Get the most out of your reps: reps can make both of you a lot of money, but only with good communication.

ONE OF THE most important aspects of my business involves helping companies improve their relationships with their reps. It's no secret that the rep/principal relationship is one of the most rocky in the PCB industry, thanks in part to this industry's tremendous ups and downs and its constant struggles to understand the necessity of sales and marketing.

The rep/principal scenario typically starts off this way: A company decides it needs more sales and wants to leverage its sales budget, so it signs a network of reps. (That in itself is not that easy, but that's for another day and another column.) Often, the reps are signed and then forgotten. After all, management expects that if the reps are really good, the orders will come rolling in at any time.

Soon the quotes do start rolling in, but chances are they are for the wrong products. High-tech military fabricators get double-sided board orders, or flex makers get quotes for rigid boards. Management assumes these particular reps are no good. Even worse, after a series of these failed efforts, management concludes that the rep route just doesn't work after all.

But in reality, any combination of things could have gone wrong. The principal might not have fully explained his company's niche to the reps. The principal may not have communicated with the reps after the initial courtship and signing. He might not have visited the reps in their territory or invited the reps to visit his facility. He may not have given the reps the right tools (paperwork, copies of quotes, orders and invoices) to do their job, and may not even have communicated to his own team that new reps had been hired.

Now let's talk about how to find the best reps for your company. It's imperative you choose the right territory. In what geographic region do you want your business to grow? Why? Will that territory sustain your niche? Next, use your network, the Electronic Representatives Association directory (www.era.org) or a professional trained in finding reps to interview some reps in that region. Develop a profile for your ideal rep firm: a company with expertise in PCBs, a track record of success, an ongoing relationship with target accounts, a solid work ethic, the right number of employees, time available to dedicate to your company, great references and chemistry with your company.

Require that the reps you interview meet or beat these criteria. Don't forget that the reps will be committing a great deal of time and money to selling your products, which translates into sheer investment on their part. It will be months before they see a penny of income, which means that you'll have to really sell a good rep on your company to get his firm to sign up.

On the other hand, what should reps look for in a principal? They will expect your company to have an excellent reputation; solid finances; a clear operating strategy and marketing plan, including marketing in the reps' region(s); and great technical capabilities. Reps don't like house accounts. Treat your reps as partners, support their needs and expect your reps to make a lot of money.

Outline all of this information in a plan that you can present to your prospective reps during the interview process. Once you make your selection, the next step is to sign the rep up, but don't use a boilerplate contract. Write a long-term contract that's fair to your reps, one that compensates them for getting exactly the type of business you desire. If you want to gain more military business, then offer an additional financial incentive for military business. If you want to gain new customers, offer your reps a bonus for signing new customers. And follow this by paying your reps like clockwork. In short, take care of your reps and your reps will take care of you and your business.

So now you have your rep signed up and ready to go. What next? We'll talk about that next time when we discuss how to manage, measure and motivate your reps. Plus, I'll share my secret communication tool for making sure you and your reps are always on the same page. The old adage "You will get out of your reps what you put into them" is as true today as it was 50 years ago. Follow this rule and everything will fall into place.

Have a great holiday season.

DAN BEAULIEU is founding partner in D.B. Management Group (www.dbmpcb.com). He can be reached at 201-873-0793; [e-mail]. His recently published book, Printed Circuit Board Basics, is available from UP Media Group.