Committed Relationships

Too often a sales rep and a manufacturer will enter an agreement, sign a contract, and then just go about their merry ways. But once the routine of the relationship has been established, there's always the danger of benign neglect setting in. The manufacturer may not really know how the reps are selling its product, and often the reps aren't supported with enough information and sales tools to do the product justice. Like any relationship, the one between a manufacturer and its sales reps needs to be constantly nurtured in order to flourish.

One gift industry company that makes a concerted effort to remain engaged in its relationships with its reps is Wolf Designs, a manufacturer of leather jewelry boxes and desk and travel accessories. The company has developed a program it calls Representative's Advantage, and has been rolling it out to its rep agencies. One such rollout was held during the New York International Gift Fair this past January. We attended the session along with a dozen or so reps who were exhibiting at the Fair.

According to company president Simon Wolf, who led the presentation, Wolf Designs has a special story to get across to its reps, retailers, and consumers. The company was founded in Germany in 1834. Now based in London, England, and Malibu, California, it is run by the fifth generation of the Wolf family. Simon opened the U.S. office in 1988. Wolf Designs now manufactures in China, and produces up to 20,000 jewelry boxes a day. The company has been averaging 70 percent annual growth since 1995, and had "its best year, ever," in 2001, according to Simon, who would not reveal actual sales figures.

The company is committed to protecting the integrity of its brand, which represents products that are "fashionable," "trend setting," and "aspirational." The term aspirational means more affordable merchandise — in the $25 to $50 retail price range — that compares favorably to the quality and look of higher-priced brands such as Louis Vuitton.

Wolf Designs focuses on five types of retailers to market its products. They are jewelry, luggage, home furnishings, stationery, and gift retailers. Within those segments the company defines each retailer as one of the following:

• visionaries (small, but highly influential; not a significant revenue source)
• innovators (bottom line decision makers; good revenue source)
• early majority (pragmatic decision makers; greatest source of revenue and profit)
• late majority (mass market)
• laggards

The company is interested only in upscale retailers who are visionaries, innovators, or early majority, and has set a goal of reaching at least 10 percent of these types of retailers in each market.

The company also protects its retailers by not selling to their competitors. However, it feels comfortable placing its products in, for example, a home furnishings store and a jewelry store located across the street from each other because the interests of a customer shopping for jewelry will be different from the interests of a customer shopping for home accents.

The markup for Wolf Designs products is at least 2.5 times, and the company actively keeps its goods away from discount outlets.

Under its Representatives Advantage (RA) program, Wolf Designs promises to provide its independent sales reps with information such as the total number of retailers in a territory, the total revenue generated by those retailers, and the number of retailers by industry segment and the size of each business. For example, its research has identified 2,231 gift, novelty, and souvenir stores in New York state, with average annual revenue of $431,645 per store. The company can also provide this kind of breakdown by county.

Wolf Designs is always specific when setting goals. Instead of asking a rep to get "a fair share" of a market, it will say: "There are 100 independent gift stores in your territory, and we think that acquiring the top ten is a reasonable goal."

Once those goals are established and the reps fan out to make their presentations to retailers, the company demands that its reps present themselves in a professional manner, including dressing accordingly. The company believes that using formal presentation documents greatly enhances sales, and the RA program provides a number of documents — from catalogs to Power Point slides — that the rep must use when making a presentation to a retailer. It also looks to its reps to provide retailer information by having them ask existing and potential Wolf Designs retailers to complete a Retailer Profile form.

What kind of results can manufacturers expect from such an extensive, hands-on approach to dealing with their reps? At the session we attended there seemed to be an enthusiastic response to the program as reps saw a manufacturer taking a real interest in them and their retail clients.

One of those reps was Ted Goldberg, co-owner of the Drummers/Ivystone Group, based in New York and Downingtown, Pennsylvania. He agreed that presentations like Simon Wolf's "separate the good [manufacturer] from the not-so-good." Goldberg summed it up by saying: "The manner in which they satisfy customer needs and rep sales channels is indicative of how professional they are in building business and brand name."