Hardi Promotions 2 October 24, 2010 : Page 2

Here’s how to teach representatives a thing or two By MikeMarks If the local factory or sup-plier representative is more effective in the job, the distrib-utorwill sellmore of the repre-sentative’s product. Effectively managing the relationship is the quickest way to improving distributor productivity. The keys to understand-ing and improving effec-tiveness are: Ɣ Understanding the distribu-tion business Ɣ Recognizing that distrib-utors and manufacturers often work at legitimate cross purposes Ɣ Being sensitive to those irritating “MBAs” that can make or break a relationship I was speaking to a col-league the other day about our research in the book, Work-ing at Cross-Purposes and he remarked, “This book should be part of every factory or supplier gram.” When I asked why, he talked about the lack of understanding of how dis-tribution works: “Reps don’t understand what goes into the day-to-day running of a dis-tributorship.” Our study indicated that rep’s training pro-the rep was a critical cog in the ongoing supplier-distributor relationship. The truth is how the supplier rep or the supplier representa-tive’s employer views the distributor’ role in managing the channel sets the tone for Mike Marks FLEXIBLE DUCT Commercial Solutions AMF07 Acoustic (7’ length) acoustic flexible duct is constructed with a sound transparent, spun-bonded, non-woven inner-core. A universal male/ female collar is factory attached to each end. R4.2, R6 and R8 Fiberglass insulation encompasses the core and a metalized, reinforced vapor barrier surrounds the entire duct. Dia. 4”-20”. MF07 Silver Jacket (7’ length) flexible duct is constructed with a spring steel wire helix, encapsulated in a 2-ply, air-tight inner-core. A universal male/female collar is factory attached to each end. R4.2, R6 and R8 Fiberglass insulation encompasses the core and a metalized, reinforced vapor barrier surrounds the entire duct. Dia. 4”-20”. AMR25 Acoustic (25’ length) flexible duct constructed with a spring steel wire helix and a unique sound transparent, spun-bonded, non-woven inner core. R4.2, R6 and R8 Fiberglass insulation encompasses the core and a metalized, reinforced vapor barrier surrounds the entire duct. Dia. 4”-20”. AMB25 Anti-Microbial AMBlue (25’ length) flexible duct is constructed with a unique inner-core with galvanized wire and blue nylon film with antimicrobial properties integrated into the co-extrusion process. R4.2, R6 and R8 Fiberglass insulation encompasses the inner-core and a metalized reinforced vapor barrier surrounds the entire duct. Dia. 4”-20”. FHP25 High Pressure (25’ length) flexible duct is constructed with a spring steel wire helix, encapsulated in a polyester, aluminum foil and polyester tri-laminate air tight inner core. R4.2, R6 and R8 Fiberglass insulation encompasses the core and a metalized, reinforced vapor barrier surrounds the entire duct. Dia. 4”-20”. Contact your local JPL distributor or visit our web site at www.jplflex.com to learn more about these products that can be solutions to your commercial needs. the entire relationship. If the rep sees the distributor as an extension of the supplier’s sales force, he or she is not likely to spend much time learning about the distribu-tor’s business. Conversely, if the rep sees the distribu-tor as a legitimate channel partner, he or she is likely to learn about what makes the channel partner successful; understanding that, if the distributor is successful, the supplier has a better chance of being successful. Effective relationships As you might expect, many of our research subjects thought it would be nice if the rep were better prepared to manage effectively. Unfortunately, the executives we interviewed felt that most of the reps weren’t all that well prepared. In this article, I will talk about the importance of understanding distribution as a business and focus on means to successfully man-aging the relationship. If the local rep understands these keys, he or she will be more effective in their jobs. If the local rep is more effective in the job, the distributor will sell more of the reps product. Effectively managing the relationship is the quickest way to improving distribu-tor productivity. The key to understanding and improv-ing effectiveness is: Ɣ Understand the distribu-SEE US AT BOOTH #326 2 HARDI Convention Daily Continued on pg. 6 the relationship

Here's How To Teach Representatives A Thing Or Two

Mike Marks

If the local factory or supplier representative is more effective in the job, the distributor will sell more of the representative’s product. Effectively managing the relationship is the quickest way to improving distributor productivity.<br /> <br /> The keys to understanding and improving effectiveness are:<br /> <br /> . Understanding the distribution business <br /> <br /> . Recognizing that distributors and manufacturers often work at legitimate cross purposes <br /> <br /> . Being sensitive to those irritating “MBAs” that can make or break a relationship I was speaking to a colleague the other day about our research in the book, Working at Cross-Purposes and he remarked, “This book should be part of every factory or supplier rep’s training program.”<br /> <br /> When I asked why, he talked about the lack of understanding of how distribution works: “Reps don’t understand what goes into the day-to-day running of a distributorship.”<br /> <br /> Our study indicated that the rep was a critical cog in the ongoing supplier distributor relationship. The truth is how the supplier rep or the supplier representative’s employer views the distributor’ role in managing the channel sets the tone for The entire relationship. If the rep sees the distributor as an extension of the supplier’s sales force, he or she is not likely to spend much time learning about the distributor’s business. Conversely, if the rep sees the distributor as a legitimate channel partner, he or she is likely to learn about what makes the channel partner successful; understanding that, if the distributor is successful, the supplier has a better chance of being successful.<br /> <br /> <b>Effective relationships</b><br /> <br /> As you might expect, many of our research subjects thought it would be nice if the rep were better prepared to manage the relationship effectively. Unfortunately, the executives we interviewed felt that most of the reps weren’t all that well prepared.<br /> <br /> In this article, I will talk about the importance of understanding distribution as a business and focus on means to successfully managing the relationship. If the local rep understands these keys, he or she will be more effective in their jobs. If the local rep is more effective in the job, the distributor will sell more of the reps product.<br /> <br /> Effectively managing the relationship is the quickest way to improving distributor productivity. The key to understanding and improving effectiveness is:<br /> <br /> . Understand the distribuTion business — of the . Vementioned, it is the key, all the others . Ow from it.<br /> <br /> Understanding the distributors business will help the rep create a relationship that can overcome cross purposes and MbAs (“minor but aggravating” issues that come up in any business relationship) that are typically associated with the supplier/ distributor relationship.With that knowledge, the supplier representative will be able to:<br /> <br /> . Help the distributor be more successful across his or her business<br /> <br /> . Manage the fact that often times the reps priorities and the distributor executive’s priorities are at cross-purposes<br /> <br /> . Understand how irritating MBA requests are, and learn how to minimize their impact <br /> <br /> . Become more respectful of the distributor’s workload and time commitments<br /> <br /> <b>Understanding</b><br /> <br /> Our research provided many powerful examples of how effective or ineffective manufactures reps were in the management of the relationship. Unfortunately, if one were to put together a spreadsheet with one column headed “Effective” and the other “Ineffective,” the column on the right would extend beyond the column on the left. There were many more examples of ineffective behavior by supplier reps.This ineffective behavior had a tremendous negative impact on the relationship.<br /> <br /> More often than not, this ineffective behavior stems from a lack of training and knowledge. Supplier representatives, for the most part, do not understand distribution.<br /> <br /> They are taught about their company’s business, sent out into the field to make “calls” on distributors without relationship management skills. They see the CEO or owner of the distributor driving a nice car, belonging to a country club and sitting in the corner office and think of only one thing: This executive is making too much money and it’s our money.<br /> <br /> Instead of seeking to understand the role of distribution in the channel, individual reps are more likely to impose guidelines and rules that make sense in the world of manufacturing. These rules or guidelines hold little validity in the world of distribution.<br /> <br /> The reps either don’t understand (or forget) that distributors are intermediaries that perform a cost-transfer role.They don’t understand that distributors wouldn’t exist if manufactures could perform the same role at a lower price.They don’t understand that distributors serve many masters, from other suppliers to a massive amount of customers of all shapes and sizes.<br /> <br /> In our book, . Rst two chapters review how distribution works, how it adds value, and how it has changed over the years. There is no such thing as “too much knowledge” when it comes to training a manufacturer’s representative regarding distribution. Here are a few functions that distributors perform that every supplier rep should understand:<br /> <br /> . Distributors serve as market makers by acting as selling agents for suppliers and buying agents for customers in geographically de. Ned markets.<br /> <br /> . Distributors . Ll a cost transfer role through various elements of physically distributing products.<br /> <br /> . Distributors can add value through product customization because they physically possess the products.<br /> <br /> . Distributors act as banks, playing a large role in . Nancing the growing economy.<br /> <br /> . Distributors provide post sale service and support.<br /> <br /> . Distributors full a very valuable information transfer function.<br /> <br /> <b>Helping</b><br /> <br /> Once the supplier rep has a better understanding of the distribution business, he or she can begin to understand that the more successful the distributor is across product lines, the more successful the distributor will be managing the rep’s particular line.<br /> <br /> There aren’t many distributors that can be successful selling one supplier’s line. If they were, the supplier would have a just cause for “going direct.” Any help the rep can give the distributor will be paid back in more ways than a rep could ever imagine. Reps often have key inside information about products that the distributor could offer that would add to their success without actually diluting the supplier’s sales. If a supplier rep is perceptive, he or she will know that introducing these products to the distributor will only enhance the relationship. Realizing that distributors need a wide variety of products to sell to their customers will help a rep solidify his reputation as a business partner.<br /> <br /> <b>Legitimate cross purposes</b><br /> <br /> As our research showed, business partners often operate in a world of cross purposes.Remembering that your priorities and those of your distributor are often at cross purposes and publicly acknowledging this fact will help the rep strengthen the relationship. Even though these are legitimate, they can be a source of irritation.The more the rep understands the distributor’s business, how a distributor makes money, the more these cross purposes can serve as a springboard to a stronger relationship.For example, a point of gross-margin is often meaningless to a manufacturer, but The difference between a profitable line and a money losing line to a distributor. Asking for “manufacturer-like” discounts or rebates doesn’t make sense in the world of distribution.<br /> <br /> In spite of that, many of our research participants indicated that they are often asked to “participate” in programs that make no economic sense. When supplier reps make unreasonable requests that expose ignorance in how cross-purposes work (or in this case, how the distributor makes money), there is a dampened ability to in. Uence the distributor, and the relationship suffers. Understanding cross-purposes presupposes understanding the true economics of distribution.This should be included in the manufacturer reps training under “Distributor Management101. ”<br /> <br /> <b>Keeping the ‘MBAs’ at bay</b><br /> <br /> In our research, minorbut- aggravating requests often became very serious sources of aggravation for both suppliers and distributors.So, don’t overload the distributor with MBAs.MBAs are those minor, and usually aggravating, requests from the supplier that eat up a distributor’s limited resources and time; without providing a . Nancial return. Examples of these are territory audits and reports that, as everyone knows, never see the light of day. Other examples include requests to take in products for resale that have no redeeming market value.The customers don’t want the products, the consumers or end users don’t want the products and they either are sold at a signi. Cant cost (below cost or with a large sales incentive), or simply take up space in the warehouse.<br /> <br /> Lastly, realize that you aren’t the only arrow in the quiver — the only master of the universe. Distributors serve many masters, from suppliers to customers. If you want a dedicated sales force, go hire one — otherwise realize you are only as important as your bottom line contribution.If your goal is to get more attention from the distributor, add more value and pro. T to the bottom line while removing many of the aggravations.<br /> <br /> In summary, the supplier reps are so important to the quality of the relationship between the supplier and the distributor that they can make or break it. The more the supplier rep knows about the distributor’s business, the more effective he or she can be in guiding the relationship in ways that bene. T the supplier or manufacturer. To put it simply, manage the distributor as you would a customer and you will have a business partner for life.<br /> <br /> Mike Marks co-founded the Indian River Consulting Group in April 1987. Marks began his consulting practice after working in distribution management for more than 20 years. He has written extensively and is frequently quoted on many industry issues. He will speak at 11:30a. m. Monday on creating value for distributors.<br /> <br />

JP Lamborn Company

 

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