Tips for Manufacturers:
How to Conduct an Effective Interview with Rep Agencies

General Considerations
Naturally, reps have choices when adding new lines and they want to make sure that an alignment with your company will be financially rewarding to their agency, as opposed to other principal choices they could be considering. Interested reps will be as intently engaged in the process of interviewing you as you will be in learning as much as you can about them.

A rep wants to know a number of things about your company. One of the most important considerations is the potential effect of a new association on his existing customers. Would taking on your line cause a loss of business already arranged for his other principals with existing customers? In other words, a rep will be interested in your quality assurance and adherence to delivery expectations so as not to cause problems with "his customers" and existing principals.

Of course, money is also a big issue. Are you willing to pay a retainer? What existing business in the territory are you prepared to turn over to the rep? The rep wants to know if the size of the commissions you will pay could tempt you to replace him with a direct salesperson. In other words, does your CEO or CFO become distressed when writing large commission checks?

Other money matters reps have in mind include your answers to these questions:
• Is your company financially secure?
• How much business currently exists in the territory?
• How will this be turned over?
• When will commissions from your company be paid?

Process of Interviewing
Take your time in conducting the interview. Start with phone interviews and then meet with the candidates individually at some neutral site in the territory, e.g. airport, hotel, or restaurant.

Next, invite the best candidates to your facility for a plant tour and a meeting with your management team. It is important that they meet all the company people who will manage and support their activities. Generally, the rep pays his expenses to get to your location, but once there your company should offer to pay for lodging and meals as necessary.

Lastly, schedule a meeting with the best rep candidates at their offices before making your final selection. If it's a multi-person agency, make sure you get to know (i.e., interview) everyone in the agency who will be selling for your company. Also, get to know the inside sales support staff you will be working with.

Keep the process moving forward briskly so as to not lose the rep's interest. Yet do not rush it to the point where you make the wrong decision.

Interviewing aims at achieving an exchange of thoughts between two parties -- the principal and the rep -- to allow each to assess business fit and chemistry. One party doesn't do all the talking. For best results, it truly should be designed as a free and open exchange of ideas and information.

Questions You Should Ask of a Prospective Rep
As your rep search consultant, Pennswood Partners will have already received satisfactory answers to many of these questions during our several pre-screening interviews with the interested candidates we surfaced in our search process. However, it would be good for you to validate this information through your own questioning and ask additional questions as well.

Territory Coverage
• Does the Agency cover the territory adequately?
• How many people are in the Agency and where are they located?
• What individuals in the Agency are going to sell for your company?
• What are their backgrounds (education, business and industry-specific)?
• Will inside sales support be adequate?

Agency Specifics
• What has been the sales volume over the last couple of years?
• Why up? Why down?
• What method of reporting and correspondence will be available? (email, phone, fax, tapes, etc.)

Principals / Lines
• Who and what are they?
• How do the lines "sell together"?
• Is there a conflict? (A "yes" here is completely unacceptable!)
• What lines would "sell with your company"?
• Why is the rep interested in the your company? (The #1 question!)
• Do you have the time and talent in your agency to take on my line and really do justice to it for our mutual benefit? (Also the #1 question!)

Markets / Customers / Sales Venues
• What venues do you call on?
• Who are your leading customers?
• What are your thoughts regarding how you would introduce our line in your territory? If you want to think about that, can we make it a high priority item for discussion at our next meeting"?
• What can you do for me?

Summary
Regardless of the specific questions, you and the rep candidates are really striving through an open dialogue to determine the following:

• Are both parties interested in making this work?
• Are both parties intent on making this work?
• Do both parties have the "capacity" to make this work (manufacturing capacity to fulfill orders from your standpoint and the ability to give you quality selling time from the reps' standpoint)?
• Does the Rep call on the right markets, customers and venues? Are these congruent with the markets, customers and venues of primary interest to your company?
• Does it make economic sense -- short term and long term -- for your company and the rep agency to get together?

Most important, remember that the Golden Rule is still the best rule to guiding effective business relationships between principal and rep agency.