by Raymond Wright
The following article originally appeared in the IPRO e-newsletter.
There are at times some good reasons, almost always specific to performance in an individual territory, to let a representative go who has failed to produce good sales performance and needed relationships. Change will occur as a normal process.
Professional representative firms always offer a high quality level of sales, service, and support that no manufacturer's direct salesperson can match, and they do so less expensively than a direct sales force. They know the customer and their needs more than those who can only see the customer once or twice a year. They create partnerships with their customers that, in turn, create the benefits of long-term relationships. They believe in their business. They live in their business. They are good for each other.
A few manufacturers have chosen to terminate their representatives (in fact, their entire sales forces). While many question these decisions, these actions do highlight the poor choices that some manufacturers are making at a time when they need experienced sales and service the most. It is no secret that sales are down and that many customers have scaled back or have closed their doors entirely. Someone is always to be blamed, and the sales force is always the first target. The blame falls in spite of a rebound in business seen by integration companies from the lows of a couple of years ago - and many are actually thriving.
These thriving companies have a business model that offers service and support, and they depend on industry partners to support that offering. These companies, along with the manufacturers who provide their products, strive to make a customer happy, produce new and innovative products, and support each other in tougher times.
So, why would a manufacturer fire its entire sales force? Do they fail to recognize that the world is experiencing a recession? Did they stop listening to the news? The answers are usually basic and stem from a lack of information in the decision process. Usually a manufacturer "expects" things from the market that no longer exist. They expect double-digit sales increases regardless of the economic realities. They expect good customer service to no longer be a part of their business model. They expect products that are no longer relevant in the marketplace to be sold, versus other brands that are better and deliver more value. And, amazingly, they expect their customers to react with favor to less interaction, less problem-solving, and less customer service. Good luck with that. We've seen it happen before.
In hindsight we have learned that these decisions often have reflected personal issues rather than business decisions. Corporate bonuses, job security, and over-commitments force decisions that impact the entire sales chain. Factories reduce staff, representatives change territories, and the loss of the investment of the integrator (along with less financial stability) ripples through the chain. These decisions ignore the fact that a dealer is a conduit to the consumer and not the consumer, himself. They also prevent the dealer from creating awareness with the consumer of our products and our industry. We all lose.
These events are not new. The historic cycles come, go, and return. While one manufacturer makes this decision, multiple manufacturers with new and exciting products of greater value are asking, "How do I find a professional sales force?" The constant in any territory is the representative. As factories and dealers rise and fall, the representative continues to seek new and profitable business and provides the service and support to make it all happen. Today the representatives are more aggressive, more creative, and more innovative. They are changing their business models to create opportunities that will support the needs of their customers and that will find new opportunities and new customers.
The manufacturer who chooses to take its business away from independent dealers and representatives live and die by those decisions. Our individual choices create our future in our industry. Let the marketplace do what it does best: equalize....
Raymond Wright is the executive director of IPRO, the professional sales representative organization. Visit avreps.org.