Building a New Rep

Feb. 1, 2000
After 20 years as an independent sales rep, Tom Caulfield is as optimistic about his job as the day he started."It's the best job I ever had. It's the

After 20 years as an independent sales rep, Tom Caulfield is as optimistic about his job as the day he started.

"It's the best job I ever had. It's the most enviable position in the world. If I want to augment my income, I simply make more calls," says Caulfield, who represents more than two dozen lines for M.J. Miller Combined Cos./Tom Caulfield Associates, Indianapolis.

Even more astonishing, he remains unfazed by the far-reaching effects of recent nonstop consolidation, which has virtually rocked almost every facet of the equipment stage - from rate structures, relationships between suppliers and rental companies, and the future of small, independent rental centers.

But Caulfield seems to have nurtured a renewed interest in his role as a rep because of consolidation. "It has made me realize the importance of sales calls more," he says. "Before all this consolidation, oftentimes you didn't have a specific goal in mind, and you were looking at general orders. Now you can't assume you're talking to the decision-maker when you visit a shop. You have to zero in on the right person and find out what he or she wants. And when you find the right person, you're looking to sell a specific product, not a full line."

Reps have always played an integral role in the rental industry. More than just moving products, their job entails following up on product orders and making sure the right equipment arrives on time. Good reps, though they may lack the technical background of some of their manufacturers, make up for it by going to product training sessions and by showing sheer spunk.

"I like to think I'm an expert on everything I sell because I have to demonstrate it," Caulfield says. "It's still a dog and pony show, especially when you're introducing a new product. You have to show a customer how to use it and how to service it. We sell our time and product knowledge. That's all we have to offer. I like to leave a store, knowing the customer is a little more knowledgeable because I came in."

Even after making a sale, a rep's job is not done. When something goes awry with an order, a rep usually gets the first call and promptly relays the problem to the manufacturer. Successful reps keep rental centers happy, and in doing so, they weld tight relationships between manufacturers and rental customers.

A rep's role has not changed, attests Caulfield, even in the midst of consolidation and other influences like the advent of e-commerce. "There's always room for a good sales rep because of a lot of turnover and new people coming on board," he says. "Often rental people don't know much about equipment, so they look to us. Our role is more important now than it has ever been. They need all the help they can get."

Positive thinking, coupled with a relentless will to gain business dollars, adds up to huge profits. Last year, Caulfield's sales were up half a million dollars because he says, "I made myself more effective to consolidators."

His advice? "Take advantage of consolidation and go with the flow. It's a great business. Consolidators are making it more sophisticated and have paved the way for more entrepreneurs. Business goes where it is invited but only stays where it is appreciated."

Silent partner With their commission checks shrinking and their product lines dropping like flies because of ongoing acquisitions, some reps have started eyeing alternative markets like party rentals, government agencies and others, says Jim Woodward of the Woodward Group, Glendora, Calif.

Woodward, whose territory covers California, Nevada, New Mexico and Arizona, balances his line of about 30 manufacturers between heavy equipment rentals and party rentals. "The party rental industry is growing in leaps and bounds, but the equipment side has been flat for reps for several years," says the 12-year veteran. "So we have to find new niches. There are always new markets opening up in our area, like fair associations, churches and informational seminars who all need equipment to maintain their (construction) needs."

Staying afloat in a sea of consolidators means staying focused on the larger rental picture. "Business is so good for manufacturers that some could care less about the rental industry," Woodward says. "So it becomes important for a rep to support the rental industry even though it has gone through so many changes. It's up to the rep to convince manufacturers to go after the rental industry."

Then the more pressing need is to persuade manufacturers not to underestimate the role of independent sales reps. Woodward explains: "You ask if my role has changed? It depends on whom you're representing. My experience has been that some manufacturers reduce the commission we receive or cut us off the loop completely if they get acquired."

"By the same token, there are times when consolidators gobble up stores who have preferred-vendor status and replace all their products. If we're not on that buying group list, we will be out. So it's my job to get my manufacturers on that preferred-buying list."

He underscores their role in this evolving industry. Many reps, he says, are privy to more information about their customers than the manufacturers. "If the customer is ordering from far away, the manufacturer doesn't know them like the reps do. A rep knows who pays the bill or who doesn't," Woodward says. "Nobody knows a state or a territory the way reps do. Many times a rental customer needs a personal touch; they need someone they know."

Good-quality products also help reps survive in the consolidation era. "Rental owners rely on reps to tell them if a product will last," he says. "That's why it's really important for a rep to have tried-and-true products, especially with all the imported products coming in."

Overall, Woodward is confident that reps are not on the path to extinction. "We are becoming increasingly valuable to rental owners because manufacturers cannot go around finding information about their customers because they are so busy. As reps, we are more like silent partners, introducing rental stores to good products at a good price. I still have a lot of work to do."

Making sacrifices When a large corporation bought out one of his biggest lines in 1997 and a few more of his lines let go of their reps, it became crystal clear to Jim Silva that he had to make certain adjustments fast.

"With consolidation, we've been trying to find stuff to fill in the gaps. We've also lost some major lines because they decided to do some direct marketing," said the six-year rep and owner of Silva Sales in Tulare, Calif.

For many reps, filling in the gap means taking on more lines and working for dealers not in the rental business. "We diversify. We sell to other dealers besides rental because if I did rental alone, I couldn't survive," Silva says. "Some reps take on 15 to 20 lines, but that's just too many. I try to keep my lines around 12 and really focus on the major lines to build volume."

As someone in the rep business only six years - he was a former rental center manager - the recent industry shake-ups were definitely a shocker. "It's been a total turnaround. I didn't expect all these changes," Silva says.

Changes such as staying in his RV trailer instead of in a motel when he's on the road, logging in more hours on weekends and getting rid of his pager. "I'm using my cell phone now so my customers can talk to me right away. Many of them are surprised and happy with the quick response," he says.

Like many of his colleagues, Silva admits that they can't do much except to ride things out and hope for the best. "There's probably more reps now than before, but if they continue losing major lines, they are going to have to do something else." Silva says. "But there's definitely still a need for reps out there because they can establish relationships with the customers. I have one company who says they will buy anything I sell because they're happy with my service."

Great expectations It used to be that reps visited a rental center to demonstrate a new piece of machinery, arrange for its delivery, follow up on the order and then go on their way. Nowadays, it is not rare to find reps marketing themselves to stay viable, says Rick Beal of Beal Enterprises, South Pasadena, Calif.

"The biggest change that consolidation brought on was the difference in expectations," he says. "My initial job was to bring a rental store owner and a manufacturer together. My value is to give the store owner someone he can trust and help him determine what to purchase. Now we also have to bring value to some corporate office that we only know vaguely and where some feel they don't need reps."

Some manufacturers, he says, still prefer reps over direct marketing, but have cut their commission rates. Reps who couldn't survive with such low rates were simply let go. To compensate, some reps have diversified their lines or simply taken on more. Beal represents 18 lines covering California, Nevada and Hawaii, but ideally he prefers between 12 to 15 lines. Service, he says, can suffer once a rep takes on more than he can handle. "It could affect the quality of service to the manufacturer, but it's better service for the customer because I offer them more lines," Beal says.

Contrary to popular belief, most reps are faring well, Beal says, but he doesn't discount the fact that they have it tougher now than in the past. "Reps are not in a bad position," he says. "The ones hit hardest are the distributors because larger chains are buying discounts. The future looks good because of the value we bring to the customer and manufacturer. We're still the most economical means of moving product."