The Industry's reps have a busy time ahead.
With changes coming fast and furious in the electrical business in recent years, all of us find ourselves scrambling to keep up. Every change presents a conundrum. Is this event a fluke or a precursor? Will it affect my business today and/or tomorrow? If so, how? How should I react? What path should I follow to make sure I'm not always reacting?
It occurs to me, watching the machinations and strategies of electrical manufacturers and distributors as they create and respond to change--and alter the fabric of the industry in the process--that the player truly on the hot seat is the independent manufacturers' rep.
The rep performs a variety of vital services that enable the product to make its journey from the maker to the end user. These services are determined primarily by the needs and demands of the manufacturers to whom he's under contract, as well as by those of the distributors and end users on whom he calls, and each demands a different bundle of services. Some of those services are getting pretty sophisticated. Some are leading reps far afield from the job description that initially attracted them into the rep business in the first place.
I have seen numerous rep firms struggling with the questions of what to be and what to offer. Now the National Electrical Manufacturers Representatives Association (NEMRA), Armonk, N.Y., has stepped forward with a document that points the way to an answer. An association-commissioned study on the effects of change on its members will be a focal point of the group's annual meeting this month in Philadelphia. Called "Assessing the Rep Function," it looks at the present and future role of the rep. It is an important report that should be studied by independent representatives, manufacturers and distributors alike for its assessment of the path this segment of the industry is taking. Prepared by The PresentFutures Group, Denver, Colo., it is vital, first, because it defines the services reps provide and the activities they must perform (all 42 of them) in order to furnish those services. Second it describes the (considerable) level of professionalism to which reps must rise to meet manufacturers' expectations ahead. The bar has been set, and it's pretty darn high.
In one section of the report that gives an analysis of the rep of the future, you will find these conclusions to grapple with: According to the study, the rep of the future will likely move from local-territory-based responsibilities to product and/or technical specialization--perhaps even account-specific--over a broader regional or national territory.
He will probably need to carry fewer, non-competing lines or take on an entire product package from one manufacturer. He will probably form strategic alliances with other rep firms to fully serve a particular manufacturer.
He must adapt to serving alternate channels of distribution. His ability to provide point-of-sale and other marketing information will become key. He will most likely move out of warehousing. (Some manufacturers will continue to ask reps to warehouse for them, but the rep will need to find creative solutions, such as public warehousing, to accomplish that function.)
He must move from being reactive to proactive. "Those that succeed will excel through innovation, education and training," says the study. The rep will need to find new business opportunities, then adapt to take advantage of them.
The rep of the future will move to performance-based compensation, offering a menu of services with a cost attached to each. Manufacturers will choose exactly what they need from the menu.
Three recurring themes came out of the study: "To be successful in the future, independent manufacturers' representatives in the electrical industry need to automate/computerize, become professional marketing organizations and educate/train their staff."
Being a rep is no longer just a matter of a talent for sales, a grasp of technical product information and a need for independence. The level of professionalism that will be--in fact, is already being--demanded means the independent manufacturers' representative must turn into an entirely different type of service organization. Anyone interested in remaining a rep--or in dealing with one--would do well to study this NEMRA-sponsored report.