A key point often overlooked by both dealers and manufacturers is the level to which good sales representative organizations provide market insight and advice.
Because manufacturers representatives carry multiple, complementary lines, are involved with multiple trade organizations, sell to multiple channels of distribution, and can cost-justify going into more locations, they are privy to how the market appears from various points of view, geographic locations, and interests. They rarely serve only as a channel of distribution. Therefore, the market advice that manufacturers representatives can make available to the dealer, manufacturer, or trade organization is informed objectively, from a third-party perspective.
A Trusted Advisor
Most would agree that if a manufacturer, dealer, or trade organization is spreading its wings into a new area, for example with a new product category or geographic location, then the manufacturers representative can pose questions that may highlight areas worth considering prior to moving forward. And, when the companys management concludes that the decision to move forward is a good one, the honest thoughts and suggestions provided by the representatives will also help in constructing a marketing plan that addresses more of the issues or concerns that others will have with the new initiative. The greatest benefit of this approach is that all of this discussion occurs out of public view and scrutiny, thus avoiding costly mistakes, while enhancing the probability of a successful new launch.
Over the last 20 years, new tools have been created for serving the new, just-in-time market requirements of the custom installation and residential systems integrator. Arguably, one of the best executed plans for servicing this need was the formation of AVAD and other national distributor organizations within the last decade and their effectiveness in providing JIT fulfillment. Prior to this, many retailers seen doing business with distributors were looked upon less favorably because they were signaling their inability (not being large or established enough) to purchase on a direct account basis from the manufacturer. The better than direct marketing used by AVAD was just one way that this paradigm shifted to a more accepted mode of doing business for many dealers.
Now, because of the preponderance of more distributor-located products, the electronic systems contractor (ESC) can often pick up productsthat previously had to be ordered days or weeks in advanceon their way to the job that requires it. Knowing this, more dealers are offering same-day delivery and installation of many products. Furthermore, newer, smaller, and lower volume dealers that were too expensive to carry on manufacturers booksboth administratively and because of a level of financial riskwere transferred to the distributor for fulfillment and account management. This allowed manufacturers to better enforce volume requirements for well-established, lower risk, and more lucrative higher volume accounts.
Along with these changes came various levels of confusion, including from within the manufacturers representative community. In its least favorable light, some reps even questioned the viability of the their role in the business moving forward as seasoned representative principals seemed to forget why the representative model was so long ago deployed, despite its obvious effectiveness.
Selling Benefits and Education
For those of us within the leadership of IPRO, it was clear that we needed to continue selling our manufacturers products, while placing new emphasis and education on selling the benefits of our role to the market. What has emerged is the key role of the manufacturers representative as a market ambassador capable of being a manager of channels of distribution, while not being a channel of distribution.
Reflecting how this balance is becoming better understood, IPROs membership is at an all-time high and at three times the enrollment of approximately five years ago. It is also receiving more questions and dialogue from more manufacturers about how to look for and hire representatives than ever before. Even as long-standing manufacturers in our market are now feeling increased pressure and challenges in keeping pace with developing products in the market, they are also finding their resources for overseeing sales management being stretched further as well. So, too, are non-traditional manufacturers entering our market space. Their key questions are: How do I find the right market partners? And, how do I structure marketing and sales management so that they effectively integrate with the language and culture of this market? Just knowing where these non-storefront, highly mobile ESC businesses are located, who the principals and internal influencers are, and knowing what the key needs of their organizations are, is crucial when entering into and growing a business relationship with them.