Changes are automatically saved. Reset Settings

Boots on the Ground:
The 2023 Agency
Rep Roundtable

Bringing demonstrated product knowledge, training and local relationships to the table, agency rep firm executives nationwide discuss current challenges as well as opportunities to serve up success as an extension of a distributor’s sales team

Corey Collins Principal, Agents West
Joe LiPuma President, Yusen Associates
Larry Rodger President, Synergy Electrical Sales

Steven Jobs once famously said that “great things in business are never done by one person. They’re done by a team of people.” And no statement could be truer when it comes to the mutual benefit and success that can be achieved when electrical distributors and agency rep firms work as fully-aligned partners.

Below, rep agency executives nationwide discuss the unique expertise and support their firms bring to electrical distributors and why reps are—or should be—a valued part of any savvy distributor’s sales strategy.

Key Challenges and Opportunities Facing Agency Rep Firms Today

Larry Rodger, Synergy Electrical Sales (Fairless Hills, Pennsylvania): Reps have faced many new challenges as the industry has evolved. Among them, accurate point-of-sale (POS) reporting has been an ongoing issue in our industry for a very long time. The National Electrical Manufacturers Representatives Association (NEMRA) has provided guidelines for distributors and manufacturers to follow and we’ve come a long way in terms of their overall adoption, but proper POS/POT credit is still a critical part of the distributor-manufacturer equation in order to ensure that rep firms are fairly compensated for their efforts and investments in support of distributor sales; this remains an opportunity for IMARK members, both on the vendor and distributor side. In addition, consolidation at both the manufacturer and channel levels presents constant challenges and anxiety for reps but can also lead to opportunities if the rep firm is positioned favorably. Rep firms must continue to carefully evaluate investments that will make them stronger and more attractive to the marketplace and their manufacturer partners in the long term.

Corey Collins, Agents West (Irvine, California): Consolidation continues to be a trend in our industry and mergers and acquisitions are prevalent across the distribution, manufacturing and agency sectors. As change occurs, challenges often follow, including strategy shifts, new partnership alignments, conflict management, revised cost structures and more. That being said, effective and frequent communication between all parties is critical. Our industry is resilient and is still one based on relationships; our ability to utilize technology, embrace emerging markets and build upon the foundations that contribute to success will allow us to adapt to the new challenges and opportunities before us.

Joe LiPuma, Yusen Associates (Burlington, Massachusetts): The biggest challenge I see facing rep agencies is the need to stay relevant. With the continued growth of e-commerce and B2C/B2B competitors like Amazon, we need to continue demonstrating value to both our manufacturer and distributor partners. NEMRA has developed “5 Pillars” for success in this endeavor, which include Technical Expertise, Demand Creation, Planning, Marketing and Technology. I believe that the most important pillar is Demand Creation, as both manufacturers and distributors are looking for rep agencies to call on contractors/end users to drive demand for their products. I think that electrical manufacturer rep agencies must successfully accomplish this mutually beneficial goal to remain viable in the future.

Key Elements/Traits of ‘Best-in-Class’ Distributor-Rep Relationships

Collins: Partnerships are built on personal relationships, trust and mutual benefit. The high value we place on certain customers isn’t solely based on annual sales/revenue or because we “like” them and have similar personal interests, but because they’re invested in our business and recognize that we’re working for their success and profitability. Our approach is no different than that of our IMARK partners—they have numerous customer accounts, but there are those you can truly depend on and want in the foxhole. It’s often more than simply “writing the order,” as many of Agents West’s relationships with IMARK distributors go back 20, 30, and 40-plus years. We believe that the majority of IMARK distributors embrace and place high value on healthy relationships with rep agencies. On the flip side, distribution business models where control is centralized are often difficult for rep firms to work with because they reduce or remove the opportunity for the distributor’s sales and operation teams to involve local expertise and forge beneficial relationships with area reps.

Rodger: Best-in-class relationships involve open communication and partnership on both sides. Reps that invest in “specialists” deliver greater value in terms of both training and demand generation as technology evolves and products and applications become more complex. Many distributors can’t afford to allocate that level of expertise given the scope of their entire offering, so the ability to aid in the distributor’s sales process and add value by generating demand favorably impacts a distributor’s perception of a rep’s value proposition. Our firm prioritizes the channel partners that recognize and utilize our investments in resources and in turn reciprocate with overall agency support. Conversely, distributors that are close-minded to the opportunity for rep firms to add value or support their product lines can be frustrating to a rep firm and, as a result, may experience waning support from the rep. This mentality can short their employees of critical avenues of training, marketing and field-level support.

LiPuma: The best distributors are those that proactively sell to contractors in various ways, both with and without reps. Delivering value to electrical contractors can be difficult for the distribution channel and the best distributors draw upon reps to jointly provide product training, regular account reviews and effective and sales-generating programs involving market development funds (MDFs). Distributors that engage the rep community in achieving those objectives seem to have the most success. By contrast, distributors that keep reps at arm’s length seem to have a more costly go-to-market strategy, as we can be a free and effective extension of their sales force.

Common Misperceptions Distributors Have Regarding the Role of Agency Reps in the Sales Process

LiPuma: One misconception that seems to pop up on a regular basis revolves around the commission structure reps operate under; many distributors think they’re much higher and are often shocked at the low percentages. Another misconception is that reps are under 30-day contracts. On average we make less than 7%, so getting distributor mindshare to promote and sell our products is vital for our success when operating with such tight margins.

Rodger: Many distributors have historically considered end users “their” customers and are sometimes wary of rep firms that call directly on them. But a strong rep firm will communicate openly and drive orders back to distribution to deliver tangible value and help increase sales and hopefully profitability for distribution. I’ve yet to see a distributor complain about a rep firm generating more sales for them as an extension of their sales force (provided that profitability levels are respected and maintained). Project negotiations are sensitive, but the channel seems to be okay when the rep goes beyond the distributor’s immediate client (the electrical contractor); if the rep is working the architect, engineer or end user, the rep is respected a lot more than when they work with the contractor and attempt to set the channel’s margin with no regard for the logistics and services the channel might be providing while delivering that project. Many times, reps make the mistake of commoditizing the services distributors provide and referring to them as “the bank.”

Agents should recognize the overall value of distribution and promote that the distributor can do so much more for a project than just mark up material and direct-ship a job. At the same time, rep firms must arm distribution with knowledge through training, available sales tools, promotions and samples to increase value through sales enablement.

Collins: NEMRA recently conducted a study in conjunction with manufacturing, distribution and agents that was designed to help reps best serve our manufacturers and customers in the future, and it resulted in the identification of 5 Pillars that define the “Rep of the Future.” Pillar No. 1 is “product expertise,” which is a staple of the rep community; we’re the experts in our local market, invest in specialists and maximize manufacturing training resources to become a valuable provider of product knowledge and solutions. Pillar No. 2 is “demand generation,” a vital function which is at the heart of why a manufacturer hires an agent in the first place. Pillar No. 3 is “planning,” which represents the collaboration between manufacturer, agent and distributor and the place where local market intelligence and factory objectives merge; it’s also where programs and initiatives are developed, resources are assigned and allocated and timelines and expectations are set. IMARK is a leader and allots a variety of resources to facilitate the planning process. Pillar No. 4 is “marketing,” the joint effort between agents, manufacturers and distributors which ensures that customers, installers and specifiers are receiving the appropriate information in the most effective way. And finally, Pillar No. 5 is “technology,” which is a critical element; agents are often on multiple manufacturer CRM and ERP platforms, including their own, but the more seamlessly data can flow between manufacturers, agents and distributors, the more effective we’ll all be in accomplishing our mutual goals.

Best Ways for Reps and Distributors to Work Together to Generate Sales Growth

Collins: As mentioned earlier, successful distributor and rep relationships revolve around trust, open communication and accountability. If a product or program has been agreed upon and is mutually beneficial, representatives often need the support of distributor management to assist with the implementation/integration. The representative should be in a position to offer inventory, pricing and project support to ensure a program’s success.

LiPuma: Generating sales growth is critical to our value proposition and I believe that our best distributors not only allow us access to their sales and marketing teams but encourage and promote partnership, as the best results of any promo/initiative are those that are supported by senior sales leaders. At the same time, our best promotions are those in which the distributor sends out weekly scorecards, which promote internal competition (and which some call the “name and shame” list). The sales data shared is an enormous help to manufacturers, as we utilize market development funds (MDFs) for most promos and use this data to determine whether we’re getting the best return on the deployment of those funds.

Rodger: Successful rep/distributor team members work together to promote products via joint marketing efforts and customized local sales promotions. Joint sales calls are often beneficial as part of a distributor’s sales efforts and simultaneously serve as real-world training exercises for distributor sales staff. Modern rep firms also maintain a strong marketing presence and can assist distribution in the entire planning process and effective joint coordination of MDF programs. Manufacturers focus on their branding from a national or even global perspective, while a rep and channel partner can hone it into a far more organic and relatable message for their local marketplace.

Final Messages Regarding Opportunities for the Distributor-Rep Agency Relationship

Rodger: Rep firms have continued to expand and evolve with the industry and IMARK distributors have opportunities nationwide to increase their overall sales performance, marketing efforts and factory liaison network by partnering with the rep firms that are vested in their given markets. It’s undeniable and proven that rep firms can add value to the equation if trust, integrity and communication are present.

Collins: The accountability and success of the electrical channel rely on the reciprocated commitment of distributors, manufacturers, agents and end-user partners. IMARK distributors continue to lead the industry based on their entrepreneurial spirit, strong relationships and partnerships. Agents West, our peers, and the manufacturers we represent desire to see IMARK and its members continue to thrive!

LiPuma: Staying relevant is the biggest challenge for both reps and distributors, and the question comes down to how we can mutually ensure that contractors see value in our channel. The answer starts with a trained and knowledgeable sales staff for both of us. Contractors are looking for more than just inventory—they rely on distributors and reps for product expertise and training. The workforce is turning over and training the next generation needs to be at the forefront of what we do. We’re fortunate to have so many progressive distributors in our territory; the access they allow us both to and through their employees is stronger than ever.

An Interview with NEMRA President and CEO Jim Johnson

Founded in 1969 and based in Carmel, IN, the National Electrical Manufacturers Representatives Association (NEMRA) has been supporting its independent sales representatives and manufacturer members and promoting the benefits of doing business with agency reps for more than half a century. In the following interview, NEMRA President and CEO Jim Johnson discusses some of the key challenges and opportunities currently confronting independent sales reps and the value of strong distributor-rep relationships.

What are some key challenges and opportunities facing agency rep firms today?

Johnson: The industry is facing unprecedented change with rapidly evolving, innovation-driven sales models that are driving fundamental shifts to the traditional rep model and how the “Rep of the Future” will be defined. Among key issues, manufacturers increasingly value the technical skills and the more complex sales process involved in specifying products and solutions through key end users and influencers such that we’re seeing a growing need for specification sales. Reps are charged with knowing their products as well as the actual manufacturer, which requires reps to evolve from a “sales resource” to a “demand generator” by investing in and adding more technical and specialized sales resources focused on end-user engagement. In response, we believe that the Rep of the Future will devote more time and resources to demand generation and investments into product expertise. In addition, there’s been increased spending on enablement functions whereby manufacturers are placing more investment in and focus on sales operations, CRM 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. In response, the Rep of the Future will need to devote more investment and resources into technology. Finally, there’s been an aggressive consolidation of manufacturer, distributor and end-user customers. By necessity, reps must grow to better support large distributors and manage top accounts across traditional geographic territories. They also need to maximize sales by maintaining and developing existing geo-based customers as consolidation continues to impact relationships and commissions. In response, the Rep of the Future will need to be more strategic in account and agency planning and marketing.

What are common misperceptions distributors may have regarding the role of agency reps in the sales process and how can you dispel them?

Johnson: A NEMRA representative’s job is to ensure that their manufacturers are fully supported for growth and profitability within their target market. Acting as an extension of the manufacturer and both maintaining, and, in many cases, developing the relationship between the distributor, end user and manufacturer, NEMRA reps play a critical and necessary role in the sales process. There was a time when distributors could pioneer new products, but, with 20,000-plus SKUs and excessive product duplication, those days are gone—even the best distributor sales representatives don’t have time to put every new product in front of their customers. This is where focused, multi-brand representation and support from a NEMRA rep is a healthy, necessary component of the distributor’s sales effort. NEMRA reps provide a level of service to distribution that’s more focused and targeted than a manufacturer can provide. They have close relationships with end users, understand their needs and can help distributors deliver the variety of solutions they need to offer their customers

What final messages would you like to share regarding the strength of and opportunities for the distributor-rep relationship going forward?

Johnson: Relationships between reps and distributors are the difference between products moving through the channel and collecting dust on warehouse shelves. Getting the most time and attention possible from your NEMRA sales rep starts with open and frequent communication. It grows when distributors give reps access to the information they need to make them (and the distributor) successful, and it endures when distributors make them a vital part of their organization.