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It’s Only Common Sense: The New Era of Rep Partnerships

For years, one of the most difficult relationships in the business has been that between the independent sales representative and the principal—the company for which they sell. This relationship has been tenuous at best and adversarial at worst.

Unfortunately, most of the time, it has been adversarial. The principals constantly resent the money they paid to their reps, and the reps expect to be let go if they make too much money. Reps were often punished for being too successful, and contracts would be rewritten with descending commission scales as they booked more business.

Companies sought out reps because they were cheap—until they weren’t. Compared to a direct salesperson and all the expenses the relationship incurs, reps seemed like a great deal. No business, no money. It all sounded good to the business owners—until the rep brought in some business, and then the owners resented every check they wrote.

This was especially true when the rep landed a huge multiyear contract and collected full commission a long time after the short-memory principal wondered what exactly the rep “had done for me lately to collect all of this money.” They could not—or would not—remember all the outlay in time and money that the rep had spent to win that account.

And so, it went. Things got so bad in some industries, such as ours, that we reached a point where every rep who had ever represented a PCB shop had a horror story of how they had been shafted by the principals. Consequently, these reps wanted nothing to do with the bare board business.

But things have changed, and many reps are coming back to the board industry. One of the reasons for this is geopolitical. As more than one rep told me lately, “We made money selling boards over the years, but then China came along, and we could no longer compete.” Those reps have recognized that with COVID-19, onshoring, and political factors, their customers are looking for more domestic options for their PCBs. They are looking to buy American again, so many reps feel it is time to find a PCB shop to represent.

I have been fortunate to be right at the front lines of this phenomena, and I am happy to report that the rep-principal relationship of 2020 is much more of a partnership than ever. Here are three reasons why these new partnerships are working.

1. Regular Meetings With Consistent Agendas

Principals and reps are working together. They’re having regular meetings once or twice a month to share information. The companies talk honestly about how things are going and update their reps about new technologies they are working on, new equipment they have purchased, capabilities they have added, and new people they have hired. More importantly, they discuss all of the marketing they are doing and graciously invite the reps to share in that. In many cases, they are offering their reps help with their own marketing and lead-generation efforts.

2. Ideal Customer Profiles

The two partners are working together to develop ideal customer profiles to determine what kind of companies they should be targeting. This is saving everyone a lot of time and effort. Time and effort that had been wasted in the past when principals would not even take the time to describe to their reps what kind of business they wanted and would then complain that their reps were “bringing in all the wrong stuff.” The mere fact that the partners are working together not only to establish the kind of companies they are targeting but also the market segment has proven to be the most effective and productive aspect of the new rep-principal partnership.

3. Developing a Mutually Respectful Partnership

The real reason these new partnerships are working is that both the reps and the principals respect each other. No longer is this relationship viewed by both parties as a zero-sum game where if one party won, the other had to lose. Now, both parties realize that they need one another and that if they work together toward one common goal, they both win.

Conclusion

It's incredibly refreshing to see what has for so long been an adversarial relationship turning into a solid and productive partnership. The great thing about it is that both parties are already seeing the results of this new, cooperative approach. They are winning more business, and they are gaining new customers. The principals are growing their sales, and the reps are increasing their commissions, and they are both having fun doing it.

How about your company? Have you taken this new cooperative approach? Have you developed new and productive partnerships with your reps? If not, why? It’s the only way to go, and the timing is right. Try it. You’ll like it!

It’s only common sense.

By the way, for your free copy of my “Partnering With Your Reps Plan,” contact me at danbbeaulieu@aol.com.

Dan Beaulieu is president of D.B. Management Group.