AIM/R, the fine organization representing some 330 of this industry’s independent manufacturer rep agencies, publishes a membership directory that a few years ago showed Harry Warren Inc. as employing 10 people. The 2007-2008 version that just came out shows the agency’s staff at 26.
Even the latest directory listing is out of date, I was informed. Since that information was supplied, the agency’s staff has grown to 62. It’s been that kind of run for the southeastern rep agency Harry Warren Inc., whose sales have more than doubled in the last couple of years.
I knew the late founder and namesake of this agency - one of the classiest gentlemen anyone could hope to meet. We developed a friendship after I wrote an article about him for this magazine way back in 1978, titled, “A ‘Small’ Rep With A Lot Of Friends.” Harry Warren’s agency back then consisted of himself and one salesman, Ron Garrison. He spoke at the time of planning to hire a third person to open a satellite office in the Tampa area.
That came to pass not too long afterward, and the man recruited to run it was Harry’s son-in-law, Bob Mycoff. He and wife Leigh bought the agency from her father in 1990, which was a few years before Harry’s passing, and the Mycoffs have owned it ever since. In many ways it’s unrecognizable from the two-man rep firm I was introduced to almost three decades ago. The eight lines Harry represented in 1978 have grown to more than two dozen - some of which the agency sells beyond the Florida borders into Georgia, Alabama and the Carolinas. Whereas Harry Warren early on repped mostly commodity lines, the current mix emphasizes specification and showroom products.
Many changes have occurred, yet there is still a lot of the founder’s vision present in the way this agency operates. For one thing, they never got sidetracked into the retail market like so many other rep firms when the big boxes started behaving like 500-lb. gorillas back in the 1980s and ’90s. “We stayed away from that mode and decided to diversify within the distribution arena and contractor channel as opposed to trying to recreate ourselves in retail,” said Mycoff. “We just didn’t have any expertise there, and thought we could do better for both our customers and ourselves staying with what we knew.”
They also stayed away from warehousing until about four years ago, and still do little buy-sell. The relationship selling that Harry Warren excelled in still plays a part in their success, although the rep business has compounded in complexity over the years. Being friendly and diligent in customer service still counts for a lot, but only if coupled with business sophistication.
A couple of years after I covered the original Harry Warren story, I had dinner with Harry and wife Jean. A prime topic of conversation that pleasant evening was his excitement at the imminent acquisition of the InSinkErator line that virtually every plumbing industry rep covets. This was in 1980, and Harry Warren Inc. has represented that prestigious line ever since. It is one more component of the founder’s legacy.
Growth SpurtSmall rep firms find it nearly impossible to gain traction in today’s plumbing industry. The big, lucrative vendors want a sizable organization pushing them into the marketplace, yet it’s hard to grow into a sizable agency unless you can attract one or two of those plum lines. That, plus manufacturer consolidation, is forcing mergers and acquisitions. Harry Warren has grown in large measure by absorbing principals, key personnel and selected lines from smaller former competitors.
One of them was Bill Orris, then a 10-year industry veteran who joined the company in 2000 from a small specifications agency. He pushed Harry Warren Inc. headlong into spec sales. According to Mycoff, prior to that about 60% of the agency’s calls were on distributor personnel. Now it’s more like 25%. The bulk of their time gets spent trying to generate demand for their products via contractors, engineers, architects, owners and builders.
“Distributors are still important to us,” said Mycoff, “but distributors don’t have as many outside salesmen as they used to and we have taken on what used to be their jobs. In the old days we used to make these calls with distributor salesmen. Now, about 60-70% of our customers don’t even have an outside sales force.” The agency also has established a commercial quotations department to alleviate distributors from that responsibility upon request.
Mycoff credits Orris with driving the company towards a statewide spec rep format that was unusual in their market. “Most spec reps in Florida kind of stayed within local boundaries,” he noted. “One of the first things Bill did when he came on was to build Harry Warren statewide. First he did it with the Bradley line, which consolidated four reps into one statewide. Since then we have started something of a revolution with our specification principals by covering the entire state of Florida for them.”
Showroom sales has been another key element of their growth. It was sparked by taking on the Grohe line several years ago, which had been factory repped until then. “A lot of our distributors’ margins are driven by their showroom base, and we needed to be influential in that area.” Mycoff explained. “We have built that around our InSinkErator, Grohe, Swan and Elkay lines, and it is our fastest growing channel right now.”
Growth has also stemmed from acquisition of important new lines. When they took on the Watts line for Florida, for instance, they knew some segments of the business very well but needed to go out and hire experts in the backflow prevention side, as they didn’t have much experience there. Late last year they also brought in eight new people to accommodate the newly acquired Elkay and Cooper B-Line lines.
Can A Rep Be Too Big?That question gets begged with line proliferation. Not even the smartest reps in this industry can become experts in dozens of lines. With size comes the need for a management structure with line specialists. Mycoff credits Bill Orris with developing their company’s strategic organization of management and sales focused by channels. (See Link/chart below.) “It’s worked out well,” said Mycoff. “The channel directors have really developed expertise and become go-to people in their areas.
“We learned we have to be able to package product groups,” he elaborated. “With an engineer, we may be opening the door with a Bradley spec, but we’ll also be selling A.O. Smith, Elkay, T&S and other spec lines at the same time. We’ve driven the same concept into packaging our showroom lines, indoor water systems and so on. Our manufacturers benefit because we’re going in with a community of product lines, which gains more exposure for each of them than we could give them with single-source calls. This requires middle-management support with highly trained people, and we’ve done that. If we weren’t structured the way we are by channels, we wouldn’t be able to handle the amount of lines we do.”
Of course, line proliferation leads to line conflicts. All reps face this dilemma in a consolidating industry. Many of Harry Warren’s vendors sell similar products and Mycoff said this is an industry problem that must be dealt with case by case, market to market.
“The number one thing is to be honest with all manufacturers about how you intend to manage their product and take it to market,” he said. “You have to acknowledge conflicts and explain how you intend to deal with them. You also have to make sure all the salespeople out there know the commitments you make to your principals.”
Their approach is that existing business is secure and held true with their commitments. If there’s an existing base for Product A, Harry Warren sales reps will not try to sell Product B to those customers, and vice versa. If for some reason a customer grows dissatisfied with Product A, then the rep will pitch B. “That’s the only time we’ll make a presentation for a competing product,” said Mycoff. “We make that clear to our manufacturers.”
Things get tricky when one competing product might have a higher commission rate than another. These situations he regards as integrity gut-checks. It helps that the commission rates are known only to the agency’s principals. Harry Warren sales personnel get compensated strictly by salary, bonuses and a profit-sharing plan.
“Our compensation structure was handed down from Harry,” said the founder’s son-in-law. “He was very much against paying sales commissions. Harry believed in building relationships, and commissions lead to gathering orders as opposed to building relationships.
“The way we’re structured by channels requires a lot of interaction, which makes it hard to determine what part of a sale is due to which person. We want our sales teams supporting one another, not competing against one another,” said Mycoff.
Training ImperativeIt’s a chicken vs. egg question whether rep firms have gotten bigger because of added responsibilities or whether added responsibilities have forced them to become larger. In either case, Mycoff noted a big increase in the amount of time he and his people spend in training sessions with distributors and contractors. “We are probably involved in 10 different training activities per week, mostly for large groups,” he said. “That’s the best value we can contribute, I believe.”
Mycoff noted that as products have become ever more complicated with computer chips and other technology, industry training has dropped off in phase. As unions have diminished, so has the number of apprentices going through their vaunted training programs. Nonunion contractors also seem to do less in-house training than before, probably in response to economic pressure. “This gives reps value-added opportunities.”
He reasoned that training is a form of preventive medicine. “Training reduces our downstream problems. Even if you solve a problem and handle everything correctly downstream, it leaves a negative taste in everyone’s mouth. If you can eliminate 75% of the problems before they start, it turns a negative into a positive.”
This is especially important in an era of consolidation, he noted. With fewer distributors in place, conflict with any one of them gets magnified. “You have to make sure you’re not at odds with a large portion of the market,” Mycoff observed. Few things put reps more at odds with their customers than product failures in the field. On second thought, maybe one thing does - arguing about who is to blame for a product failure. Training helps prevent that.
Beyond Salesmanship“I miss calling on people in the field,” Mycoff shared at one point in our conversation. “My best days are when I’m out making sales calls trying to pull an order out of someone.”
He still does it on occasion, mostly calling on distributor principals, often with vendor personnel by his side. But mostly he shares the modern independent rep’s lament of being more a business manager than sales rep. Recently named to AIM/R’s board of directors, Mycoff is a big supporter of the organization and the professionalism it represents.
“Reps are not just salesmen anymore. They are strategic marketing consultants. The ‘New Age’ representative is more involved in managing market areas and developing plans for growth than ever before.
“A lot has developed within AIM/R and through rep councils (vendor advisory boards). We’re involved with six rep councils, all of which grew out of AIM/R. I learned early on that if we are going to help grow market share, we need a voice on our side. And progressive manufacturers are listening to us,” said Mycoff.
Lines Represented by Harry Warren Inc.A.O. Smith – FL, GA, NC, SC
Acudor – FL
Amtrol – FL, GA, NC, SC
Arrowhead – FL
Bradley – FL, GA, AL
Conine – FL
Cooper B-Line – FL
Durgo – FL
Eemax – FL
Elkay – FL
Endot – GA, NC, SC
Goss – FL, GA, NC, SC
Grohe – FL, AL, GA
Honeywell/Braukman/Sparco – NC, SC
In-Sink-Erator – FL, GA
Jackel – NC, SC
Jet Swet – FL
Jones Stephens – FL
Orion – FL
SJE/Rhombus – NC, SC
Sargent Tools – NC, SC
Septic Products – FL, GA
Snyder Industries – FL, GA, NC, SC
Stevens Pump – GA,NC, SC
Swan Corp. – FL, GA
T-Drill – NC, SC
T&S Brass – FL
Taco – FL
Watersoft – GA, NC, SC, FL
Watts Drainage – FL
Watts Water Technologies – FL