Establishing a solid presence within multiple geographic markets typically requires a greater number of company-employed direct sales representatives than many manufacturing firms can afford. Independent sales reps offer an opportunity for a company to enter many markets simultaneously and service them economically.
The use of manufacturers' representatives as your field sales force will provide a number of important benefits. You will get:
• professional, high-quality salesmanship
• regular calls on an established customer base
• selling expenses fixed at an agreed percentage of sales
You will be able to put a trained, effective sales force into the field faster with independent sales reps than by hiring and training your own in-house sales team. Reps will get you noticed in your marketplace. Quickly.
More important, manufacturers' reps add nothing to your overhead. You pay commissions solely based on selling performance. Reps provide for their own office, health insurance, automobile and travel expenses.
As a manufacturer, the biggest hurdle you must overcome in working successfully with independent sales reps is adjusting to the fact that they are independent. They are not your employees. You are not their boss. You really cannot control them. You cannot tell them what to do, who or when to visit, or even the type of sales presentation to use. Nor should you try. If long-term success is your goal, then manager/subordinate relationships have no place in your manufacturer/rep alliance.
The agreement between you and your rep is a business partnership in which two independent enterprises agree to work together to achieve a common objective. In this case, it is to derive the maximum profitable penetration of the trading area(s) that you define.
The secret to successfully marketing through independent sales reps is knowing how to motivate them. Simply put, long-term success requires you - the manufacturer - to provide the understanding and the all-around support that moves reps to outstanding performance.
For the past 30 years, study after study has identified the primacy of a mutually compatible relationship as an important motivator for independent manufacturers' reps.
The quality of the relationship directly affects the amount of sales time reps give to the products of those they represent.
Reps appreciate bilateral marketing and sales planning. They respond favorably to principals who seek their advice. They prefer sales quotas and forecasts to be jointly derived rather than imposed.
Recognition is important. Reps genuinely appreciate letters of commendation that acknowledge the excellence of their sales efforts. Your letter of appreciation, framed and displayed for all to see, is a powerful motivator for any rep.
The dominant influence for many reps is the opportunity to earn the "highest commissions possible" while working for a trustworthy principal on a long-term basis.
From the rep's perspective, a trustworthy principal shuns complex commission arrangements and is dedicated to easy-to-understand standards of fairness.
Those principals who keep things simple, logical and fair find that reps respond in kind. More sales happen!
Just as a compatible relationship with the principal is important, the reputation and image of the manufacturer and the manufacturer's products are also very meaningful.
Finally, "sales support" and "product training" round out the list of key motivators for reps.
Checklist of Proven Rep Motivators
1. Ask for advice from your reps. Acknowledge that your reps probably know more about their territories than you do. Extend appropriate consideration to their insights and opinions.
2. Share your marketing goals openly. A realistic mutual appraisal of expected sales volume will invariably produce better sales performance.
3. Pay commissions on time, preferably upon invoicing the customer. Offer escalating commission rates for increased sales.
4. Reject envy. Never cut commissions - even if they exceed your own salary and compensation. Be certain your CFO has no problem with writing a big check. Pay your hard-working rep promptly.
5. Send letters of praise for good work.
6. Provide product training. Explain your products, product applications, and technical support processes in encyclopedic detail.
7. Provide sales manuals and professionally designed sales literature. Make sure all your catalogs, samples, data sheets and other sales support materials lend themselves to fostering successful sales outcomes.
