Managing Sales Representatives in the Semiconductor Equipment and Materials Industry, Part 2

by  John C. Housley

Let us presume that up to now, you as a semiconductor equipment or material supplier company, have done everything right to choose, motivate, train and work with your designated rep for a particular territory. The rep is now beating the bushes in the territory to get your product installed, right?

What many of us fail to realize is that at this point, this rep and his/her employees are investing in your firm. The work in a territory that is not yet mature is known as "prospecting and mining. "The rep doesn't get paid for "prospecting and mining" . . . only for completed sales. The time and expenses to land that all important first sale is pure direct investment on the part of the rep. If this "prospecting and mining" does not go well at first, or if the principle fails to support the rep early on, the rep company is likely to drop the effort or scale it back quickly.

This presents another problem for the principle. How can a principle tell that the rep has lost confidence or interest in their product? If the rep is tricky, they can hide this "slow down" very well. The rep may think to himself, "I can't afford to spend any more time on this line, but I don't want to lose it in case an order comes into the territory." 'Therefore, a significant amount of time (and lost sales) can pass under the bridge before the principle wakes up to the problem.

To recognize a rep "slow down" on their line, the principle looks for several warning signals:

• Much slower to return phone calls and requests.
• Continual excuses why they cannot attend sales meetings or training classes.
• Few, if any, new evaluation orders.
• Re-assigning the current "hot salesperson" from your line and assigning you a less productive salesperson.
• Seems to have lost their taste for hard negotiation with you, the principle. Anything is O.K.

When a principle realizes that the effort is softening on the part of the rep, several options are available:

• Realize that the rep was ready and able to serve the territory, but the principle let them down early in the relationship. In this case, the principle must talk directly and openly to the rep, admit the shortcomings and look for a second shot. Since the rep has already invested time, money and training in the principle, they will most likely be glad to take a second look at the situation.
• Also, the principle must clearly state that he/she realizes that there has been a slowdown of effort on the rep's part. Use examples of other successful territories to show the rep that the product is a winner when successfully introduced and supported. The principle must be willing to open up their books and share confidential information with the rep to regain their confidence.
• Realize that the rep relationship is so damaged that it can never be restored to a profitable level. (See, Take a new route)
• Realize that this rep is never going to have the relationships or ability to do justice to your line (See, Take a new route)
• Recognize that neither the product nor your company will ever give the proper support and backing to make rep territories successful
  (You, take a new route or position)
• Recognize that this particular product will take the kind of "prospecting and mining" effort that cannot be reasonably done by a rep. In this case, the job must be done by company direct sales and application staff. Say good-bye to the rep and install the direct sales office.

In Part 3 you will find: take a new route, when is the right or wrong time to "go direct," and your common mistakes that drive reps nuts.

‹‹ John C. Housley [About the Author]