The Sales Rep Dilemma: Part II
GDA Staff -- Gifts and Dec, 3/31/2011 4:11:51 AM
At the GHTA conference in November 2010, industry consultant randy Eller asked the assembly: "can the evolving gift industry come together to redesign the role of the sales representative?" on behalf of the GHTA, gifts & decorative accessories brought the discussion into its January issue, which resulted in the following response to randy Eller's points:
We read with interest your article regarding the evolving nature of the gift business and how this is impacting the rep/rep showroom model.
We respect Randy's wisdom and experience, but why is there a vital industry need to "ensure the continued, long term health of sales agencies?" Nobody is ensuring the long term health of margins out of China (see one of Randy's recent articles), or the long term health of regional wholesale tradeshows or printed trade magazines, or even the long term health of "the gift business" as it is currently understood.
There are intelligent, cost-effective alternatives to rep networks. We are living proof and growing, with our best years ahead of us. It would be refreshing - not to mention transparent and healthy - for gift media and gift thought leaders to start talking about models that are working, rather than focus on paradigms from the past.
We have thousands of buyers. A sizable chunk do not have time for reps (as per what they tell us), do not care if there is a rep (ditto) or just prefer to do business a different way (like Web surfing and order placement after dinner on Wednesday, etc).
Quite frankly, we really don't think manufacturers/wholesalers and reps are in charge of where the industry is headed. Top-down thinking is really old school. Buyers are still product and information driven, but the knowledge conduit (and thus value/cost equation of field teams) has changed. Websites, email, social networks, faxes, cheap phone calls, cell phones, etc. have upended the game: the rep model as we know it ran head first into the Netflixing of the gift biz, so to speak, and never really recovered.
Further, the evolution of our culture away from formality, to mostly casual has been eating away at the rep visitation/ showroom appointment model for some time, enhanced by the "plug and play" psyche of today's technology. We welcome the thought that at least some in the industry are admitting the problem. But in admitting the problem, be open to completely new solutions.
Regards,
Ken Kline, CEO
Gary Garrett, Sales Director
VHC Inc. (Bella Taylor, Nancy's
Nook, Lasting Impressions)
Randy Eller Responds:
Dear Mr. Kline and Mr. Garrett,
Gifts & Decorative Accessories is doing our industry a great service by helping promote the discussion of the topic of sales reps. First and foremost, I want to thank you for your willingness to reply to the article and your very informed response.
For the record, I totally agree with all the points in your letter concerning "intelligent, cost effective alternatives to rep networks." The best years are not only ahead for your company but also for the entire industry, as long as we are willing to interact with each other in helping to create business models that celebrate the best of the old economy as well as all of the brilliant ideas of the new economy.
My answer to your question as to why sales rep agencies are vital to the future of the industry is really very simple. The vast majority of fresh, new, creative product ideas introduced to us come from young, start up companies. And, the majority of them either do not have the capital, the expertise or both, to take advantage of the new economy tools which you described. For them, straight commission professional sales reps are a variable cost, therefore the most cost effective sales tool you could possibly have.
In addition, professional sales reps can provide service to you and your customers that no amount of websites, telemarketing programs or any other method of sales can ever replace.
Assuming you have no sales rep in the field, consider the following:
• Who will be going into your customer's stores to inventory the product they received from you on the last order to create a suggested reorder for your customer? No one.
• Who will be your "boots on the ground" to monitor the customer's store to see which of your competitors is making inroads to your space? No one.
• Who will be the eyes of your company in that same store to let you know they are either expanding or cutting back on their store size, so that you can take appropriate action to again protect your shelf space? No one.
• Who will be your eyes in those thousands of stores across the country to alert you of new products, and more importantly, whether or not they are selling off the counter? No one.
• Who will be the #1 advocate for your company as a marketing tool to keep your brands at the forefront of the retailer's mind? No one.
I could go on, but my point is that all of the things you are recommending are vital, and you are 100 percent correct. However, that doesn't mean that all things "old school" should be burned at the stake and seen as unnecessary.
I applaud the way you look to the future with current day vision, but "new school" has a way of being the ultimate "top down" business model, i.e., we are going to feed you what you need to know and we really don't need to be intimately involved with your business at store level.
There were similar arguments in the early to late '90s when the Internet boom first started. Millions of jobs and billions of dollars were lost because people proved that human-to-human interaction remains a vital part of simply staying human ... not a bad thing to practice in an industry that sells products that celebrate the emotions of life.
I think what we are all looking for here is a possible perfect blend of old and new so that customers remain the ones who get to choose how they want to be dealt with.
I talk to many retailers too and I have heard from some as you quoted. I also hear from many who value and understand the significance of having a well trained sales force to augment their other efforts.
Lastly, if you look at the largest companies that have ever existed in this industry, they all had and have sales forces. And, they don't just have thousands of accounts, they have tens of thousands.
The real conversation that GHTA and others are trying to promote is how do we build a new "best of practice" industry, one that appreciates and values all of the success steps in it and ensures their long term viability.
Food for thought ...
Let's all work together to build a better industry!
Randy H. Eller
President
Eller Enterprises LLC
What are your thoughts? Talkback to us on the Web at Giftsanddec.com or email editorialdesk@giftsanddec.com. Look for future articles on this subject throughout the year in the pages of the magazine.
GHTA Connect is a forum of the Gift and Home Trade Assn. For more information, visit www.giftandhome.org or call 877.600.4872.
We would love your feedback!
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