The New ERA of Rep Partnerships

By:?Dan Beaulieu?

For years one of the most difficult relationships in business has been the one between an independent sales representative and the principal, the company she is selling for.

This relationship has been tenuous at best and adversarial at worst. In fact, most of the time it has been adversarial. The principal’s constantly resenting the money they were paying to their reps and the reps expecting to be let go if they made too much money. Reps were often punished for being too successful with contracts written with descending commission scales as the rep booked more business.

Companies sought out reps because they were cheap…cheap that is, until they weren’t. Compared to a direct salesperson and all of the expenses that relationship incurs, reps seemed to be 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 multi year contract and collected full commission. It wouldn’t be long before the principal wondered what exactly the rep “had done for me lately to collect all of this money.” He could not or would not remember all of 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, like ours where we reached a point where literally every rep who had ever represented a PCB shop had a horror story of how he had been shafted by that board shop! And as a consequence, 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 and onshoring and political factors, their customers are looking for more domestic options for their PCBs. Their customers are looking to buy American again and so the 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 keys as to why this new “Partnership” is working.

Regular meetings with consistent agendas:?The principals and the reps are working together. They are having regular meetings once or twice a month. The purpose of these meetings is to share information. The companies talk honestly about how things are going. They 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 marketing. In many cases they are offering their reps help with the reps marketing and lead generation efforts.

Developing Ideal customer profiles: The two partners are working together to develop ideal customer profiles to determine exactly 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 then would complain that their reps were bringing in all the wrong stuff! The mere fact that the partners are working together to not only establish the kind of companies they are targeting but the market segment as well has proven to be perhaps the single more effective and productive aspect of the rep-principal partnership.

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 wins the other has to lose. Nope, now both parties realize that they need one another and that if they work together towards one common goal, they both will win.

Is incredibly refreshing to see what has for so long been an adversarial relationship turning into a solid and productive partnership. And 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 having fun doing it.

How about your company? Have you taken this new cooperative approach? Have you developed a new and productive partnership with your reps? If not, why not? It’s the only way to go and the time 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 [email protected]

What do you think? How do you handle your rep-principal partnership?