Electronics Representatives Association’s CEO, Walter Tobin, explains how the manufacturers’ sales rep model is evolving in today’s dynamic digital selling environment.
Manufacturers’ sales representation took shape in the 19th century with the rise of industrialization. Manufacturers needed to reach broader markets, so they hired independent sales agents to drive sales growth. Following World War II, the surge in manufacturing and consumer goods led to increased demand for manufacturers’ sales reps who were assigned specific territories and became experts in their local markets. They built strong client relationships through regular in-person visits.
In the Americas, the model started as a stocking rep model: the rep took customers’ orders and fulfilled them, acting as a distributor for their manufacturers. This meant opening customer accounts, setting credit limits and collecting overdue invoices. However, as electronic components distribution grew from local to regional to national and finally global, the rep model morphed to non-stocking, partnering with the channel to complete order management and supply chain fulfillment. Almost 100 percent of electronic component reps are non-stocking and enjoy great channel partnership.
The early 21st century saw manufacturers’ sales reps utilizing email and cell phones for faster, more effective ways of engaging with and supporting customers and manufacturer partners. E-commerce, online sales tools and CRM systems helped reps get even closer to their customers. As markets globalized, reps began to manage larger territories and more diverse product lines.
Fast forward to today and into the future. The foundation of the rep model continues to be a stable local market presence and focused on customer relationships, but it has evolved into so much more. Modern sales reps use social media, video conferencing and mobile apps to connect with customers and manage their activities. Advanced analytics and AI provide deeper insights into customer behavior and market trends, enabling more targeted and effective sales strategies. Many reps now use continued advancements in AI and automation to further streamline sales processes and enhance predictive analytics. Virtual and augmented reality technologies will provide immersive product demonstrations and virtual capability presentations.
Today’s manufacturers’ reps take advantage of the most current technology and sales skills training available. For example, reps achieving the Certified Professional Manufacturers’ Representative (CPMR) status assures the manufacturers of the most effective representation on their behalf in the marketplace.
The combination of optimizing all available technology, synergistic multi-line product offerings and strong customer relationships translate into customer success. Whether it be in-person or virtually, the manufacturers’ sales rep is seen as adding value to fulfilling a customer’s need.
The benefits of this model for the manufacturer go beyond sales growth and market coverage. As manufacturers’ sales reps typically work on a commission basis, the variable cost of sales compensation allows for a more cost- effective way to go to market. Reps, being residents of their respective sales territories, provide a wealth of information related to customer and market dynamics that assist manufacturers in developing product and technology strategies.