When looking at who should sell for them, custom molders and moldmakers often ask the question, "Direct salesperson or sales rep?" Often, the decision is to hire a sales rep, but for the wrong reasons. Ray Faint, president of Diversified Resources Co. in Scottsdale, AZ, has been on both sides of the fence. For many years, he was a sales manager for The Tech Group, headquartered in Scottsdale. In 1986, Faint left to become an independent manufacturer's sales representative.
He says many times reps are viewed as a low cost, low risk way to get something started, rather than as a long term business partnership opportunity. One big mistake companies make when they hire reps, Faint says, is to assume the rep has a base of companies already in his pocket, just waiting. Not true.
"A rep may have a network of customers with good potential for a new principal, but you're asking a rep to do something that takes a long time, to develop the trust necessary for a company to begin doing business with a new supplier," Faint says.
"When deciding to hire a rep, molders and moldmakers need to ask themselves what they are hiring, a closer or a marketer?" This is important to understand because most sales reps are sales driven, and "if you ask them to develop a market, you may be asking them to do something they're not good at."
Reps need sales support. If you provide good, solid sales leads and sales support, you're more likely to get top shelf performance from them. Many molders believe, because they're hiring an independent person to do the selling for them, they don't have any responsibility in the matter. Wrong again, says Faint.
Developing the Relationship
Sales reps must be made to feel a part of the principal's company. Faint recommends reps spend at least a week at a principal's facility, learning everything possible about not only the capabilities but also the culture. Reps also need to be included in planning meetings to stay tuned in to the company's activities.
"You cannot sell, with confidence, what you don't know," Faint explains. "Without that inclusion, the rep will always be an outsider."
It is undefined expectations, Faint says, that cause a relationship between a rep and principal to falter and fail. "Many times, the expectations on the part of both parties are flawed going into the relationship. There's no realistic expectation about what each is trying to accomplish or what they're really capable of." The result is both parties often oversell each other going in.
Many molders and moldmakers, for example, expect a sales rep will bring in instant business without being given any direction. Faint says it's the principal's responsibility to provide a business plan or marketing strategy with specific goals and objectives or to develop one jointly with the rep. "I make it clear to my principals that I'm not here to solve their 30-day problems. I only address their long-term business development goals."
Large or Small?
When asked whether he would rather represent large companies or small, family-owned businesses (Faint has repped both), he replies: "Small companies offer high risk and high reward, and they also provide the best opportunity for a long-term relationship because the rep is personally connected at the top and can participate in the strategic planning of the company."
In large companies, boards usually make the decisions to change the direction of the company for a variety of reasons, which may mean they discard reps and replace them with direct sales people. A rep is less connected to the powers that be and the decisions they make.
"However," Faint adds, "there's a huge advantage in exposure, instant credibility, and instant cash flow with an existing customer base when repping a large company."
Large companies view sales as a standard cost, just like engineering or manufacturing costs, whether the expense comes from direct or indirect sales people. On the other hand, many times, "small company owners believe sales expenses come directly from their pocket and go straight into the rep's pocket," says Faint. "They fail to realize the rep company is a business also and subject to many of the same expenses they face."
He adds you should pay your reps fairly and on time. Some may say money is never a motivator, but Faint is quick to point out that "it is an incredible de-motivator when it is missing."
Diversified Resources Co.
Phone: (602) 948-2094
Fax: (602) 948-2095