On Growing Your Line Card in a Balanced Way--3/16

On Growing Your Line Card in a Balanced Way

It’s a phone call I get, unfortunately, several times a year. A MANA representative member calls to say, “I know I shouldn’t have let one principal become more than half my income, but that’s just how our business grew, and now that line has terminated my firm.” “I do have a couple of nibbles from competitive lines, but none of them comes close to replacing the commission income from the line we lost. What should I do?”

Looking back at those conversations, I’ve compiled below the suggestions those callers found most useful, both as guidance for you if you ever find yourself in this position and as a reminder to try to grow your line card in a balanced way if you can.

• Have a rep-savvy rep attorney from MANA’s attorneys list review the agreement that was just terminated. They may discover that you are entitled to more compensation than might be obvious.
• If your ex-principal is going direct, they may try to recruit one or more of your firm’s salespeople to become their direct salespeople. Give some advance thought to: If this happens, do I care? If I do care, what recourse do I have?
• When the territory you’re taking over for your new principal has much less existing business than the territory you lost, you can ask your new principal to help you by offering:
  • A “Life of Part, Life of Program” clause, so if you design in a part, they pay you commission on that part for life, even if they terminate you as their representative.
  • An extended termination clause, perhaps adding one month of severance for each year of service.
  • A “no house accounts” policy.
  • A larger territory than you had with your prior principal.
  • A commission bump for the first year.

And probably the best advice I can give you is to call MANA to talk through your options with me or with Jerry Leth, MANA’s VP and General Manager. Having a friendly, experienced sounding board during an emotionally-charged transition may help you see some options you might have missed on your own, and give you a better chance to take the lemons you’ve been handed and make lemonade.

Every principal that works with representatives will say that they want more time from their representatives. But very few seem to make a consistent effort to win the hearts and minds of their representatives and fewer actually achieve this goal. There is one word that if used regularly will likely get a representative’s time and energy: that is “goodwill.” In my experience, goodwill is the single most important thing a principal can offer in an effort to secure more of their reps’ time.

While Marnee Palladino may not have planned to forge a career for herself as an independent manufacturers’ representative, her passion for building relationships and providing solutions for individuals’ problems thankfully took her in that direction. Palladino, president of MARN, Inc. (formerly known as Facture, Inc.) Middlebury, Connecticut, today finds herself firmly positioned to meet the needs of customers and principals in the aerospace/aircraft, automotive, battery, computer, connector, defense, electronics, firearms, marine, medical, military, power generation, semiconductor, superconductor and telecommunications markets.

According to Palladino, “Following graduation from college I didn’t start out in sales. I began as a project manager for … Read the rest