The distributor’s most important asset
Material handling distributor sales reps have a tough job. If you don’t believe me, just ask them. They are always managing a large number of material handling products from a wide variety of manufacturers and suppliers. The products that their customers want are not always the products that the company or the manufacturer wants them to sell. They are always being pressed by their customers to reduce the cost of the product.
|The distributor sales manager must understand the manufacturer’s business. This is the key to building credibility.|
In today’s environment, the reverse auction has become an accepted business practice, so sales skills and relationships don’t mean as much. All the while, customers and manufacturers alike complain that, in their opinions, today’s distributor sales rep is under-trained and over-compensated.
Like it or not, distributor sales reps are the key to success for both the distributor and the manufacturer. In spite of the hard job and the complaints, the truth is that part of the reason for the frustration is that they are not very well-managed by either the distributor or the manufacturer. But the sales reps need help. For that reason, the distributor sales manager is the difference maker as to whether the sales rep is an asset or a liability to both his own company and the manufacturers he represents.
In our book Working at Cross-Purposes, our research indicated that supplier reps were the key to a successful relationship between the manufacturer and the distributor. Since publication, we have learned that the distributor rep also plays a key role. In many companies, the distributor rep is ill-equipped for this critical role. Our research indicated that many distributor sales reps don’t really see the big picture. Their job is much more comparable to a hunter carrying a rifle than a hunter carrying a shotgun. They have customers (targets) and products (bullets). Their job is to be laser-like in their approach. They have to find the right bullet (product) for their different types of targets (customers).
|Distributor sales reps will naturally gravitate to more highly incentivized products. Distributor sales managers must not allow incentives to become a substitute for management and strategy.|
To be successful, the distributor sales rep needs two things: great product training and great management. To a large degree, both of these things are controlled by the distributor sales manager. The distributor sales manager and the manufacturer rep can make sure that good training and good management are available. The training can come from both the sales manager and the supplier, but it is the sales manager that controls the flow. Management comes from the distributor sales manager or self-management.
In the case of product training, it is important to see that the key link between the distributor sales rep and the manufacturer rep is the distributor sales manager. Manufacturer reps are a great source of information about products, market trends and customers. They often have more information than they know. Unfortunately, these manufacturer reps don’t have time to work with every sales rep in every distribution company they call on. The good ones know that they have to be able to effectively leverage their knowledge and expertise. Because they do have time to call on every distributor sales manager, they have to know how to use this relationship to provide training to their key links to the market. Unfortunately, the manufacturer rep is often poorly equipped to pass along the needed information, and this is another reason why the distributor sales manager is such an important link in the process.
There are several ways that the distributor sales manager can accomplish this goal. Before the sales manager can effectively provide the link between the sales rep and the manufacturer, the sales manager must understand the manufacturer’s business. This is the key to building credibility. If the sales manager of the distributor is credible, the manufacturer will bend over backward to help the company be successful. Manufacturers make money differently than distributors do. Because they do, what often seems like conflict is really only a legitimate cross-purpose. Manufacturers need distributors who are willing to sell all of their products because they need to keep their factories working at full capacity. Manufacturers need market execution, because, while they may be effective at developing marketing plans, they lack the manpower and time to effectively execute the plans.
Distributor Sales Managers
Distributor sales managers must understand the needs of the manufacturers and do their best to try and meet those needs. The sales manager that is seen as a cooperative trading partner will get the spoils of all the training material available. In addition, the sales manager in the distribution company must be able to manage the relationship by demonstrating that he or she is knowledgeable about the manufacturer’s products and technology. There are a lot of hidden resources that the manufacturer rep either forgets to pass along or doesn’t even know exist. Manufacturers spend a lot of time and money developing product information packets. Many times this important information ends up in the dumpster when the next round of information comes out. Effective distributor sales managers know how to get all the tools available to their sales reps.
The distribution sales manager must be able to sift through the tons of training material hoisted on the sales reps and find what is meaningful and productive. Sometimes manufacturers, bless their good intentions, have a tendency to “throw all the marketing material at the wall and see what sticks.” It is the sales manager’s job to find the right tools and get them to the sales reps. It is the job of the sales manager to help the sales reps perform better today than the best they could perform yesterday.
The manufacturer rep has a role in this too. Like the distributor sales manager whom they are calling on, manufacturer reps need to know how their customers make money. If they spent time making sure they understood the distributor’s customers and how they made money, the plethora of marketing materials that fill sales rooms could be more focused and more useful.
|The sales manager who is seen as a cooperative trading partner will get the spoils of all the training material available.|
After great product training, the distributor sales rep needs great management. In The Five Fundamentals for the Wholesale Distribution Sales Manager, we define distributor sales management a little differently than most management books. We define sales management as “doing all you can to assure that your sales team can perform their jobs better tomorrow than the best they can do today.”
This means more than providing product knowledge. In fact, the typical sales rep receives plenty of training about his or her product and service offering. This training is not always effective or consistent, but as I discussed above, it is the role of the sales manager of the distribution company to “make it so.”
Incentives Play a Role
The role of the sales manager in a distribution company is to provide tools and processes designed to help the sales rep become more successful. Sometimes this means protecting the rep from all the crap that goes on between the vendor and the distributor. Sales reps are recipients of all that runs downhill. Is it any wonder that they sometimes feel like spinning tops? When distributor salespeople call on customers in any industry, the focus is on the customer and the customer’s individual needs. They are trying to find products in their portfolio that meet those needs. The other motivation for many sales reps in distribution is “incentive” and commission paid on particular product. All things being equal, the distributor sales rep will gravitate to the more highly incentivized product. Distributor sales managers must see their role as facilitators in this process, getting the best tools they can from the manufacturers and providing all the support they can for their reps. They must also manage the process so incentives don’t become a substitute for management and strategy.
Distributor sales managers need to be effective at creating a high-performing workplace by eliminating barriers to performance that include accepting poor performance and allowing wasteful work processes. Accepting poor performance can be mitigated by setting and following through on goals. Sales reps perform best when they know that everyone on the team is accountable for results. Effective sales managers work hardest with the top performers and eliminate the poorest performers.
Wasteful work processes can be eliminated by setting rules and sticking to those rules. Time wasters include sales meetings with no agenda. The best sales managers manage these meetings and are protective of the sales rep’s time. Sometimes this means having a heart-to-heart conversation with the manufacturers rep in love with his or her own voice.
Did I say the sales rep is the distributor’s most important asset? Yes, I did, but without effective sales management, the distributor sales rep will become what everyone complains about: an overpaid, undertrained asset. The sales manager in a distribution company is the critical link between the sales rep and the manufacturer. Unless that sales manager is able to provide focused product training and effective management, the rep will always be an underutilized asset, and sometimes even a liability.
It is important for material handling distributors and manufacturers alike to understand that sales managers aren’t just glorified sales reps; they just may be the most important asset’s most important asset.
|Meet the Author
Tim Horan is principal at Indian River Consulting Group, located in Melbourne, Florida, and on the Web at www.ircg.com.