Things I Learned At AIM/R's 34th Management Conference
Some educational conferences are better than others. The one put on each year by the AIM/R organization of PHCP industry independent manufacturers reps consistently ranks among the industry's best. Few are better targeted to member interests and probe so widely and deeply into pertinent topics.
This year's version was held in San Antonio on May 4-6, and featured 10 separate programs spanning topics ranging from legal advice to tax tips to health care options to negotiating with principals and more. Especially compelling, judging from audience buzz, were presentations on new product development by Gerber's Director of New Product Development Victor Post, marketing consultant Terry Brock's two programs on modern high-tech selling tools, along with a panel session on showroom selling featuring a couple of distributor showroom managers. This is not to slight the other half-dozen presenters, all of whom had information of value. I saw no one nodding off during any session.
Conveying the essence of these programs is impossible to do in limited space. An easier task is to cull some details that stick in the mind from either the educational programs or networking encounters with AIM/R's spirited members, as follows.
- AIM/R reps are a level-headed bunch. Independent reps are beset with a number of threats to their livelihood stemming from both manufacturer and wholesaler consolidation, as well as the cost squeeze from global competition. Yet, one hears little whining at this gathering. The prevalent attitude was expressed by Conference Chairman Frank Parks, who kicked off the Conference saying, “We like what we do for a living. We have to sell value to persevere, or people will cut us out.”
- We've been hearing chatter about a potential housing market collapse for at least a year. Gerber's Victor Post put a unique spin on things. He pointed out that private residential construction has averaged 8.6% compounded annual growth for the last 13 years. In the last 12 months, that has shrunk to 6.5%. “This is the correction everyone is talking about,” he stated. He sees the residential market slated to pick up again soon.
- According to Post, development costs for a new product tend to be roughly 6% of sales at launch. That must be brought down to 2% after five years to make it worthwhile.
- In his program on “Health Insurance Options,” Gary Looney of Alamo Insurance Group pointed to familiar data detailing annual double-digit growth in health benefits costs ever since 1999. More surprising was data he presented showing the dramatic decline in consumer out-of-pocket spending. According to Looney, in 1960 Americans on average picked up 49% of the tab for health care costs. By 2005 that had dropped to 9%.
- Much of Looney's presentation focused on Health Savings Accounts. HSAs are a promising new device that some people expect to become the dominant form of health care funding in the near future. Skeptics, however, point out that the sickest patients are likely to blow through the savings quickly and then some. HSAs will not be a cure-all for what ails our health care system.
- The reps in attendance acted like kids in a candy shop during Terry Brock's presentation focusing on high-tech tools such as webcam videos and worldwide Internet communications via www.skype.com. Had there been a Best Buy store on premises, the aisles would have been packed immediately afterward.
- Selling to showrooms presents special difficulties owing to limited display space compared with the room on warehouse shelves. Sometimes it means replacing a cherished line that's “dead.”
- Five years ago, AIM/R leaders raised the issue of inviting greater participation by manufacturers in their conference. The vast majority of members were opposed to letting them have any say at all. A show of hands at this year's event showed sentiment turned 180 degrees, with only a handful objecting to their presence. Exact details of participation remain to be worked out, but the atmospheric shift was dramatic.
- Manufacturers seem to hold most of the cards in the independent rep-vendor relationship, but one factor is increasing reps' leverage significantly. That's the flood of imports seeking representation for the U.S. market. Nobody wants to give up a plum line for an unknown company, but alternatives now exist in many product categories.
- AIM/R reps take their volleyball seriously. For the past several years SUPPLY HOUSE TIMES has sponsored a volleyball tournament at the AIM/R Conference. Participation is tremendous, and the competition fierce. Only the net keeps it from being a contact sport, and on occasion its sanctity has been violated.