9 Insights From AIM/R
Some things you know, some things you think you know, and other things make you slap your head wondering why you never knew that before. Knowledge picked up at the 38th Annual AIM/R Conference last March (see page 36) fell into each of those categories.
I’ve said it before and will reiterate that pound-for-pound AIM/R offers one of the richest lodes of information and education of any trade organization I’ve encountered in my 33 years covering this industry. Working almost entirely on vendor contracts guaranteed for no more than 30 days, the independent manufacturers reps that comprise the group operate at the cusp of entrepreneurial risk vs. reward. That’s why their conference programming tends to pinpoint that which is most relevant at any given time.
Here are some insights gleaned from their latest conference, held March 17-20 in Las Vegas.
1. The Great Recession has impacted everyone, but independent reps have had an especially tricky time devising survival strategies. Most wholesalers and manufacturers have cut staffs significantly to reduce costs. Some reps have done so as well, but most have had to tread lightly when it comes to downsizing. That’s because every staff cutback diminishes sales coverage and/or customer service, which doesn’t make principals happy. At the same time, many reps confided that they’ve had to increase secondary market coverage of contractors, engineers, etc., due to distributor personnel cutbacks that left many of these customers stranded.
2. Buying groups have been a nemesis to independent reps, who suffer slashed commissions and sometimes get cut out entirely on sales generated through BG programs. However, compared with previous years I heard relatively little angst about buying groups. Reps appear to accept they are here to stay and have adapted. In fact, for the first time I heard a rep express an upside to buying groups - “We’re getting exposed to wholesalers that never were in play before.”
3. Speaking on a panel in a breakout session devoted to manufacturer/rep concerns, Bradford-White Chairman Bruce Carnevale offered the opinion that manufacturer sales and marketing leadership ought to be in the same hands. “Marketing sets the strategy, sales executes the strategy,” he explained. “And they must communicate.” For marketing to succeed, it must have knowledge of sales strategies and weaknesses, and this is often lacking in organizations where the roles are separate.
4. Anvil Vice President of Mechanical Sales Harold Arrowsmith served on the same panel with Carnevale and predicted, “We’ll see some crazy price increases” in the near future owing to dramatic steel and scrap surges, along with hefty rises in container and freight costs. “This will help close the price gap between overseas and domestic producers,” he said.
5. Increasing customer service demands on rep firms was one of the topics pegged for discussion with the manufacturer panels. Bradford-White’s Carnevale was emphatic in stating that “we want to take away the CSR role from the rep.” Anvil’s Arrowsmith noted that his company just went to independent reps several years ago and “our first instinct was to shift (customer service) responsibility.” They have since grown an inside sales team and merely use reps to augment them.
6. Reps are caught between a rock and a hard place when contractors call on them to troubleshoot field problems. Typically they are not insured for doing hands-on work, yet that’s precisely what many downstream customers expect from them. Reps would like to see their manufacturers name them as additional insured on insurance policies to cover these situations.
7. One of the most frustrating experiences of being a manufacturers rep is when wholesaler executives tell principals the reps are doing little for them when they are in fact busting their tails for branch and operational staffers who never communicate what the reps are doing to the big bosses. “We reps don’t toot our horn enough,” said an AIM/R officer speaking at the group’s traditional “town hall” gripe fest.
8. At a manufacturer breakout session a rep complained - to much vocal support from his audience - that too many manufacturer co-op dollars go to fund wholesaler barbecues and other events that in his opinion “do not generate business.” He said that most reps could figure out better ways to use the money.
9. While lamenting the economic downturn, AIM/R Executive Director Bryan Shirley made it a point to emphasize: “Despite it all, this business is still all about people and relationships.”