Top 3 Key Facts
- A representative or agent who is knowledgeable about the technology/products but lacks the motivation to proactively develop the market and its customers will have little to no business impact.
- A clear set of criteria helps identify motivated and high-performing representatives or agents.
- A well-defined agent management process quickly reveals which agents are willing to invest time and resources to achieve common goals.
Use case explanation
In the machine industry, many sales managers collaborate with regional representatives or agents to cover a wide range of global markets. This approach allows a small team to effectively support numerous regions worldwide. Even in markets like China and India, where local facilities and teams exist, representatives or agents are still essential due to the market’s vast size. However, we often find that this collaboration is not satisfactory for either party.
We often encounter the following symptoms:
- The representative/agent maintains a distant relationship with the customer, engaging only reactively by responding to inquiries.
- The representative/agent concentrates solely on the applications or machine types they are familiar with, neglecting all other potential opportunities.
- The representative/agent lacks a structured process or plan for proactively developing customers in the market.
A potential solution is to implement an “agent management process” that clearly defines the collaboration with the representative/agent in each market. This process should address the market’s untapped potential, the needs of the representative/agent, and align with your organization’s current business unit and product strategy.
The agent management process consists of the following phases:
- Initial Cooperation Setup: Jointly define the motives and needs of the representative/agent, sales manager, and organization, and develop a market-specific strategy.
- Quarterly Planning: Analyze market-specific data, set objectives for the upcoming quarter, and agree on mutual investments (time, money, information, etc.) needed to achieve those objectives.
- Operational Collaboration: Work together on specific sales opportunities and projects.
- Proactive Market Development: Implement the agreed-upon measures to actively develop the market and achieve the quarterly objectives (e.g., creating a lead list, hosting event X, training the agent’s employees).
- 3-Month Review: Return to the quarterly planning phase.
- 1-2 Year Review: Reassess the initial cooperation setup and restart the process.
Important questions to answer:
- Do we have the right representative/agent in place? (network, technical understanding, motivation)
- Do we have a structured process in place for collaborating with the representative/agent to develop the market effectively?
- Do we ourselves have the skills to proactively moderate this process and demand commitments and cooperation from the representative/agent?
- Do we have sufficient market data to support targeted and meaningful discussions?
Why so important
The agent management process is crucial because a sales manager cannot be present in every market at all times. Therefore, we need a system to determine if the representative/agent is actively working in our best interest and is highly motivated to develop the market.
Effectively managing the relationship with the local representative/agent ensures that valuable insights gained from close customer interactions are effectively communicated back to your organization as feedback.
Proactive collaboration with the representative/agent is a powerful sales driver, especially when they work with multiple partners offering various products. In this constant competition for their attention and time, being proactive helps ensure your company stands out and remains a priority.
Benefits
- A well-defined structure for day-to-day collaboration with representatives/agents.
- Clear criteria and early indicators to assess whether a representative/agent is suitable for a partnership; while changing the relationship may take up to two years, sometimes a decisive end is better than working with an unmotivated agent.
- Transparency on the representative/agent’s investments and actions between meetings, including efforts to service existing clients and engage new ones.
- Increased order intake and market share in market X.
Conundrum
What makes this use case so difficult and challenging? “How do we find out whether we have the right representative/agent in market X who wants to achieve goals and is willing to invest their time and money in developing their skills?”
Action steps
- Establish clear criteria for identifying a successful representative/agent.
- Identify markets with high untapped potential or a large base of existing customers.
- Evaluate the suitability of representatives/agents in each market, regardless of the length of their partnership with us.
- Replace representatives/agents who no longer align with our goals or standards.
- Implement an agent management process to streamline collaboration and market development.
Our take-aways
- Generally, a sales manager has many representatives/agents (usually 1 representative/agent per regional market). In most cases, however, the main order intake comes from a few representatives/agents who are motivated and committed to their work. While some underperformance may stem from limited market potential, it often results from ongoing collaboration with unmotivated representatives/agents. Defined criteria can highlight the need for a decisive change to find a more suitable agent.
- In markets with high potential that is expected to grow, the next development step may involve establishing local resources, particularly when a local aftermarket/service organization is already in place.
- Experienced and highly successful sales managers often have their own agent management processes incorporating many of the elements mentioned above. The real impact on the organization occurs when these best practices are shared and adopted across the entire sales team.
