Most building material companies do a poor job of working with independent reps.
In the beginning, when they want more sales, they see independent reps as a sales force with no upfront costs. What an amazing deal!
That optimism is short-lived. Whether the rep finds new business or not, the manufacturer frequently ends up dissatisfied.
If the rep makes a sale, the amount owed to the rep seems too high. I’ve heard a lot of building materials executives use terms like pirate, thief, crook (and a few words I can’t print here) to describe the reps they rely on.
If they don’t make a sale, they blame the rep. It’s never the fault of the product or the company.
Independent reps are not right for every company. But if you have chosen to use independent reps, why not get the most out of them? Too many companies have an adversarial relationship with their independent reps, and that ensures the rep’s performance will continue to deteriorate.
That doesn’t mean independent reps are incompatible with building materials. There are a few companies who are very successful at using independent reps. I’ll share their best practices, but before I do, I’m going to put everything in context.
Startups and foreign companies often ask me to help them find independent reps to sell their products. One of my first questions to them is, “Why would a rep want to sell your product?” They always give me the same answer: “To make money.”
That’s not good enough. The people you want to sell your product already make a lot of money.
Almost all of these companies are looking to get something for nothing. There are a few companies with a well-known product, good sales, and a good reputation. They represent a significant percentage of a rep’s income. Most building material companies who use independent reps, however, don’t have all of these benefits. They need to have a product reps like to sell.
Ideally, the company should be investing in marketing that helps the rep by creating awareness and interest with prospective customers.
If you’re not happy with a rep’s performance, don’t start by blaming them. The problem might be on your end. If it is, a new rep won’t be able to fix that. So, take a good look at yourself and see how you could be a better partner to your reps.
Put Yourself in Their Shoes
Reps earn their living by selling the products they represent. Most of them will carry eight or more lines that are in the same category so they have different products to present their customers.
They will cover a geographic territory and focus on certain types of customers, such as plumbing wholesalers, lumber dealers, roofing contractors or architects.
They also understand the buying process and can talk with everyone involved. For example,
if they focus on architects, they can usually also talk to distributors and general and installing contractors.
The rep’s business is based on knowledge, relationships, reputation and selling skills.
If they agree to sell your product, yes they have an opportunity to make money, but they’re also taking on a risk. If they sell your product and the customer has a bad experience, they may lose the trust of that customer that can hurt their future sales.
No matter how well-known your company and your products are, reps don’t know how easy or hard it is to deal with you until they’ve made a few sales.
If you pay the rep a commission but she knows that dealing with you takes more time than dealing with other companies, she’s going to be less enthusiastic about selling your product.
Are you reliable? Do you do what you say? Do you support the rep?
If a rep requests a sample, how soon do you ship it? How hard is it to get a quote, a shipping date or an answer to a technical question? And how much time does it take?
What is the experience for the rep’s customer? Any time a customer changes to a new product, they’re likely to run into some kind of problem. Even if you’ve got a better product, change requires the customer to learn how you are different than what they’ve been using.
The rep will be monitoring the customer’s experience in dealing with your company and your products. The better the customer’s experience, the more the rep is going to sell for you.
Getting More Than Your Fair Share
Independent sales reps are independent businesses. They work for themselves – they’re not your employees. They decide the best way to spend their time to maximize their earnings. They decide who they’re going to call on and which products they’re going to present on a daily basis.
You are in competition for the rep’s time and attention with the other companies they represent.
If they agree to rep your product, most reps are going to give it a good effort. But if your product is new, different or costs more and isn’t very well known, they’re going to have their work cut out for them.
In the beginning, they’ll present your product to every one of their customers they think might be interested. This is how they size up your product. They’ll gauge the level of interest and the kinds of questions they’re getting.
How hard will it be to sell your product? Who is most likely to buy it? What about your product interests the customer? How much time and effort will it take to make a sale? What will be the value of that sale? Will it lead to repeat orders?
They’ve already asked themselves those questions before they agreed to represent you. But this first round determines what they think of you and how much effort they’ll put into selling your product.
If they don’t get much interest in your product, they will shift their focus to products where they see a better opportunity. Sure, they could probably get some more sales if they put more effort into selling your product, but they don’t work for a company so they don’t get a paycheck for effort. They only get paid for results. To make sure they get a decent income, they have to balance how much time they devote to each of the companies they represent.
This makes the onboarding process one of the most important steps to working with an independent rep.
Many companies do a poor job of onboarding new reps. It’s sometimes as bad as “We signed the financial agreement, here are some brochures, some samples, and a price list. You’re a salesperson, so start selling.”
The next step up is giving the new rep a plant tour, product training and getting him or her to meet the people.
What’s usually missing is telling the rep what type of customer will most likely be interested in your product and why. Sharing success stories of how your product was successfully sold by other reps sets them up to sell more effectively. Better yet, let them interview a few customers about why they changed to your product.
You should also introduce them to your other reps (the independent rep world is small, so most of them probably already know each other). Encourage your most successful reps to share the sales approaches that work best for them.
When the rep first takes on your product, check in frequently with her. Do a debrief on her sales calls. Who did she call on? What was the response? Are there any suggestions you can offer?
If you are working with a larger rep firm with a number of reps, you need to take the time to onboard each new rep they hire.
Eight Steps to Success with Independent Reps
1. Find the Right Amount of Communication
Some companies meet with their reps once a year to give them new literature, samples, pricing and policy changes with no further real communications. Other companies are hounding reps to make joint sales calls, which aren’t always welcomed or needed.
You have to strike the right balance. If schedules permit, I have found that regularly scheduled conference calls with all of the reps supported by weekly emails are very effective.
Keep them informed about your sales and marketing plans as if they were an employee. What trade shows will you be at? When will the new website go live?
2. Set the Right Tone
Some companies use these calls and emails to complain about the rep’s performance. But if your communications are more negative than positive, the reps won’t open your emails or have time for your calls.
The reps should see value in these calls and emails. They should be about sharing successes and learning from each other to help them sell more of your products.
3. Don’t Waste Their Time
Don’t send them leads you haven’t prequalified. They don’t have time to sort through every lead you receive.
Don’t ask for meaningless reports. Respect their time.
4. Give Them More Reasons to Talk About Your Product
Reps cannot present every product to every customer on every sales call. They’re usually going in with a single product. Depending on how the call goes, they may have time to briefly slip in one or two other products.
Make that other product yours. Every month or two, send the rep a single sheet of paper that describes something unique about your product. A case history telling an impressive story about why your product was chosen or a new sample can also work well.
You can even have a little fun with a game or contest. The idea is to keep giving your reps more and different reasons to mention your product over the other ones they represent.
If you have reps who are active on social media, give them content about your products to share. I know a rep who has 3200 architectural connections on LinkedIn. He asks the companies he represents to send him content. Most of them don’t, so he has to copy their posts himself to share with his connections.
A rep sent me this suggestion, “Don’t ever stop selling to your salespeople (reps or employees). If you aren’t excited enough to sell internally, we all will struggle to sell externally.”
5. Work Out a Shared Commission Agreement
An architect in Kansas City can be designing a building in Los Angeles. A designer at Starbucks can choose a product that will be in many cities. A general contractor can be working on a project in another state.
All of these are potential sales opportunities for you. If I am your rep in Seattle, how are you going to compensate me for calling on Starbucks when most of the products will be ordered outside of my territory? How will you compensate the local rep for sales that happened because of the efforts of another rep?
6. Earn and Keep Their Trust
Reps talk to each other. If you give a rep a reason not to trust you, every other rep will know to be careful in dealing with you.
The rest of your team doesn’t enjoy being paid late, have the same urgency with monthly commission reports and payments to independent reps.
A suggestion from a successful manufacturer, “Don’t miss opportunities to do the little things, that say they are part of the team. If a rep drives you to 3-4 accounts and you drive 100+ miles during the day, top off the tank of gas on the company card, the forty dollars of gas is much less then renting a car and filling it yourself.”
And a suggestion from a rep about trust. “The ability to fail successfully and openly is critical. Reps need to know that they can go to the manufacturer with their losses to learn how to be better. And manufacturers should be proud of reps that are 1) failing sometimes because they know they are trying hard and 2) willing to share this failure with the manufacturer.
7. Ask Them How You Can Do Better
Ask your reps what you can do to help them sell more of your products.
Are they losing sales because of how long it takes them to get price or the answer to a question? Do they need better or different sales and marketing materials? Are customers asking for a size, color or feature you don’t have?
One of the companies I know of who is very successful independent reps offered this suggestion.
“We find that having an Independent reps council once or twice a year or as a breakout at a national sales meeting is beneficial…not for every rep but just the agency owners. Engage that team on what they are hearing, what’s working and what’s not, missing product offerings and solutions that are being sought in the market.”
8. Use Their Knowledge
Involve the reps in your new product planning (within the bounds of confidentiality).
Reps are often surprised when new products are announced. This does two things. It reinforces to the rep that they are an outsider instead of a valued partner. It also prevents you from learning from the rep’s knowledge. If you share your ideas with them, they can point out a small issue that you had not considered but that could help your new product sell faster.
Ask them which of the companies they work with are the best and why? What changes could you make to help your reps be more successful?
How to Find the Right Rep
Good reps are hard to find. Here are some ways to find them:
- Ask another rep if they know anyone who reps your type of products in the territory you want to cover.
- Ask your customers if they know of a good rep who may be looking to add another line.
- Find related but non-competitive companies who use independent reps and find out who their reps are. They’re sometimes listed on their website and if not they will usually tell you if you call or email.
Get to know the rep firm. While there are many similarities there are also many differences. The best rep firms I know, have a plan that they follow. They are not running around trying to sell everyone. Make sure you understand their plan and that it will work for you.
I know a very successful architectural rep in NYC. He calls on 100 architectural firms and doesn’t go looking for new ones. He delivers a lot of sales for the companies he represents. He takes care of them and they specify his products.
If you are looking for someone who chases opportunities instead of building deep relationships, then this rep wouldn’t be right for you.
What other products do they represent? How important will you be to them? Would it be natural to sell your product to the same customer?
Do they have experience with your type of situation? With totally new products? With more expensive ones? Switching from the most popular product?
Who do they spend most of their time calling on? If you want to sell builders but the rep spends most of their time with two-step distributors and not lumber dealers or builders, they may not be right for you.
Good reps invest in themselves and their business by being involved in the professional associations of their customers, like the AIA, or the NAHB.
Be very clear about your expectations. Do you expect them to provide with their contact lists or provide you with call reports, don’t be surprised if they say no.
If you only plan to use them for a few years and then transition to your own sales team, be upfront with them.
You may also want to consider paying a higher commission on products that are newer or harder to sell.
You should also discuss your expectations of the sales volume in a territory and at what point you expect them to add another rep.
If you’re dealing with an older individual rep, what are his future plans? How long does he plan to keep working? Is there a succession plan?
One of the challenges of working with independent reps is that it’s almost impossible to find the right rep for you in every area of the country. In some areas, there may not be anyone to represent your product. Or the one you really want already works with a competitor and is happy with them.
Get the Most from Your Independent Reps
Working with independent reps can be very beneficial for building material companies, but you have to go into it with the right attitude. You need to be willing to establish a good relationship with your rep and you need to understand the value they bring you instead of expecting them to work for next to nothing.
If you follow the best practices I’ve outlined here, you should be able to find the right rep for your company and get them to present your product to more customers for more sales.
Alison Raes, ILA Marketing Group, Inc
Mark Eliasson, MDE Sales LLC
Blair Davies, Façade Systems, Inc
And Several Others