October 2000The Manufacturer's Eyes And Ears In The Marketplace
by Bruce Marlin - CEO
Have you ever wondered why a manufacturer decided on a particular market direction, how they came to making that decision, or who made it? If you have found yourself asking these questions, you probably didn't agree with their direction. When you compare those manufacturers with those who always seem to get it right, it is obvious that the latter make better business partners. What makes the difference? In every case that I have observed, the difference is a highly active rep force strengthened by a very involved rep council.
There have always been those manufacturers who seem to have intuitive knowledge as to how to partner with their reps, getting the most out of the relationship. As for the rest-well, they're learning fast, and getting a lot more competitive. I attribute this to the fact that so many of them have formed rep councils. In an industry known for being engineering driven, the engineers are doing a better job of listening to the market. A growing number of manufacturers are relying more and more on rep councils to do that listening. Councils can better provide them with the answers and solutions to the most challenging of questions and problems they face in today's marketplace. The future course of many manufacturers has been greatly influenced, if not out-and-out plotted, by rep councils.
Rep councils aren't a new concept, just an old idea that has found new popularity over the last 10 years. As our industry has become ever more competitive, manufacturers have turned to their reps to test the market's reaction to new ideas and to gather insights into the ever-changing direction and trends of the marketplace. Recently, I have had many of my associates ask me, "What do rep councils do?" and "How does a manufacturer pick who sits on a council?"
Over the last 15 years I have worked with a dozen or so councils. They can have a positively dramatic effect on a manufacturer's business, or be a complete waste of time. The rep councils that have had the most positive results shared several traits. To begin with, a manufacturer can make or break the effects of their council right from the get-go. Manufacturers must be prepared to take the good news with the bad. As fundamentally simple as this may seem, I am still confounded by how some react to the council's findings. If a manufacturer isn't prepared to hear the truth, regardless of how hard it may be to swallow, they should save everyone's time and money. Rep councils are expensive endeavors; if a manufacturer isn't ready or able to take action based on their findings then they (manufacturers) should stay locked up in their ivory towers.
On the other hand, when a rep council is given proper direction and is well assembled, it can be an extremely effective way to explore market attitudes and gather pertinent data for new products and marketing programs. A good council can define the future for a manufacturer and its product lines.
Assembling the council is the first challenge facing a manufacturer. The best councils I have worked on were made up of only five or six members. These reps should be chosen from markets that are widely dissimilar both in size and interests.
The purpose is to air credible, yet divergent opinions. For instance, a council that is made up of reps from New York City, the Southeast, the Central Midwest, Northern California and the Pacific Northwest will be a better representation of the U.S. market than a council made up of reps from New York City, Chicago and Los Angeles.
The role of a rep council is simple: they are the manufacturer's analysts and advisers whose eyes and ears are keenly focused on the marketplace. Its goals are equally simple: to provide the manufacturer with a clear and precise view of its market, to assist the manufacturer in making sound decisions pertaining to its market, and finally, to facilitate the execution of their decisions, particularly those having to do with the rep force.
Another equally important element is picking the correct individuals from the selected firms. Most firms are made up of several sales representatives. They break their territory into regions or by market niches and assign one of their reps to cover each area. A good council will be made up of individuals from each firm whose view will most reflect the territory as a whole rather than one region or market niche. This would generally be the principal, president, VP of sales or sales manager. It's also important not to place too many dominant personalities on the council at one time. These are passionate and very well-meaning people, but they will exert a strong influence on the council. They also, more often than not, tend to be an inhibiting influence on what should be an open atmosphere charged with creativity.
Once the council members are picked, the frequency of meetings and locations can be worked out. Generally, two to three times a year is sufficient to deal with most issues. Meetings typically take two to three days including travel time. On occasion, a timely issue will pop up, prompting the need for additional meetings. Often, these can be dealt with via a teleconference. The most productive councils that I have worked on were scheduled between major events such as trade shows or product roll-outs. Other than an emergency, simple issues, or a brief presentation, scheduling a rep council meeting before or after trade shows is a very bad idea. There simply isn't enough time and far too many distractions surrounding trade shows to thoughtfully analyze data and come up with creative solutions.
Once the council has been selected and the individuals from each firm have agreed to meeting times and locations, finalizing the agenda is the next challenge. If data generated from a marketing audit is part of the agenda, give the reps at least30 to 60 days to complete their audit interviews. It's absolutely essential that a well-prepared script of statements and questions come from the manufacturer, assuring that the statements, questions and props are presented exactly the same for every interview. If left up to the reps, no matter how good their intentions, they will present the script with their own twist, resulting in flawed data.
After the research has been done and the agenda set, it's time to host your meeting. It's vital to the long-term success of a council to elect a moderator and select a secretary/recorder. I have worked on councils that were loosely structured with no hierarchy and the results were lacking at best; and the council quickly petered out and went away.
To establish a hierarchy, the first order of business is to elect, by the attending reps, a moderator to preside over the meetings. The moderator's role is to establish and maintain structure of the council's business. The moderator will hen appoint a secretary/recorder, whose reading of the minutes keeps the council focused and on task. Nominations and elections should be conducted by whomever oversees sales, such as a national sales manager.
Each council member should serve one term (a term being one year). Exceptions to this can range from special projects to ask force or committee assignments, hose goals will take longer to achieve than the remaining term.
Moderators and secretary/recorders may serve up to two terms. Their additional year is spent consulting with the manufacturer on who should be selected for the next council. This assures the new council is seated and everyone is clear about his or her responsibilities.
They also carry over any old business. Having the moderator and secretary/ recorder from the preceding council preside over the opening of the new council assures continuity. Councils who cycle their members every year stay fresh and bring a new perspective to the table. Once the new council is seated the old moderator will then conduct the elections for his/her successor.
Once this is completed, the old moderator will serve as adviser to the new moderator. The new moderator will handle the appointment of a secretary/recorder.
Each council member will also take the role of a regional council representative. As such, they will share the upcoming council's agenda with neighboring firms from their region who weren't seated on the current council. They will poll these firms for their opinions and ideas. These firms may have additional ideas or issues they would like the council to consider, which will be presented to the council moderator. The moderator, after careful consideration and polling of the other council members will then decide whether these issues are appropriate for the upcoming council meeting's agenda.
The way a meeting is conducted is as important to the success of a rep council as any other aspect of what I have just discussed. I can't stress enough how important it is that councils be afforded ample time to meet alone. That is to say, meeting without a representative of the manufacturer present. This is to discuss their findings and the data collected from market audits, projects, upcoming issues and proposing of new topics. They will assign a spokesperson to represent the council's position on each subject. Council members will also use this time to organize their thoughts and prepare to meet with the manufacturer. The final agenda is agreed upon and the council is then ready to meet with the manufacturer.
Once the manufacturer joins the meeting it is run like any other well-organized meeting. It should always start with the reading of the minutes. This is a great way to keep the council focused and should only take minutes to complete. Marty times, councils get caught up in minutia, losing sight of the big picture. After any corrections or additions of the minutes, the council accepts them as accurate and complete. Now the stage has been set for the meeting to move into the phase where work gets done.
Next up is old business. To keep the meeting moving forward in an organized manner, moderators work from the meeting agenda. Spokespersons will present the council's position on the subjects at hand. Often, after a spokesperson finishes their presentation it's appropriate to move the meeting into an open discussion, this time with the manufacturer's involvement. Usually manufacturers will have to, at a later date, inform the council of decisions made concerning the opinions expressed by the council. When the council has presented all their opinions, task force findings and the open discussions concluded, the meeting can move to new business.
New business is the appropriate time for the manufacturer to present their questions and new projects to the council. This is also the appropriate time for the council to get clarification of recent decisions or pose new questions and issues back to the manufacturer. This is the time when new task forces or committees may be formed and a list of issues will be drafted so each council member can go back and query the other firms in their regions.
The role of a rep council is simple: they are the manufacturer's analysts and advisers whose eyes and ears are keenly focused on the marketplace. Its goals are equally simple: to provide the manufacturer with a clear and precise view of its market, to assist the manufacturer in making sound decisions pertaining to its market, and finally, to facilitate the execution of their decisions, particularly those having to do with the rep force.
Technology is evolving and developing at an unprecedented rate. The competition is mounting like never before. Customers are more sophisticated, better informed, and have more products to choose from. To compete in today's marketplace we must do a better job, and that includes working closer with our business partners. The business partnership manufacturers and reps have developed is actually a three-way partnership, that being dealer/contractor/ consultant as one entity, reps and manufacturers being the other two entities. It's important to understand who this partnership's customer is. We can never lose sight of the fact that the end-user is our customer. All that we do is in pursuit of their trade and satisfaction.
Our industry's leading manufacturers that have enjoyed long-term growth and prosperity have a long history of successful rep councils. More manufacturers are learning how to work better with their rep partners by establishing and working successfully with rep councils. This will only strengthen the partnership providing better products and services to the end users. In short, rep councils are very good for the future of our industry.
Bruce Marlin (Bruce@Mar-Con.com) is president of Irving, 7X-based Marketing Concepts, founded in 1984.
Date Written: October 2000