Why I Love to Find My Competitors’ House Accounts is one of the most popular articles ever to appear in Agency Sales magazine. In this podcast the article’s author, Doyle Evans, president emeritus, Pinnacle Marketing, Inc., Raleigh, North Carolina, discusses how accounts his competitors try to service without a manufacturers’ representative are low-hanging fruit for him to convert to his principals’ products.
In the article, Doyle notes, “I’m referring to the principal that assigned a manufacturers’ representative to a territory, but holds back one or more customers as so-called ‘house accounts,’ or customers that will be managed directly by the principal.
“The reasons for doing this vary, but usually fall into four categories:
- “We have 100 percent of the customer’s business, and the rep would add no value.
- “The business is low margin and we cannot afford to pay commission.
- “The customer purchases our legacy products, and we are the only game in town.
- “The customer requested factory-direct coverage, probably thinking that they would receive lower pricing.”
When he finds competitors’ house accounts, continues Doyle, these “house accounts can be low-hanging fruit for a multi-line manufacturers’ rep. Even though the direct supplier may call these ‘key accounts,’ truth is, house accounts are often taken for granted by suppliers, as they assume their business is safe or ‘locked in’ and they have a tendency to drop their guard.”
And because Doyle recently executed a succession plan to transfer his manufacturers’ representative firm to its next generation, he also shares some insights on how he managed that processs.