The value of independent manufacturers reps
Plumbing/HVAC tool heavyweight Milwaukee Tool reaps the benefits of a changed go-to-market model.
Manufacturers are faced with constant pressure when evaluating their sales efforts, and today’s rapidly changing world leaves no margin for decreasing revenues.
In determining go-to-market sales strategies, there have typically been two ways to approach our industry: factory sales coverage or independent manufacturers reps. While factory sales coverage may look better on a balance sheet’s bottom line, many manufacturers invest in manufacturers reps for myriad reasons.
Not only do manufacturers reps employ “feet on the street” to provide manufacturers with a larger sales team, but they also foster deep relationships with wholesale customers and contractors that would otherwise prove difficult for a factory sales manager with limited resources for penetrating a territory. Valuable manufacturers reps create long-lasting and meaningful relationships to deliver sustainable growth for a manufacturer.
Milwaukee Tool is one manufacturer that quickly realized how valuable manufacturers reps could be to its overall sales efforts. Today, Milwaukee Tool is a premier brand in this industry. However, look back a decade, and Milwaukee Tool was not the same powerhouse within the wholesale plumbing, mechanical, PVF, HVAC and electrical channel as it is in the present.
“In early 2007, the new executive team at Milwaukee Tool met to decide the direction Milwaukee would take looking out over the next 30 years,” explains Gene Wilson, director of sales and marketing at Milwaukee Tool. “There was a realization that Milwaukee had not been tethered to any long-term strategy over the previous 30 years. Trying to be all things to all people just was not a winning plan.”
At that time in 2007, Milwaukee’s sales team solely consisted of factory sales managers with a designated regional territory. As Milwaukee dug into its strategies for long-term, sustainable growth, a key component was the wholesale channel.
“We decided we were going to ‘deep dive’ on three trade verticals: mechanical, electrical and plumbing,” Wilson notes. “Like wholesalers, who are very ‘vertical’ in their perspective, we would develop into a solutions provider of products and processes that increased the productivity of those target verticals.”
Milwaukee Tool’s new sales plan was starting to develop: provide solutions to the professional contractor and deliver unmatched service through its wholesale partners. However, it knew there was a key component missing to the plan’s most essential element: its execution.
“With our new focus, many things had to be re-tooled: our product and our program, but also, how our people covered the distribution that added the most value to the strategy, the plumbing wholesaler,” Wilson notes.
Milwaukee Tool concluded that the best coverage model for the wholesale channel was through manufacturers reps. “Our move to a manufacturers representative model was a radical change for a power tool company transitioning into a solutions provider,” Wilson says. “We thought that properly trained and on-boarded manufacturers reps could deliver better continuity and executional excellence in the multi-branch environment of the PHVAC channel.”
Milwaukee’s first manufacturers reps were hired in 2010 to work in conjunction with its factory team. “We did not let any factory people go, but reassigned them to other channels of distribution,” Wilson says. “Without responsibility for the PHVAC space, our factory sales team has more time to concentrate on gaining market share in the electrical, power utility, industrial and automotive verticals.”
The new strategy was a win-win for Milwaukee. It provided the most valuable resource — time — to its existing factory sales team and brought a fresh perspective to tackle the wholesale channel through those who knew it best, manufacturers reps. The results for Milwaukee were an instant success. “Reps have a tribal knowledge of the market and distribution base as well as a shorter branch call cycle than we experienced with a factory model,” Wilson says.
Since 2010, Milwaukee has experienced massive sales growth, and the manufacturers rep sales model played a significant factor in this growth. Over this period, Milwaukee also has refined its rep hiring process to streamline manufacturers rep onboarding and continue creating efficiencies in its sales process. Wilson realized the importance of marrying Milwaukee’s core culture with the cultures of his reps during the selection process. “We launch some 600 new products a year, so product training is a recurring event and expectation. It’s a commitment we must have from our reps,” he says. “At Milwaukee Tool, we have been very fortunate to recruit and hire what we think are the nation’s best reps.
“We spend time analyzing and interviewing to find the right fit in culture and commitment. Our reps are focused on the ‘shelf’ needs that increase the turn rate of our wholesalers, understand our ‘high-octane’ culture, and will dedicate the time and effort to accelerate the sell-through of our products through our distribution into our targeted PHVAC trade vertical.”
Milwaukee has found a great harmony between its factory sales team and its manufacturers rep team. The harmony starts with the agency onboarding process in which Milwaukee’s regional managers are responsible for training reps on Milwaukee culture and procedures, and it continues in its everyday work where Milwaukee makes communication between regional manager and rep a non-negotiable on both sides.
The results for Milwaukee have spoken for themselves: significant market penetration and rapid expansion of its nascent wholesale sales channel over just nine years. Wilson will be the first to tell you how valuable his reps have been to this success.
“I had a meeting in Annapolis one year with my leadership team where I booked the group to a personally guided tour of the U.S. Naval Academy led by a retired captain and a retired Rear Admiral,” he explains. “My goal was for my team to find out from the U.S. Navy its ‘secret sauce.’ How do you take an 18-year-old who just went to their senior prom and make them command-ready to enter the fleet in four years? After a long day, the obvious was revealed to us: Recruit well; Expect high. That was very good advice.”