Understanding Your Manufacturer

1. Understanding Your Manufacturer Scott E. Lindberg, CPMR Director of Sales Microsemi – Power Products Group Phone: 303-805-1674 slindberg@microsemi.com Scott Lindberg

2. Understanding Your Manufacturer “Welcome to the Dark Side…” “Darth Lindberg”

3. As a rep…The Rocky Mountain Territory... • Electronics Representative Association • Rocky Mountain territory • 25% of the continental United States • 4% of the U.S. population • 2-3% of the electronic U.S. market share • 65% of designs manufactured out of area • Territory Coverage • Four/Eight outside salespeople • One outside distributor manager • Two/Four inside salessupport personnel • 20 Years in the Rep Industry Scott Lindberg

4. As a Principal…The West & the Central Areas... • APT – Advanced Power Technology • Western Regional Sales Manger • Microsemi Corporation • Director of Sales – PPG Division • Central Area Sales Manager • Responsibilities • Managing the Reps • Managing RSM’s • Working with Distribution • Key Accounts • Growing Sales • Over Communicating • 3 Years as a Manufacturer Scott Lindberg

5. 6 Divisions • Military & Commercial • Diverse End Markets Scott Lindberg

6. As a Manufacturer • Working with… • Commercial Business • Reps • RSM’s/ASM’s • Military Business • Direct Sales People • House Accounts • The Reps “Four Letter” Word… Scott Lindberg

7. Agenda • Why do Manufacturers Use Reps? • Why do Manufacturers Go Direct? • What Manufacturers want in a rep firm? • A Look from the other side… • Understand the Manufacturer • Rep Firm Evaluation • Red Flags • Best Practices Scott Lindberg

8. Let’s Begin… • Manufacture, Principal, Factory…. • Which of the following is true? • They have empathy with their reps… • They want to pay more commissions… • Maximizing your field sales time is key… • Give you everything you need to be successful… • Are people you want to have over for dinner… • Never waste your time… • Regional managers are top notch… • All of the above and more…. • Manufacture Bashing 101… Scott Lindberg

9. Why Do Manufacturers use Reps?...

10. Why Do Manufacturers use Reps?... Good Reps are the lowest cost alternative to go to market… • Variable Cost • Start up costs are low • Synergistic • Multiple reasons to see a customer • Other lines share in the costs Scott Lindberg

11. Why Do Manufacturers use Reps… • Commitment to their market • Strong local market knowledge • Tenured Employees • Long term relationships • Customers • Distributors • Geographic Coverage Scott Lindberg

12. Why Do Manufacturers use Reps… Additional Values • Additional Cost savings • Medical • Auto • Communication • IT • Relationships, relationships, relationships Scott Lindberg

13. All of these are reasonsthat manufacturers use reps… The problem is, most manufacturers don’t know it!

14. Since most manufacturers don’t understand the rep business and… • You do understand…. • Show the value you bring • Sell what you do • Sell the Rep function • If you or your people don’t understand, learn & teach… • Call in the experts • Ask your Association Executives • MRERF Scott Lindberg

15. Why Do Manufacturers go Direct…

16. Why Do Manufacturers go Direct… Direct Sales people… • Perceived or Actual Cost savings • Control • Activities • Time • Focus • Technical Product • Little or no Competition • Large strategic accounts Scott Lindberg

17. Why is a change made from one to the other… Rep to Direct… • Cost savings • Economic reasons… • “Accounting” Focus • Poor Performance (Rep to Rep) • Rep/Direct sales force is not meeting expectations • Sales volume • Time allocation • Politics • Management philosophy change Scott Lindberg

18. Why is a change made from one to the other… Rep to Direct… • Manufacturing is moving out of the territory… • Hard to track splits commissions • Less work on new designs • Manufacturer decides rep force isn’t focused • Direct Sales force is focused (The problem is the commission structure) Scott Lindberg

19. Other Issues… Rep to Direct… • Should you flaunt your income… • Automobile • House • Boats • Travel • The rep business can be outstanding… • Be careful Scott Lindberg

20. Why is a change made from one to the other… Direct to Rep… • Cost savings • Sales have declined, no longer a viable direct territory… • Performance • Direct sales force is not meeting expectations • Politics • Management philosophy change Scott Lindberg

21. Why is a change made from one to the other… Cost vs. Performance & Value • Where can the manufacturer get the biggest bang for the buck… • Rep or Direct… Scott Lindberg

22. Best Practices… • Train the factory folks • % spending on people • Investment developing new customers • Investment for new business • Marketing programs • Some day it rains… • Good years & Bad years • Examples of how synergistic lines give you access to sell their product Scott Lindberg

23. Workshop Training your factories • What are you doing today to train your principals about the rep business? • Who, What, When…. • If you don’t train today, what ways could you train your principals? • Who, What, When…. Scott Lindberg

24. What Manufacturers want in a Rep…

25. Manufacturers are all created… • Differently • Different Personalities • Different Knowledge • Of their business • Of the Rep business • The “Professional Field Sales” function • Different Focus Scott Lindberg

26. What Manufacturers want in a Rep… A Rep firm who… • Can increase our sales • Can get us into new customers or programs • Has relationships with key folks in the territory • Walks the talk. • Sales • Reports Scott Lindberg

27. What Manufacturers want in a Rep… A Rep firm who… • We hear from regularly • Great Communicator • Knows our people • CEO • National Sales Manager • Inside Sales • Product Marketing • Quality • Knows our competition • Not too well of course.. Scott Lindberg

28. What Manufacturers want in a Rep… A Rep firm who… • Sells the factory • Be a customer advocate • Be an “employee” of the principal • Knows our products & capabilities • Has a professional organization • Doesn’t Whine • Are people we like… Scott Lindberg

29. What Manufacturers want in a Rep… • Sales performance • Sales volume • Sales growth • Market share • TAM & SAM • Number of new customers • Monitor your sales • Do your employees know the answer and what they can share? Scott Lindberg

30. What Manufacturers want in a Rep… • Synergistic Lines • Why is this important to the rep? • Sell multiple products to the same customer on the same call • Why is this important to the manufacturer? • Sell multiple products to the same customer on the same call • How do you promote synergy? • When it works, tell someone… Scott Lindberg

31. What Manufacturers want in a Rep… Professional Organization • Offices/Locations • Structure & Systems • Sales personal • Good Inside and Good Outside • Pay structure • Do you want to share? • Territory Management • Tag Team… Scott Lindberg

32. Looking at the Rep Business...From the other side

33. As a rep… • We were good… • “Should” have won every line we interviewed for… • Manufactures had all sorts of issues… • Unreasonable expectations about sales, commissions, reports, people… Scott Lindberg

34. Workshop In your view • What are the 5 best things about what your rep firm brings. 5 best traits or strengths… • What do you think your principal sees as your 5 best traits or strengths… • What do see as your 5 most glaring weaknesses....things you wished or knew you should or could do better…    • What do you think your principal sees as your 5 most significant weaknesses Scott Lindberg

35. As a rep… • We were good… • “Should” have won every line we interviewed for… • Manufactures had all sorts of issues… • Unreasonable expectations about sales, commissions, reports, people… Scott Lindberg

36. When we look at ourselves… • We see the positives • If we didn’t, we would change it… • We can’t imagine why anyone wouldn’t give us their line… • We are often surprised when a factory decides to make a change… Scott Lindberg

37. As a manufacturer,looking back… • We were still good… • “Should” have won more lines than we did… • Question why we didn’t win. • In general, Reps have lots of room for improvement… • We know manufacturers do… • Rep Bashing 101… Scott Lindberg

38. Looking at reps from the factory side… • Reps are to busy, with much to much to do.....to many lines, and not enough time to take care of all of their needs… • Many Reps have little product knowledge. Embarrass themselves with the customer or factory. Scott Lindberg

39. Looking at reps from the factory side… • Lack of follow-up skills. Always need reminders. • Samples, Quotes, Orders, etc. • Limited closing skills • Surprising since this is really a reps main job… • Practically no principal empathy • Usually the manufactures fault • Always taking the side of the customer • The rep is an extension of the factory Scott Lindberg

40. Looking at reps from the factory side… • Making sales calls to the wrong people • Need to see the decision makers and investing in “relationships“ • Price is the reason for the loss of business and not poor relationships. Scott Lindberg

41. Looking at reps from the factory side… • When the factory signs the check do they question the value received? • Did they earn the money? • Many cases, the answer is "no.“ • Do you feel good when you are signing the checks? • No business plan or goals • For the day, week, month, year, five year plan… • No plan = no growth, and no long term success Scott Lindberg

42. Looking at reps from the factory side… • Reps often don't make the principal feel "important.“ • No matter what the size of the line • Principals want/need to feel a that you are looking after our mutual success and growth. Scott Lindberg

43. How many Reps are there? (The Good, the Bad & the Ugly…)

44. Outstanding Reps… • Do what the good reps do plus… • Marketing • Newsletters, promotions, training… • Monitor Competition • Feedback to factory competitive info • Factory Visits • Rep Councils • Continuous Improvement Scott Lindberg

45. The Good Rep… • Good Reps… • Contact the factory because they have made something happen.. • Have action items • Know key programs/opportunities • Accurate Reporting, On time • Relationships at All Levels • Makes lots of Commissions • Communicates commission errors • Good or Bad Scott Lindberg

46. The Middle of road Rep… • What the Middle rep does… • Does enough to get by… • If you ask, they will do… • Stays out of trouble and keeps a low profile • Don’t have a relationship with all the players • Might be embarrassed to call… • Doesn’t know the products that well Scott Lindberg

47. Reps worst enemy… • The Bad Rep… • Gives all reps a bad rap… • Coupon Clippers • Maybe a little unethical • Unprofessional • To many lines • To much whining • You never hear from them • Poor Communicators • They are in every territory and in every industry… Scott Lindberg

48. The Bad Rep… • What the bad rep does… • Nice to meet you… • The front door used to be on this side... • Oh, so you’re local… • Sorry, wrong line card… • Let’s meet around 10:30 and you can be on your way after lunch… • Others?? Scott Lindberg

49. You could be all three… • Good or Outstanding Rep • Do you have lines that think you are the best rep they have • Middle of the Road • How many lines have to call you to get action? • Ugly • If we were honest… Scott Lindberg

50. Understanding the Manufacturer