The Evolving Role and Value of Manufacturer Representatives

A dramatically changing sales landscape in manufacturing favors innovation, strong technical skills, business savvy and adaptability. The most successful manufacturing reps and rep firms respond to this landscape in specific ways to drive sales growth.

The manufacturer rep model is the go-to sales coverage approach of choice for a large portion of manufacturing firms in a number of industry branches. In the past, traditional manufacturers, while excelling at innovation and production, lacked expertise in sales strategy, process and management to effectively drive sales and grow share. Independent representatives, and representative firms, provided vital expertise, complementary products, market reach and minimal up-front investment to drive manufacturer sales. This symbiotic relationship fostered the rapid growth of independent representatives and reliance on those reps for a high share of sales at many organizations.

The Rep Model Faces Significant Change

The manufacturing industry is currently facing rapidly evolving, innovation-driven sales models. These trends, in turn, are driving fundamental changes, below, to the traditional Rep model.

• Growing Need for Specification Skills: Manufacturers increasingly value the technical skills and the more complex sales process involved in specifying products and solutions through key end users and influencers. Rep agencies, though, often do not have the appropriate expertise and investment to support spec-driven sales.
• Increased Spend on Enablement Functions:  Regardless of the sales model in play (direct or indirect), manufacturers are placing more investment in and focus on sales operations, CRM, specialized selling resources and other tools to better manage a complex selling environment. This puts tremendous pressure on rep firms to complement manufacturer enablement functions and more closely integrate operational capabilities.
• Consolidating Customers:  Manufacturers, their distributors and end customers are aggressively consolidating, leading to a need for Enterprise, National and Global Account programs. By necessity, independent reps have to grow to better support large distributors and manage top accounts across traditional geographic territories. They also see a need to maximize sales with remaining geo-based customers as manufacturers move many of the largest accounts to “direct coverage.”

How Do Manufacturers and Rep Firms Respond?

Manufacturer reps have enjoyed a long track record of success and have prevailed through numerous challenges. But the dramatically changing sales landscape requires a more comprehensive and nuanced sales approach. Historically, rep firms focused primarily on managing end-customer and distributor relationships, and manufacturers on producing and delivering product. Both reps and the firms they represent have to adapt…but how?

Through a partnership with NEMRA (National Electrical Manufacturers Representatives Association), the Alexander Group (AGI) is executing a comprehensive study on how to maximize the value of the rep-manufacturer relationship. The full study will be available in the fall, but numerous executive interviews already offer some tantalizing key insights. Below are three key themes AGI will explore in more detail as the study progresses:

1. Leading manufacturers actively support reps in adapting to market change, from the C-suite on down to day-to-day sales management.
2. Successful rep firms continuously grow and coordinate that growth with manufacturers.
3. Manufacturers and independent reps increasingly integrate POS and CRM systems.

If you would like more information about independent reps, please reach out to one of our Manufacturing Practice leaders.

Read more Alexander Group insights on sales trends in the manufacturing industry.