Proper Identification and Motivation of Manufacturers' Agents
Many companies decide to expand their sales efforts by utilizing
manufacturers' agents. The major reason is the misconception
that manufacturers' agents do not cost the company anything
unless they close an order. Identifying, training and motivating
agents can be a very time consuming and expensive exercise. That
is not to say, that the use of agents is not the best method to
increase sales for many companies, it is just not a "no" cost
solution. Creating a sales force comprised of manufacturers'
agents requires patience and a great deal of effort. The
manufacturers' agent company only earns revenue if they
successfully sell the products or services of the businesses
that they represent. Their field sales people then share a
portion of that commission. Human nature then prevails, they
will actively promote the products and services that are the
easiest for them to sell and hence provides them with the best
possible income.
It goes without saying that if there were sufficient business in
the agents' territory for your products or services to support a
sales office then you would have put a factory sales person into
that area. When choosing a manufacturers' agent it is important
to ensure that, the customers that they are currently selling to
are the customers who potentially will buy your product. The
agent wants and needs to sell multiple product lines to the same
customer on any individual visit, in order to maximize his
income and cover the cost of the sales call.
It is up to you to educate the manufactures agent's field sales
force and to have a factory sales representative accompany them
on sales calls within their assigned territory, on an ongoing
basis. You must show the agent(s) how easy it is to close an
order for your products or services. Nothing will motivate an
agent more than receiving a commission check for selling your
wares. In the same manner that you wouldn't put a sales person
into the field in your home market without being properly
educated on the product you can't expect the manufacturers'
agent to have any less of an education requirement. In fact, it
requires more effort because the agent has many principals who
are all vying for his time and attention.
One of the common mistakes in dealing with a manufacturers'
agent company is that you sell and train one senior individual
within that organization on your products and then expect them
to disseminate this information to their field sales force. What
you end up with is the blind leading the blind. I can't emphasis
enough that the training and support must be given directly to
the agent's field sales people. If you are about to contract
with a manufacturers agent and they will not give you direct
access to their field sales people for training and sales
support, then go no further - find another organization to sell
your products or services.
It is also important that any promotions that you implement,
such as increased commissions for a period of time, to motivate
that sales force end up in the hands of the people who are
actually in the field selling, not in the company coffers.
As a final note, no matter how much due diligence you do on
selecting manufactures agents before contracting with them, a
percentage will just not work out. Do not hang on to agents that
are not performing, terminate them and find someone else. Make
sure that your representation contract allows you to terminate
easily and efficiently.
If your company has a problem choosing and motivating agents or
distributors contact Robert Berman at Robert.Berman@sbhc.ca