Out of change and chaos comes opportunity

Winter 2017 Executive Commentary

Out of change and chaos comes opportunity

by Walter E. Tobin, ERA CEO
e: wtobin@era.org
p: 617-901-4088

It’s time to cut the chains, to turn the page, to forgive and forget, and to recommit to work together as one team, rep and distributor, because it is what the manufacturer wants!

The election is over and now we can begin to go about a more normal daily existence while watching a new president take over the USA. Regardless of what your party affiliation is, at least the election is OVER!

Over the past few weeks, we have seen a major manufacturer eliminate its entire rep network and begin to rely solely on its “to-be-hired” direct sales teams and their channel.

We have also seen a major manufacturer eliminate its entire distribution support team, eliminating the ability for the distributors to do any demand creation, thus reducing the distribution margin to “fulfillment only” in 2017.

Mergers and buyouts continue on the semiconductor side with another major acquisition underway — immediately after this newly acquiring company has just swallowed another semiconductor company.

So what does this all mean to us and what can we do about it?

Frankly, not a lot, other than to continue to work hard to demonstrate our strong value proposition as a manufacturer, rep or distributor. It’s time to strut our stuff! Show ALL how we deliver a strong value proposition to the CUSTOMER on their behalf.

Someone once said, “If you get the customer into your tent, everyone else will follow!”

So how can each one of us work harder or better or smarter to get this done? Perhaps we cannot work any harder. After all, there are only so many hours in the day.

Can we work better? I am not sure. Can we do better territory planning, better pre-call planning, better overall preparation, more calls per day, etc.?

Can we work smarter? How so? Can we take advantage of better productivity tools, software enhancements to our daily lives in note taking to PC transformation, better use of YouTube videos on our websites, etc.?

One way to work smarter is to collaborate better with our new ERA member constituency — distribution.

Oh, I know that we have always been (or supposed to have been) working together — the reps and the distributors — but have we really? We often hear, “We are both competitors to each other! How does that work?” Competitors on a specific socket at a specific customer, for sure. On agreed-to customers and agreed-to sockets, however, we are PARTNERS. Together, we are stronger in front of the customer and in front of our common manufacturers.

It is time for us — reps and distributors — to unite, to stop being lone rangers trying to go it alone at the customer, to show the manufacturer who “has the juice” with the customer.

Who cares who gets the credit when a new design is won or a new order is booked? We WON IT, TOGETHER! Manufacturers should be thrilled that their reps and their distributors are working together, for this is the sales model that they have designed and one that they want to see work!

I know that this is not easy. Each one of us has an example of how someone violated the sacred trust of selling and took an order direct versus putting it through the partnered distributor. OR how a distributor ended up booking the socket in another competing supplier on its line card versus the rep’s line. We carry all of these transgressions around like the books around Jacob Marley’s neck, and we continue to bring them up as the reason why a rep will not work with a distributor or a distributor will not work with a rep.

Guess what? It’s time to cut the chains, to turn the page, to forgive and forget, and to recommit to WORK TOGETHER as one team, rep and distributor, because it is what the manufacturer wants!

All rep commissions and distribution margins come from the manufacturers. We get NO revenue from the customer. It is critical that we keep the manufacturers HAPPY by working hard TOGETHER to mutually hit the sales and marketing goals set out by them.

As Ben Franklin said, “We must, indeed, all hang together or, most assuredly, we shall all hang separately.”

Let’s commit that 2017 is the year of collaboration and create opportunity for our rep company and our distribution company for our common manufacturers out of the chaos that appears on the horizon. We have no other choice. We want to reduce or eliminate any more surprises in 2017!