Estimated reading time: 4 minutes

It’s Only Common Sense: The Problem With Reps and Principals

What’s wrong with the reps? What’s wrong with the principals? How will we fix this problem between the two? This is part two of my continuing series on the issue between the two sides.

These questions I posed are ones I get on a quite regular basis from my PCB shop owners and leaders. Here are some things they tell me:

• Principals are not getting out of their reps what they used to; reps are not getting out there and talking to enough customers, especially new ones.
• Even the most successful reps are happy to collect commissions on their legacy accounts and not do much else.
• Reps won’t follow up on the leads the owners give them.
• They have a hard time getting their reps on the phone and they cannot have a team meeting with their reps anymore because they are “too busy.”
• When reps say they are “too busy,” what are they doing? They’re certainly not selling the products.
• The reps must be making money on something but it’s certainly not on products they’re selling for me.

And on it goes. The one thing that is common with all of these principals is a growing dissatisfaction with their reps. The gap in the relationship between reps and principals continues to spread.

Now, what are the reps telling me? The main thing I hear is that they cannot make money any more just selling boards. Actually, some admit to doing very well with offshore principals who are easier to deal with, can handle huge orders that bring in substantial commissions, and are nowhere near as demanding as their domestic principals that have small orders, paltry commissions, and a much higher tax on their time. Here are other comments I hear from reps:

• Reps are not treated as equal partners.
• Reps are not kept in the communications loop with their customers—the ones they brought to the table in the first place.
• Reps are the last to get paid and often (especially these days with chip and material shortages) don’t get paid for almost a year after they booked an order.
• Reps must handle their own cash flow until they get paid.
• It is harder than ever to get new customers since they still have a hard time even getting in to see current customers.
• The principals get angry at them when they must tell them about a customer who is unhappy with their service, or that the product is late or defective. The classic “shoot the messenger mode” always applies in these situations.

There you have it. This is the problem and, unless we figure out a way to handle this gap and create a win/win rep-principal relationship, this way of doing business will collapse quite soon. I would say it is already happening.

Okay, enough already; we get it, this sales scenario is not working anymore. You can tell a relationship is not working when both sides are equally unhappy—when both parties are doing nothing more than complaining about the other. This is getting us nowhere. Let’s start doing something about it.

I have been playing referee in this title bout for four decades now. I have watched it deteriorate into basically an impasse. I’d even put it in the words of the inimitable Strother Martin in that unforgettable Paul Newman movie, “Cool Hand Luke: “What we have here is a failure to communicate.”

Both parties must give a little to make it work. Each must walk in one another’s shoes to truly see the issue, be more empathetic, and come together to do something about it.

I have some ideas. There are definite steps we can take not only to alleviate this problem but go a long way to solving it. Over the next three weeks, I will closely study the points of division in the rep-principal relationship and discuss some sound ways to overcome this adversarial relationship.

I believe we can solve this dilemma in a fair and equitable way that will make both sides fairly happy. We can find a way to make this partnership work so it becomes a productive partnership again.

Next week, I’ll discuss what the rep needs to make this relationship work and what the principal can do to give the rep most of what she needs. Then I’ll switch gears and see what the rep can do to make the relationship viable for the principal. Finally, I will outline what has been discussed and reveal the guidelines for a rep-principal relationship that will work for both parties.

I am reminded of the great senator from Maine, George Mitchell (Maine always has great senators), who coincidentally grew up down the street from me in Waterville. He went to Ireland years ago and mediated a successful peace treaty between two parties involved in “The Troubles.” Sometimes I think he had an easier job of it than I have trying to bring reps and their principals together in a good and productive and peaceful partnership.

It’s only common sense.

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