Paying the Rep for Work Done
A Recent Court Decision on Rep-Principal Relationships
According to Tom Moore, an attorney with the Minneapolis, Minnesota-based Watje & Moore law firm, "An important lesson for the principal and the rep in this case is that if the rep successfully performs the work the principal asks him to perform, then he should be fairly compensated for his efforts." Moore highlighted the advantages of oral agreements over written contracts in certain situations, explaining that a poorly worded contract could allow for the rep's termination, putting the rep at a disadvantage.
The case in question involved a rep working with an importer of rugs, responsible for convincing retailers to join the manufacturer's rug program, which featured automatic reorders. Despite fulfilling his duties, the rep was terminated once successful. Moore stated, "It was a case of the principal saying 'Thanks for the effort. Goodbye. The program will go on without you.'" The court ruled it unreasonable to cut off the rep's income stream, leading to compensation through the end of the year, including attorney’s fees and court costs.
How Reps Can Help or Hurt Sales Growth
At the PTRA Conference in Tampa, Tom Robertshaw, senior vice president of sales and strategic planning for Motion Industries, Inc., discussed the role of trust in supplier-rep relationships. He emphasized the importance of reliability, problem-solving, honesty, and maintaining updated information as key to assisting sales growth. Conversely, he warned against practices such as offering unequal discounts or bypassing the distributor, which could harm sales growth.
Keys to Replacing a Marketing Director
A discussion at a recent conference addressed the challenges of replacing a marketing director who was a rep's advocate. The new, less experienced director struggled to appreciate the reps' contributions, leading to suggestions of either hiring someone with a proven track record with reps or allowing time for learning from the predecessor.
Tips From Rep-Savvy Manufacturers
Manufacturers shared insights on working effectively with reps, stressing the dangers of demanding conformity and the benefits of long-range planning. They noted that understanding unique conditions across territories and communicating future plans can lead to fewer problems and better sales outcomes.
Gaining a Foothold with Large Clients
One manufacturer spoke about the switch from direct sales to using reps, which led to immediate and significant improvements in reaching large clients. The existing relationships and frequent presence in the field provided by reps were key factors in their success.
The Value in Reps Speaking to Each Other
Networking among reps has proven beneficial, as shared during a rep council meeting. Encouraging communication within the rep network has helped prevent problems and fostered the adoption of effective business practices, demonstrating the value of ongoing communication.