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What agents will not do for a principalIntroduction Koch Group has been working with manufacturers since the early 1970's to evaluate their existing agency or rep networks and to help them set up effective agents or reps to help grow their businesses. Based on that work we have put together a list of activities that a successful manufacturers' agent will NOT typically perform for their principals. Activities industrial manufacturers’ agents will not undertake for their principals:
Why they will not 1. Expand the markets and/or geographic areas they now serve to accommodate a potential or existing principal. An established professional manufacturers’ agents will not typically expand their selling efforts into new markets and/or geographic areas to accommodate a potential or existing principal. Taking this action dilutes the agency's’ existing selling efforts, strains the agency's finite manpower, management, and capital resources, and potentially puts relationships the agency has developed with major customers or principals at risk. 2. Take the lead role in getting a principal’s products approved, specified or certified with non-buying private, or public, entities. Almost all manufacturers’ agents generate their income by receiving a commission for the products or services they sell. Since spending time visiting state Department of Transportation offices or organizations like the American Society of Mechanical Engineers, Society of Automotive Engineers International (SAE), Underwriters Laboratory, National Electrical Manufacturers Association, or similar organizations, to obtain specifications or certifications generates no immediate income and detracts from their selling efforts, it makes no sense to conduct the work required to obtain a certification, approval, or get a product specified. Most agents are happy to play a minor supporting role to help a principal have products approved, specified, or certified. However, this activity is the primary responsibility of, and best handled directly by, their principals’ personnel. 3. Act as a credit rating agency for a principal. Most manufacturers’ agents do not have the analytical tools or experience to correctly evaluate an existing, or potential, customer’s credit worthiness. However, if agents have know a potential customer or customer is experiencing serious financial problems, they will typically provide this information with their principals.
4. Respond to requests for detailed sales call, or sales activity, reports. Manufacturers’ agents, by definition, are independent businessmen. Agents cannot by law be required to provide sales call or activity reports to their principals. However, most manufacturers’ agents will periodically supply information on activities being undertaken at key accounts that they believe has value to the principal. 5. Follow up on leads provided by principals that pushes the agency outside of their existing business model. Good agents understand that following up on leads that do not fit their agency or takes them outside of their territory will cost them time and money and dilute their selling efforts. As independent business owners, agents must use their time and efforts to their best advantage. 6. Act as on-going free technical consultants or a technical service department for their principals’ products or services. Successful manufacturers’ agents often possess the unique skill sets to act in a technical consulting capacity and will provide extremely valuable input and insight from time to time. However, their focus and time belongs to developing sales opportunities from their customer base, not providing free technical consulting.
7. Develop a principal’s sales and promotional tools. Manufacturers’ agents typically require that their principals supply selling and promotional tools. The agents may provide input for sales tools they desire or customize provided tools for specific selling situations, but the principals are responsible for the creation and expense of needed marketing tools. 8. Act as a principal’s bank or accountant. Professional manufacturers’ agents keep very accurate records of what they have sold so they can reconcile their commission statements with the payments they receive from the principal. However, if there are constant problems with overdue commission payments and incorrect commission calculations, it will strain the agent/principal relationship. If you are a principal that wants to successfully work with industrial manufacturers’ agents to expand your business it is critical to understand:
As an independent businessperson, a manufacturers’ agent must make decisions daily that impact their business and provide the most ongoing benefit to their agency. See how Koch Group's decades of agent expertise can benefit your organization's search for, or use of, manufacturers' agents. Related industrial marketing tips
Koch Group has over 35 years experience working with high performing manufacturers' agents. If you would like more information about our industrial marketing services for manufacturers and industrial service providers, please use our contact form or email us at info@kochgroup.com.
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