Working With Reps to Develop New Business

by Charles Ingram,  VP of Sales & Marketing, Eriez Magnetics

So you’re a manufacturer and you want to develop new business, grow your sales, perhaps in a new geographic territory, new industry/market, or maybe you have a new product to launch. What are the factors any good manufacturer should consider to maximize the likelihood of success?

Just like when a manufacturer and rep join forces when they first begin working together, developing new business requires setting realistic expectations. The reasons most often cited by manufacturers and reps alike for representation agreement termination has to do with misunderstood expectations by the two parties involved. When you both get it right up front, the rates of mutual success increase exponentially.

To really increase the chance of success when working with reps to develop new business, use your rep council! Don’t have a rep council? Establish one! A rep’s greatest value to their principals is the relationships they have with the customer base in their territory. This strength enables reps to assist with assembling the strategy to meet (and hopefully exceed) the mutual objectives which are ultimately planned. Regardless, manufacturers will gain terrific insight on how to partner with their reps when developing effective strategies for business growth by consulting their eyes and ears in the field — their rep sales force. We do this regularly, and it works!

Next, get your arms around what it is you really want to accomplish. Structuring reasonable objectives before enlisting all of your reps is essential to aligning what will be your mutual goals in this endeavor. Reps will be looking for products to be complementary to their line card, leveraging the technical and process expertise they have. A well-outlined set of objectives will help a rep understand the scope of this new opportunity you’re providing so they may best determine how to fit their organization’s resources into the overall effort.

After a manufacturer has invested in product development, then budgeted the marketing costs to launch a new product or enter a new market, partnering with your reps is next. There are several alternatives to consider, any one of which may fit your particular objectives. In reality, a rep needs to feel that their time is adequately compensated and their sales success is rewarded.

Some of the compensation methods we’ve used at my company when developing new business with our reps include these:

  • A monthly fee as a baseline.
  • Higher than standard commission rates for sales of specified products or sales into specified markets.
  • Bonus or step-up tiered commission rate when goals are achieved.

Each of the above compensation methods were implemented for a specified period of time and cost far less than trying to do the spade work with factory-direct staff alone.

Finally, who’s the most important player in your new business development plan? The customer, of course! (No bonus points for a correct answer, as the customer is always the most important player for both principals and reps!) Be sure to identify up-front the support your customers may require so obstacles and challenges can be overcome and your momentum isn’t interrupted.

Charles H. Ingram, in a career spanning over 37 years, has served in management at several leading tool manufacturers as well as led factory-direct, distribution and independent manufacturers’ representative selling organizations throughout North America and abroad. Ingram is executive vice president and chief marketing officer for Eriez Magnetics, which designs, develops, manufactures and markets advanced technology equipment for magnetic separation, vibratory applications, metal detection, and materials conveying and controlling applications from 11 manufacturing operations worldwide. He is the first manufacturer elected to the MANA Board of Directors. He received a bachelor’s degree in political science and history at Denison University, Granville, Ohio, and completed advanced management studies at the University of Tennessee.