As I continue my series on closing the gap between independent sales reps and their principals, I thought the next step would be to talk about what reps are looking for in an ideal rep-principal partnership.
I talk to a lot of sales reps, and they frequently tell me they tend to be treated as outsiders by the companies they represent. Once they bring in the accounts and the company’s team takes over, they seem to be forgotten. Over time, as the relationship between the inside sales team and the customer matures the sales rep is left out. When I’m working with a company, I’ll often hear them say things like this about sales reps:
- “Why does the rep have to be in the loop? It’s our turn to take care of the customer.”
- “I don’t understand why we are paying that rep anything at all. After all, we are taking care of the customer now.”
- “What has the rep done for me lately?” (An ever-popular statement.)
When I hear these comments, I always go back to my old standby answer: “Before you signed the rep you did not have that customer. The rep brought you the customer. They did the hard part. Without that rep you would not have that customer to service.”
I point this out as one of the most relevant and prevalent problems that reps have with their principals. In the words of the great philosopher Rodney Dangerfield, the reps just “don’t get no respect.”
Now for the sake of moving this fragile-almost-broken rep-principal partnership, I’ll list some of the other issues that reps have with their principals. I think it’s helpful to first list the problems because then you can start to fix them. (Principals, you’ll get your turn in next week’s column.)
Here are four things reps would like to see in a good and productive rep-principal partnership:
- Appreciation and respect. Reps feel they are just not respected by their principals. The relationship is looked at in a “what did you do for me lately?” way, rather than an appreciative respect of what the rep does for their principals.
- To be considered a true partner. They want to be kept in the communications loop. Someone who gets treated as part of the team. Often, the rep is barely remembered when it comes to the seller-customer relationship.
- The rep needs to get paid. The rep already is waiting way too long to see any commission money. This business of paying the rep when you get paid is a very lousy deal for the rep. What if you told your laminate supplier they would get paid when you do? What if you said that to any of your direct employees? How would that work? Think about how you feel when one of your customers, especially one of your big ones that you can’t afford to lose, tells you they have new payment terms. They tell you that you’ll get paid 120 days after receipt of the invoice. How does that make you feel? Not great, right? Well, just remember that your rep will only get paid 30, 60, or even 90 days after that. Principals might be gnashing their teeth over this one. They might say something like, “You can’t expect me to be your bank. That’s not fair.” But wait a minute. How fair is it for the rep to wait even longer to receive their commission? It’s not fair, and in fact, this is the biggest issue that must be solved. It takes a lot of time for the rep to develop a lead, get the principal qualified, win a quote, and book the order. Then it takes time to build and ship the product. Finally, they must wait for payment from the customer and then to be paid by the principal. It’s just too damn long. Period.
- Avoiding the “success penalty.” There seems to be a “punishment” if the rep is too successful. I have heard too many stories of reps doing a terrific job, courting really big customers, and landing multi-year, multi-million-dollar contracts. This might be the award of their lives—and the company. But then the accountant comes in to let you know how much the rep will earn in commission from this sale. Whoa, it’s a big number. So, you become convinced to go back to the rep and negotiate their contract—it’s just not right to make that much money. The best part? When the sales rep doesn’t agree with you, you fire them and encourage them to sue. What are they going to do about it?
The road to rep-principal hell is paved with stories like this, and I have heard them all. Next week, I’ll focus on the principals. They also have a lot to say about why this relationship is fractured. Turn around is fair play.
It’s only common sense.
Dan Beaulieu is president of D.B. Management Group.