“Guns for Hire”
By Roger Bostdorff
I have had multiple clients engage my services to evaluate their company’s sales process. Some of these organizations have full time sales people on their staff but many of the organizations that I have done this analysis for are utilizing multiple manufacturing rep organizations. My process includes interviewing both the direct employees of the company that are involved with sales and their specific manufacturing rep organizations or a sampling of the manufacturing rep organizations.
If a company selects to go to market with a direct sales force they have selected the approach with the most control. Since they are your employee you have the right to manage them and provide significant direction. However, this is also the most costly alternative. Whether that salesperson sells anything or not you pay a salary and benefits at a minimum.
If you go to market utilizing a manufacturing rep approach you pay either nothing or very little unless they sell something. At the same time you have much less control of the sales force with the manufacturing rep approach. They are not your employees and the specific manufacturing rep may be handling not only the line of products that my client wants sold, but also 10-20 additional lines of product as well.
I have traveled to Denver, St. Louis, Boston, and Charlotte, Chicago, Atlanta, Dayton and many other cities to interview these different manufacturing rep organizations. The objective is to understand what my client could be doing to improve my client’s sales process with this indirect sales force. I also want to understand how the manufacturing rep goes to market for my client.
We discuss the manufacturing rep’s line card. (How many different manufacturing companies they represent). We discuss how much revenue they derive from my client’s products as opposed to the other lines of products they represent. How my client ranks here typically is an indication of the amount of “mind share” they get from this particular manufacturing rep organization. If my client’s product line shows up in the top 2 or 3 revenue producing product lines for that manufacturing rep, the mind share goes with it. In fact, it may be the chicken or egg here. Does the mind share come because of the revenue or does the revenue come because of the mind share?
The same client can have manufacturing rep organizations that fall into the top, middle or bottom category of revenue producers. Just like one client can have direct reps where some are producing great results, some mediocre and some very poor. I set an appointment with one manufacturing rep and when I arrived at his office he had forgotten about the appointment. Any bet on where my client was ranked in his mindshare?
However, I have come across an interesting observation. If a manufacturing company has a direct sales force they have a manager of that sales force. The direct employee salesman’s responsibilities and to some extent paycheck is controlled by this manufacturing company. The company has the maximum control and leverage over the actions of these employees. Yet, when a company engages with manufacturing rep organizations, where their control is less, many times the manufacturing company has no one coordinating the activities of this external sales force. No one is focused on nurturing the relationship nor focused on educating and improving the manufacturing reps opportunity to earn more income, thus increasing mindshare as well as revenue.
Think about it a minute. Doesn’t make sense that if a manufacturer decides to utilize an external sales force, rather than direct employees, that this would dictate that the manufacturer would need even greater effort and involvement by a sales manager (coordinator) to insure more mindshare of the manufacturing rep organization?
If there is a common thread here relative to a company being successful by utilizing the manufacturing rep “go to market” strategy it is just that, companies have a higher percentage of success when they focus on working with these manufacturing rep organizations much more closely. These non employees need to feel a part of the team not just a hired gun! There are ways to make that happen but it starts with understanding that this has to be a priority. Are the manufacturing rep organizations that are selling for you producing to your satisfaction? I wonder why not?
Roger Bostdorff is the President of B2B Sales Boost. He spent over 30 years with IBM in sales and sales management. B2B Sales Boost is a consulting company helping organizations improve their sales and overall business processes. He is also available for business speaking engagements. You can find more regarding B2B Sales Boost on the web at www.b2bsalesboost.com or calling 419-351-4347. If you would like to receive the B2B Sales Boost Newsletter please send an email to roger@b2bsalesboost.com.
