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The triangle of opportunity

By Dave Wright -- Industrial Distribution, 8/1/2002

The toughest task facing todays' manufacturer's representatives is finding what works best to help distributors sell more products at better margins. The factories we represent share the same goal.

We are facing new challenges and expectations today. In the past, fair prices, consistent delivery, and innovative training were what was expected. Things have changed and we all are trying to come to grips with the new paradigm facing us.

Today, manufacturers are doing everything possible to lower overhead and get the most bang for each buck spent. Evaluating the use of Direct vs. Independent manufacturers' reps has been a part of this process. Many factories have changed from direct to independent while others have gone the other way. Regardless, today's manufacturers have higher expectations from their current sales force.

Tasks like marketing surveys, new product launch research and calling on end users are all expected by many of today's manufacturers. Basic chores like collections and shipping samples and literature are now being pushed to the local level. This additional workload has caused progressive agencies to re-invest in higher quality people and advanced computer systems to handle these tasks. With the increased responsibilities have come increased costs. It is safe to say few manufacturers have raised commissions to compensate for the reps' added responsibility. That will have to change. It makes sense for manufacturers to look at activity-based commission programs, instead of the current straight sales commission.

Distribution also has higher expectations from today's manufacturers and reps. Distribution expects the manufacturer to eliminate barriers to sales such as code approvals and product specifications. The responsibility for developing brand demand falls on all members of the "triangle". When users request products by name, the system works smoothly. Distribution today typically carries a much more diverse product offering than even five years ago. Reps must provide training for inside as well as outside sales people to ensure confidence to sell this larger product offering.

One of the most positive and effective methods to grow sales is joint distributor and rep preplanned end user calls. Assuming the rep is knowledgeable and the distributor sales person is not on a delivery run, these are wonderful sales opportunities. A little preplanning can ensure a successful outing.

We have had the best success in planning half days, which frees up the afternoon for the distributor to complete his duties. After the calls, assigning who will follow up on what task will be the determining factor for turning opportunity into orders. Follow up is critical to completing the process. Using e-mail to track the success is an easy and effective way to include distribution management in the loop. This also increases the level of accountability on all involved and it shows management what has been done to increase sales and profits.

In spite of all the changes, the goals remain the same. We all need to work together and adapt to our new environment to ensure a successful future. Distributors, manufacturers and reps will have to continue to invest in their businesses to achieve efficiencies to remain profitable in the future. The reps' primary role in the triangle is still to maintain the quality relationships between the manufacturers and the distributors.


Author Information
Dave Wright is CEO of W.G. Wright, Portland, Ore. He can be reached at 503-232-3480 or davew@wgwright.com.

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