Five Deadly
Mistakes Commonly Made by Manufacturers
Premature Expansion
Expanding the field sales force (adding new reps) without the proper internal
infrastructure can be deadly. Not only are there not sales increases from the
increased feet-on-the-street but even worse: current customers may be ignored to the point
of decreased business. A red warning flag not to be ignored is constant complaining by the
existing field sales force about increasingly excessive turnaround times for quotes, order
processing, repairs and late deliveries.
Late Commission Payments
Most independent manufacturer's representatives work on a commission-only
basis, pay their own expenses and are always last in the food chain for being paid. The
rep will expend about 80% of the total required sales effort before the
order is won or lost. If it is lost, the rep gets zero. If it is won, the rep is the last
to be paid. Chronically late payment of commissions is the number one Negative Incentive
Plan.
Poor Rep Communications
Poor communications is always an obvious sore subject. However, it seems that
in many cases extremely poor communications can exist within companies which use
manufacturer's reps. Some internal people feel like the reps are not "company"
but rather an alien being to be, at best, tolerated. There are many instances where
communication between a customer and factory personnel, such as Engineering or Production,
is the most expedient manner of solving a real-time situation. Someone in the internal
sales department must close the loop and inform the rep.
Almost all rep contracts specify the
manufacturer's obligations for supplying customer related paper work such as: purchase
orders, shipping documents and invoices. Make it part of the monthly procedures to get all
the pertinent paperwork out to the field.
Out-of-Sight/Out-of-Mind
Reps generally represent multiple lines. It is
not possible to command MINDSHARE by remote control. The old saw "The squeaking wheel
gets the grease" is especially true for a manufacturer's rep sales channel. The
factory must be out in the field spending windshield time and making joint calls with the
rep.
Two corollaries here:
It is disastrous to make factory-only calls in the territory without notifying the rep.
It is discourteous and counter-productive to schedule a trip to the territory without
checking to see if the rep has any previous scheduled conflicts. Airline tickets are
expensive and should be booked in conjunction with the rep's availability.
Wrong Mission
Reps sell! They shouldn't be doing the factory's marketing, engineering design,
purchasing or employment search. If they are, the sales department is being short-changed
and will not be successful. If a rep is amenable to providing these functions, you need to
get another rep, one who is totally focused on a single minded goal: SALES.
