Rep firms are being gathered up by larger Reps.
In some industries groups of larger Reps have emerged as “Associations” working together to improve their operations, developing custom CRM programs and providing data to be analyzed and compared.
In other industries Reps have lost out to direct sales teams because the manufacturer determined that they could field a better, smaller sales force and deal with a shrinking number of customers. And at the same time these manufacturers significantly reduce their sales expense.
Industry by Industry Sales Force Facts:
If you are in a business like Foodservice Equipment as a mid-size or larger manufacturer you have to ask yourself, ”Where do I get the most bang for my commission buck?”
This is the key question. The more commission paid out the better assuming that the sales team is critical to getting the business and building market share.
When the sales force controls the business within the distribution channels the manufacturer has to develop relationships with Reps who have power the way the big brokers do in the food industry.
As the Reps consolidate they develop superior systems for doing business. The manufacturers need to carefully examine the way the Reps are doing business. The manufacturers should evaluate the way the Reps work their territories and utilize their personnel and facilities to maximize business.
About Dr. Revenue
John Haskell, Dr. Revenue® is a professional speaker and marketing/sales consultant with more than 40 years of experience working with companies utilizing manufacturers’ reps and helping rep firms. He has created the Principal Relations X-Ray, spoken to hundreds of rep associations and groups, including many programs for MANA and MAFSI. He is also a regular contributor to Agency Sales and other trade magazines. For more information see www.drrevenue.com or contact John at firstname.lastname@example.org.
Next Time: How to Determine Real Differentiation