Sales agents – How do they measure up?

By Terry Herbert February 13, 2017 Sales Agents

From large operators to niche players, how are sales agents measuring up in today’s burgeoning marketplace? With some minor tuning, the answer seems to be, “really good!” Terry Herbert reports.

To view a PDF of the complete feature as it appeared in NZ Hardware Journal magazine, click the download button at the bottom of this page.

 


WHAT’S WITH SALES AGENTS – IN A NUTSHELL

  • Retailers are increasingly putting the squeeze on suppliers, some of whom are forced to look at alternative business models, including sales agents.
  • Relationships built on respect and experience still mean a lot – even in these times of sophisticated reporting systems and real-time client dashboards.
  • Increasing store numbers are driving sales agents to upscale to cope with the additional coverage being required.
  • A successful sales agent has a strong team that understands sales, promotions and merchandising.
  • That team these days is also required to be increasingly flexible and fast on its feet.

 

Independent sales agents are telling us February is “Projects Month”, when the SKUs skew from gifting items to outdoor projects. And they should know, because their teams are busy selling in and stocking up.

Last February, we were telling you how well those sales agents were doing in 2015. Exactly a year later, we’re very pleased to report that everyone we spoke to had an even better 2016.

 

SQUEEZE MAKES LIFE ABSOLUTELY FABULOUS!

Sounding somewhat incredulous herself, Storelink’s Angie Samuel sums up her year with one word: “Fabulous!”

“We had record month after record month. It’s been a very successful year for us. June was a record month in our history and we exceeded that in July and then had another record month in August.”

Why is Storelink winning a lot more business? “It’s recognised now the value that we bring to our business partners,” says Samuel, adding: “It’s driven largely by the margin squeezes that the retailers are putting on to suppliers.

“We’re the fortunate ones being awarded the business but, at the sharp end, retailers are squeezing more and more. Suppliers are forced to look at alternative business models and that’s where we come in. It’s good news for us.”

For Neville Vujcic of Strikeforce, 2016 was also really good: “Absolutely marvellous!” in fact, he reports, with good growth from the firm’s 15 clients in hardware and some new clients.

“Our business model is working for our clients, most of whom are sizable accounts. They are doing very well which has allowed us to scale up and that’s an advantage to us and our clients.”

Vendor Refill Management’s Derek van der Vossen was equally jubilant: “November 2016 was the biggest month we’ve had in 11 years!”

Part of that success is simply down to numbers, he says: “Bunnings and Mitre 10 have both opened new stores and we’ve taken on new resources to reflect that. We needed more pumps and more hands. We go where our customers, the suppliers, want us to go.”

 

‘FLEXIBILITY’ – THE HEART OF THE BUSINESS MODEL

When it comes to success, size apparently matters. But size at any cost would not be an efficient business model.

Flexibility, adaptability, scalability and speed to market are not platitudes when it comes to the essential modus operandi of the successful sales agent. It’s their life blood.

“If you’re a supplier to hardware retail,” Robert Scott, Operations Manager at Creative Activation, tells us: “It’s all about the ability to scale up or down and speed to market, because it’s so competitive.”

Given his 11 years’ experience in big box home improvement before joining Creative Activation, Scott should know.

“The great thing about CA, and I guess successful sales agents, is the fact that we can adapt to those constant changes quickly. You need to be pre-emptive and adaptive. Plan your contingencies in advance. The weather has an impact.”

So, what if it rains for a week? “You have to be able to change your approach really, really quickly in store. Our sales force has to be quick and nimble.”

Scott explains: “There’s always a core team but we also have a ‘flex team’ available so we can scale up or down quickly, depending on the activity.”

What’s key to success in the DIY home improvement game? “You need a strong team who understand sales, promotions and merchandising. You need A-level expertise in all three. It’s not just product on shelves – you have to understand a planogram and how that slots around promotional or seasonal activity.”

 

THE FULL TIME “PART TIME ARMY”

Having a team ready to scale up and swoop into action seems to be a common link but just how can those staff expect to be paid regularly?

Some agencies keep a core of key account and experienced merchandisers on staff but prefer to pay others on a casual contract basis. Most we learn are “on staff” but typically don’t work a full 40 hour week.

Storelink’s Angie Samuel tells us: “Currently we have 426 merchandisers in the field. As we bring on board new clients we resource accordingly. This is a contract work force and we don’t have any of our contractors who work more than 25 hours a week. That’s our model.”

“Merchandising is a big chunk of what we do,” VRM’s Derek van der Vossen explains. “Typically we do this during the day so we can make sure that the retailers are happy with what we’re doing.

“We also do ‘solutions’ which is around new store set-ups. We have specialist team members that we bring in-store for that. We’ve got 30 in that team and they’re all contractors. They’re part time but, when I say part time, most are up around 25 to 30 hours a week.”

Keeping it simple, Strikeforce’s Neville Vujcic has adopted a slightly different business model: “Unlike most commission sales agents, we don’t use contractors. They’re all full time part time employees. So they’re full time salaried but they work part time. We sell and we manage stock. We don’t do demos.”

 

DIFFERENT STROKES – HARDWARE VS GROCERY

In-store demonstrations are big business in the grocery channel. We’ve all seen the smiley folk with their stalls in supermarkets tempting you with their free samples of wine or cheese, but demos are rather frowned on in hardware.

We hear store managers saying things like: “In-store demos are either too loud, too dangerous or take up too much space. That’s what the on-shelf videos, advertised weekend workshops or Ladies Nights are for. It’s a more focused environment.”

“Our brand is well respected throughout the country and our sales agent needs to be respected too because they represent our brand”

“We’re not really in hardware anymore, except for Sistema,” Leslie Williams of Topline Marketing tells us. “We’ve had a very good 2016. It’s been positive but we’ve made a planned shift more to grocery. We look after Sistema in grocery too. They’ve got good innovation. We’re doing one off deals in hardware where it’s sales and merchandising. We still present palette deals.”

In case you were asleep in 2016, Brendan Lindsay sold Sistema to US Newell Brands for $660 million proudly explaining: “Sistema is made in New Zealand and it will stay in New Zealand. We only make food and storage boxes - that’s it! Every single person involved keeps their jobs. Nothing changes.”

With 70 staff in total, including her team of contract only merchandisers, Topline’s Leslie Williams says adamantly: “I’ve been assured that our relationship with Sistema won’t change.”

 

THE COST OF LOYALTY

Adaptability is important in a sales agent but so are relationships and loyalty, which are often earned the old fashioned way, by bloody hard work and never letting clients down.

Like the old Billy T joke – “I’m half Maori, half Scots. Half of me wants to go out for a big feed, the other half doesn’t want to pay!” – Stephen Edlin of Central Region Sales tells us: “Clients want me as their exclusive rep but they don’t want to pay for it. I like to say jokingly, a commission agent is someone a company gets when they can’t afford a real sales rep.”

To keep a dedicated sales rep on the road we’re talking about a cost of perhaps $100,000-$140,000 a year after you factor in, salary, car, accommodation, computers etc.

Still, says Stephen Edlin: “It’s a low risk way of having a sales force. I pretty much do everything a sales rep does.”

Edlin’s biggest and longest serving client is Browns Brushware. “I’ve been a Browns agent for 16 years. It’s what I’ve built my business around. Some people call me ‘Mr Brown’ when I walk through the door.”

 

CLIENTS TALK ABOUT THEIR SALES AGENTS

So is a sales agent a “Clayton’s Sales Rep”? Cost is definitely a factor but so is unstinting dependability and motivation to perform.

Browns Brushware’s Murray Brown is quick to concur with Stephen Edlin, who provides all Brown’s sales and merchandising for Taupo South to Wellington and east-west, Gisborne to New Plymouth.

Says Murray Brown: “We had our own reps but converted back to commission sales because the model just didn’t suit us. We value relationships. From time to time we need to adjust that relationship because we want the value and, if it’s there for us, it’s there for agencies too.”

Murray Brown lists the reasons he switched from salaried reps:

  1. “Key account managers do not get any cheaper, year by year.”
  2. “The cost of operating vehicles and the bolt-ons does not get cheaper.”
  3. “Motivation for in-house reps is always a challenge.”

“Part of our contract is that there can be no conflict. Stephen [Edlin] has told us he has other agencies but ours is exclusive to that category. I’m not a fan of blowing smoke up anyone’s rear end but a good communication level is important. Our brand is well respected throughout the country and our sales agents need to be respected too because they represent our brand. We give Stephen our full support.”

Moving from brushware to paint, PPG Channel Manager, Tim Martin, describes VRM (Vendor Refill Management) as “an integral part of our team. Our PPG Territory Managers focus on people and VRM focuses on product.” It’s a division of responsibility that is clearly working for both parties.

“VRM places 100% of the orders and are an active player in all major relays and new store fitouts. They’re an integral partner. With their help we have experienced fantastic sales growth.”

Another VRM client, Kevin Donovan of Sutton Tools, recalls: “Over the years VRM has become a more critical partner to us. We’ve certainly seen an incredible growth trajectory. They’re a no-hassle supplier and Derek communicates very well. I’m always pleased I don’t have the vendor refill issues that others have. We’re very happy with VRM.”

Perhaps the best example of sales agent “trumpet blowing” is Strikeforce’s client Fix-a-tap, whose Sydney-based Sales & Marketing Director, Craig McMillan, says this is another instance where the sales agent is “more than just a merchandising partner”.

Strikeforce has “many strings to their bow”, he says, and partners Fix-a-tap in meetings with key customers to “make sure the communication is strong at the very highest level”.

Such have been the benefits of working with Strikeforce, says Craig McMillan, that 18 months ago Fix-a-tap switched to Strikeforce in Australia too.

“I can’t give a better endorsement than that!” he says, adding: “A lot of retailers lean on [Strikeforce] very heavily outside the norm. They have a real can-do attitude.”

 

BLESS THEM ALL – THE BIG AND THE SMALL

The scale and scope of sales agents varies widely, from sales agencies which resemble small armies like Storelink with 426 merchandisers or master distributors who carry thousands of staff across Australasia, right down to Central Region Sales or the husband and wife team at Hardware Sales Agencies.

Regardless of size, as Agrippa Paint’s Terry Dalton tells us: “It’s all about quality of service. Hardware Sales Agencies’ Dianne Malcolm is a dynamo. We rolled out a lot of new paint product for summer and we’re very happy with the result.

“To us, HSA is an Agrippa Paints brand ambassador covering Taupo North into the hardware channels. Their biggest point of difference is their attention to detail. They go the extra distance by providing the personal touch you see with hardworking owner-operators. HSA is a very big part of Agrippa Paints’ success story.”

 

BACK TO THE FUTURE

Derek van der Vossen and Angie Samuels have both implemented CRM and mobile reporting systems to help them and their clients better understand consumers.

As Creative Activation’s Robert Scott explains: “We have to understand what the relationship is between our client and the chains but equally the end consumer. You get that right and you’ll always win.

“For us the future is real time reporting. It allows clients to understand where you need to put more energy into. But at the end of the day it all gets down to industry experience – that’s critical if you’re playing in hardware.”

And “playing in hardware” continues to be a highly worthwhile occupation, according to Robert Scott: “Right now big box home improvement DIY is the most exciting retail space. It’s retail at its absolute best!” he says.

So, whether you have sophisticated reporting systems, run real-time client dashboards driven off apps or you’re an independent sales agent who keeps ahead of his stores – nothing will beat relationships built on respect and experience.

Be ready for short term gain, but keep your eyes on the long term game and get ready for a fabulous 2017!

 

share this