One of the most important aspects of my business is helping companies with their relationships with reps. Certainly, it’s no secret that the rep-principal relationship is one of the most challenging that industry professionals face. This relationship is particularly challenging in the PCB industry with its tremendous ups and downs and consistent struggles with the importance of sales and marketing.
In most instances, the scenario goes something like this: A company decides that they need more sales and want to leverage their budget, so they try to sign a network of reps (this is not easy, but that’s for another column). Then, the company signs the reps (note that they should visit the reps in the near future or have the reps visit them; a good rep would insist on doing this), and then forgets about them, expecting that if the reps are good, then the company can expect orders to come rolling in at any time.
Soon, the company starts receiving quotes, but the chances are that they are for all of the wrong kinds of things. If they are a high-tech military fabricator, all they will see are requirements for double-sided boards, and if they are a flex company, they are only receiving quotes for rigid boards. Soon, they realize that this is not going to work and that the reps they hired are no good. Worse yet, after a series of these failed efforts, they come to the conclusion that the rep thing just doesn’t work.
Here is where this company went wrong:
- The principal has not relayed to the rep what business they are in or what their niche is, and the chances are that they don’t know either
- They have not communicated with their reps after the initial courtship and signing; they have not gone out to the territory to visit the reps nor insisted that the reps visit their facility
- Sometimes, they have not even communicated to their own team that they have signed new reps
- They have not given the reps the right tools (e.g., paperwork, copies of quotes, orders, and invoices) to do their job
- In short, they have invested little or no time in managing the reps
There is a very old adage that is as true today as it was 50 years ago: “You will get out of your reps what you put into them.” Follow that rule, and everything will fall into place. Now, let’s talk about how to find the best reps for your company.
To find and sign new reps, choose key territories, and make sure that you know which territories are best suited for new reps. I prefer account-by-account; they can have a territory, but they have to “register” the accounts they want and promise to call on. Then, once the reps are signed, you need to educate them and develop territory and follow-up plans with them.
Next, you need to ensure that you develop a great partnership with your reps, which means that you should do the following:
- Have minimum house accounts
- Have clearly defined responsibilities and territories
- Pay on time (this is critical)
- Provide the right paperwork
- Provide technical support
- Have strong inside sales
- Have a solid existing customer base
- Be financially strong
- Be fair
- Have a solid and well-defined niche
- Have a good strategy
- Have a good marketing plan
- Provide lead generation
- Have excellent performance
- Have a great product
The most important thing you have to do is treat your reps with respect. Treat them as a true partner; treat your reps the way you want to be treated.
Here are some key elements to a rep-principal relationship that will guarantee both short-term and long-term success:
- Communicate your strategy to the reps, including very specific guidelines as to the type of customers and business we are going after
- Be as aggressive as possible when it comes to attracting, winning, and keeping new accounts, especially at the beginning of the relationship when your support of the rep is particularly crucial
- Generate leads for them to follow up and have a great lead generation program
- Create a new account incentive clause that will be added to their contracts, which should be focused on encouraging the rep to find the right accounts as quickly as possible; for example, how much would you pay for a new account?
- Institute monthly rep team meetings to make sure that the lines of communications are kept open
- Institute regular one-on-one meetings with the reps so that you can talk about their progress and find ways to succeed together
- Set up a plan for regular customer visits with the reps in their territories
- Make the reps so much a part of the team that you can count on them to help you find other reps in territories that are not yet covered; if you have the right rep, you can even offer them the opportunity to add territories on their own as long as they find the right reps to join their firm
And finally, treat your reps as part of the sales team. Make them accountable. Develop goals, forecast, and then stick to these throughout the year. My number one pet peeve is salespeople without goals and forecasting. How can you go in any direction if you don’t know your final destination? Instead, set realistic goals with your reps (e.g., a month-by-month, account-by-account forecast each year; a goal for the number of new accounts the rep will bring in, how much time the rep will dedicate to your account). In the end, it all comes down to communication and mutual understanding; if you have these two things, you will have a successful rep-principal partnership.
It’s only common sense.
Dan Beaulieu is president of D.B. Management Group.