This column is long overdue. It’s a topic that just about every major manufacturer seems to agree with me on but, coincidentally, those manufacturers still using Reps (manufacturer’s representative sales firms) won’t go on record as agreeing with me.
Is the Rep dead yet?
OK, fair is fair. A disclaimer: I was identified by the Rep community as a “Rep hater” back when I took over as AMX’s VP of Sales and Marketing in 1997. Even though AMX’s executive team at the time asked me to help wean AMX off of using reps, I was the fall-guy – I was the one the Reps would love to hate.
In reality, nothing could be further from the truth. I agree there is a time and place for Reps (just like there was a time and place for labor unions).
But, is that time now and is that place a giant company like AMX or Telex or the other big-name manufacturers that continue to use Reps all the while, internally, complaining about them? No, I am not actually identifying AMX or Telex as wanting to rid themselves of Reps. But plenty of manufacturers did when I called to talk to those still using Reps and asking for a justification for using Reps.
The non-scientific poll I took, interviewing more than 40 major manufacturer VPs (major is defined as a manufacturer with sales in excess of $20 million) was that, although they use Reps, they wish (or actually have a plan in place) to replace Reps with direct-sales forces.
I do, also, see a time and place for Reps. Reps are perfect for helping to “get a company off the ground.” Most start-ups don’t have the investment capital to hire, train and deploy full-time sales people to be “in the field” pushing their product to the more than 2,000 AV dealers in North America. So, the next-best thing to doing that is to hire a Rep firm. Some of the best are, ironically, AMX’s and Crestron’s Rep firms like Marla Suttenberg’s Sapphire Marketing, Ted Curtin’s Repworks, Ron Devoe’s Total Marketing, Frank Weese’s Visitec Marketing and the Enright Company with Logan Enright leading the way. If I were a new manufacturer, I would call these five firms and sign them up IMMEDIATELY to be my Rep firm – these companies do, exactly, what a Rep firm is supposed to do.
But, at some point in time, many manufacturers outgrow Reps and need to move on to either direct-sales forces or direct marketing to reach the AV dealers and educate them on their company and products.
The advantages of hiring a Rep firm are plenty. You have a ready-made, comprehensive, ready-to-sell sales force able to penetrate any geographical regions, and do so with customers they’ve already established. For a new company, and especially when the founders are new to ProAV and unfamiliar with the channel, a Rep firm is the perfect solution.
They are also well trained. They may need training on the new products offered by that new company, but the Reps are well enough versed in ProAV to understand the product rather quickly, or else they wouldn’t be in business as long as they have.
But Rep many firms don’t eat, breathe and invest in your product the way a direct sales force does. The Reps have lots and lots of other products they can, and do, sell and ultimately their true allegiance is to the Rep firm, not to the manufacturer.
I’ll be the first to agree that maintaining a direct-sales force is a pain in the patooty. You get a lot of duds. You get hot performers that turn into duds. You even get some who never become duds because they somehow just somehow disappear. I’ve seen that happen, all of it.
But, with the right training, you get companies like Extron and Crestron – two of the best customer service direct-sales forces in the industry – NO ONE would argue that one.
Without a middle man or woman, the customer gets all the pre-sale information they need on the spot (there’s no “I’ll ask the company and get back to you” about product capabilities). Support is much better because that salesperson really has the customer’s back, pushing to get any problems solved quickly. This is not to say that Rep Firms don’t try and do this – but most don’t have the full capacity to pull it off – aside from the ones I mentioned earlier – the superstar Rep firms!
More than anything else, the company benefits – they get direct feedback from the market as to why a product is or isn’t selling. Salespeople are NOT shy about vocalizing reasons they can’t close deals.
So, with all that evidence, why don’t the big companies move to direct sales? There was probably a good reason five or so years ago, when technology was moving so fast. Every single AV manufacturer had to pour extensive capital into product development as DLP, plasma and LCD replaced CRT, and broadband shook up connectivity. But we’re now in a mature market, where not a lot new has happened lately. And that means focus needs to be on sales. And, if you ask me, that means direct sales.
But, again, if you see the need to use Reps, pick from the list I gave you above – these are the best of the best…