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It’s Only Common Sense: Sales Reps, Part Four—The Productive Partnership

For the past three weeks, we have been discussing the relationship between sales reps and how this equation needs to be changed and improved. We listed what the reps want from this relationship and what the principals want from the relationship. By comparing these two lists we can see some wide gaps in expectations. This leads me back to my original statement: this relationship is no longer working.

In a recent conversation with a friend, he pointed out that the large OEMs, like component manufacturers, are no longer using reps. This led him to the premise that the rep is on the way out as a viable method of selling.

After some discussion we both concluded that, because of several factors—including social media, search engine optimization and Google ads—these companies are so well-known and in tune with their customers that my friend’s premise with these OEMs might very well be true. But the real reason sales reps aren’t needed is because these companies design and produce their own patented products. That is a key point.

In PCB manufacturing and assembly, we do not have our own product. We are building other people’s products; we are a B2B (business to business) industry helping companies like these well-known OEMs produce their products. Ours is a consultative sale requiring person-to-person interface, which means we still require direct or independent sales representatives. Since we still need reps, we need to improve the rep-principal partnerships.

With that in mind, here is what must happen for the rep-principal partnership to work better in the future.

1. Partnership: Both parties at this table must make an intentional effort to make the partnership work. This has to go far beyond a “we’ll just get along better” promise. Nope. There has to be a mutually developed and implemented plan for a productive partnership. The reps and the principal need an open and honest discussion on how they are going to work together to create this fruitful partnership. Both parties must participate fully in this effort.
2. Respect: While developing their project, the parties must agree to respect one another and, as in a true partnership, look out for one another.
3. Balance: Let’s get rid of the old Golden Rule: He who has the gold makes the rules. This is one of the dumbest things ever assumed in any relationship. That kind of thinking has led us to where we are today, with the rep-principal relationship in shambles. Both parties must come to the table as equal partners. This is especially true for the way the principal views the rep.
4. Open communication: This must be understood from the beginning. Both parties must be open and honest with one another at all times. The principal must include the rep in all discussions and decisions about their mutual customers.
5. A contract based on success, not failure: Contracts today are written with a fear of failure, not with an eye on success. If a contract for the rep has a 30-day termination clause, why have a contract in the first place? This means that the principal does not believe in the partnership enough to extend the termination clause to something that makes more sense—like six months to a year. Look, if you don’t trust the rep enough to commit to this, then you don’t know the rep well enough, and you shouldn’t sign her until you do.
6. A serious attitude: Too many reps are eager to sign contracts, but not so eager to do the work. I have seen many examples where reps sign a contract and then never do another thing (or so it seems). A contract is a commitment that must be taken seriously. If you sign up to represent a company, then do it. Represent them. Prospect, cold call, follow up, negotiate, get the quote, get orders, and develop an ongoing relationship with this customer. Once you have a new customer, go after another one. Being in sales means doing all these things; this is what you literally signed up for, so just do it.
7. Retainer/stipend: Whatever you want to call it, it is time for a rep contract to include a retainer. No longer can reps work for almost three quarters of a year before seeing one red cent. I don’t make this recommendation lightly at all. It has taken years for me to come to this conclusion, but I think the time has come. However, everything I have listed above has to be in place, especially number six. Reps need to realize that when they get a retainer, they are committing to doing their job, to doing everything they agreed to do and more. You cannot just get a retainer and assume it’s business as usual. That retainer binds the rep to be all-in for that principal; this means being seriously accountable to that principal. It also means participating in a good and solid rep partnership program that includes reporting, sales meetings, forecasting, and prospecting (prospecting and cold calling on new target customers is part of your responsibilities).

If the rep and the principal not only agree but are ready to fully commit to the seven guidelines and use them as the foundation of their relationship, then it will turn into a successful and productive partnership.

It’s only common sense.

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