ADDING%20VALUE%20-%20BRINGING%20VALUE

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ADDING VALUE - BRINGING VALUE

• A Presentation from
• RD and D Sales Engineering

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Why we're here

• Responding to concerns about reps value
• We know this is a broad policy issue and not
  aimed at us personally.
• This has been and will be a long standing issue
  between reps and factory direct.
• Your concerns about the reps value are
  understandable, but we think misplaced.

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The pressure is on

• Everyone wants to add value
• Everyone wants to reduce cost
• Everyone wants to become more effective,
  efficient and profitable

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Responding to the current challenge

• We have to take requests to deal direct or take
  house accounts seriously
• You have to act in the best interest of your
  company
• Giving in to the request to go direct or take
  house accounts is not in the best interest of
  your company, nor the customers!

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What we all have to do

• Provide a better product
• Bring more value for less cost
• Solve problems, present solutions Communicate how
  what we offer solves the customers problem
• Put the most competent, best motivated
  salespeople on their account

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Serving the customer at their locations

• A cost of doing business, not an option
• How to pay for it is an option -- payroll or
  outsource, i.e. using reps.

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Why you made your decision to use Manufactures
Reps

• Better market penetration
• Solutions selling through product synergies
• Predetermined sales cost that goes up and down
  with sales
• More feet on the street
• No cost until there is a sale

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Should outsiders second-guess your decision?

• You chose reps as your solution to
  cost-effectiveness
• We are not an added cost, but an alternate method
  of field sales compensation
• You chose reps to field more and better
  salespeople, and serve your customers better, at
  less expense

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Dollars and sense reasons for outsourcing field
sales

• You pay only for results, not for effort
• Your costs are predictable, and go up and down
  with sales
• You have no sales expenses during the long
  nurturing process
• You save on overhead - offices, automobiles,
  computers, benefits

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More dollars and sense

• You eliminate the soft costs of administration
  and managing people
• You avoid legal exposures and expenses of
  compliance with local laws and regulations
• You have to train only on product
• You get more feet on the street
• You get more skills and experience

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Your advantages continue

• You get a more stable sales force, who are not
  looking for promotion to another territory or the
  home office
• You get better market intelligence through our
  multiple exposures
• You get better penetration with people and
  departments that a single-product sales force
  might not be calling on

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And thats not all!

• You offer the customer a systems solution, based
  on our knowledge of the other products they need
• You get more product exposures, through more
  people presenting your line

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What the customer loses if you go direct or dont
use Reps
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The customer forfeits

• The efficiency and time savings of a
  multiple-line call
• The established stable relationship with someone
  who already knows both corporate cultures - yours
  and theirs
• The reps ability to bridge inter-departmental
  communications gaps

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More customer benefits

• Our long-term commitment to the territory and to
  them, based on all the products we offer
• Our ability to be more objective in advocating
  for them to you
• Our consultative approach and systems solutions

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They misunderstand the reps function

• We are NOT a channel intermediary adding cost
  without value, we are YOUR sales force, simply
  paid on a different basis
• We do not take possession, nor mark up price
• We are not a barrier to communication, we are a
  facilitator of communication, reaching higher and
  wider in both companies

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Continued

• We are not a distributor and unlike a distributor
  we have no competitive lines!

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Have EDI and the Internet obsoleted us?

• On the contrary, they add to our value,
  handling routine so we are more productive
• EDI facilitates tracking, re-orders for current
  products, but NOT technology introduction
• It cant train customer personnel, help
  negotiate contracts, analyze alternate solutions,
  nor deal with exceptions

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Quote Follow up

• Your volume of quotes is high.
• We have put in place a quote follow up system
  that works!
• While doing follow up it allows us to look at new
  opportunities and revisit lost business.

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Taking a House account

• You dont need a rep, the customer knows us
  and we are getting all their business!

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Think again!

• With out the Reps day to day interface, your
  business there will become a memory.

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Paying the Rep for business that comes to the
factory with out the Reps help

• It Happens !
• This is a win / win. It helps off set the
  business that was a bad cost of sales and lost
  orders.
• It is seed money to pay for the pioneering
  efforts for your company.

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Cutting Commissions

• You works on a profit level of 40 average. When
  you lower your profit by 2 or 3 its just that.
• When ask the rep to split it youre asking the
  rep to give up 2.5 or 3 it is really 50 to
  75!

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Will eliminating the rep eliminate the reps
commission?

• Youll have added cost, not less cost, because of
  higher overhead factors and the need to take on
  soft costs we now assume
• You chose the rep route for economic reasons -
  and you know the economics of your company better
  than the customer does

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Will using direct employees give you more control?

• The important thing is results, not control
• Todays focus on core competencies leads to
  outsourcing
• Our customers outsource many functions for
  best results -- why shouldnt you?
• Most direct sales people are not paid straight
  commission. Lose a order and it probably wont
  effect their income.
• If a rep doesnt get the order he doesnt get
  paid!

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Would direct salesperson have more product
knowledge?

• Products dont exist in a vacuum -- the multiple
  line rep focuses on the product being designed at
  the customer.
• Reps relate the specific need to the factory and
  as a TEAM brings a solutions approach involving
  related products.

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This is not about US

• This is about the value YOU provide, with our
  involvement, to our mutual customer

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You made a good decision to control costs. You
are very profitable and bring value to the
customer by using Reps.
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• Dont Fix Whats Not
• Broken!