by Douglas Bower
That’s a very short declarative statement that brings to mind reps and manufacturers skipping through the morass of the business market place enjoying mutual profitability and growth. But underlying that declarative statement is a plethora of details that can get in the way of a successful working relationship.
Let me offer this cautionary tale of a manufacturer that made product marketing decisions that influenced the effectiveness of its rep network, not in a positive way.
This large manufacturer with a well-established rep network had a history of being very rep friendly and offered significant compensation for functions performed by their rep network. This manufacturer was in the enviable position of having other reps in the market lining up to join its manufacturers’ rep network. The manufacturer had been using reps for over 30 years and had long-term relationships with its reps. Basically it was one of those rep‑manufacturer relationships that is pointed to as a splendid example of reps and manufacturers working together.
Here is where the relationship became strained. The manufacturer introduced two new product lines to the manufacturer’s reps. The first of these lines could be considered a line extension that utilized the current channel. Unfortunately this product line was not well-positioned and needed a great deal of pioneering into the marketplace. The second product line offered no synergy to the existing products of the rep network.
The result of adding these two additional product lines was the dilution of the rep’s efforts in the marketplace and a loss of focus on the existing products. As one would expect, this led to lower sales and commissions for the existing products. After these not so stellar results, all of the various scenarios that you can envision were attempting to save the situation. All of them were unsuccessful.
The moral of this cautionary story is that reps and manufacturers need to really work together. This rep manufacturer relationship was dominated by the manufacturer and therefore the manufacture could impose business decisions on the manufacturer’s reps that were not ultimately in their interest.
If the rep manufacturer relationship was one of truly working together, then the reps would have felt comfortable enough to object to the addition of two new product lines.
Reps and manufacturers need to work together in a truly honest business relationship. There needs to be trust and honesty on both sides the relationship. A rep or a manufacturer need to be able to comment positive or negatively on business strategies.
There are some functional things that you can do to try to ensure that you are working together for a mutually beneficial relationship. A couple of these have been covered in previous editorials in Agency Sales magazine. The existence of an effective rep counsel can help reps and manufacturers work together. Also an annual discussion between rep and manufacturer regarding strategic directions for both can facilitate the business relationship and avoid missteps.
When reps and manufacturers truly work together it can be one of the most effective and efficient methods to go to market.
Douglas Bower has experience in sales and marketing management with titles of National Sales Manager and Product Line Marketing Manager. Bower has also been a manufacturers’ rep in the elastomers industry. He holds an MBA and a BS degree and is a Certified Lubrication Specialist.