This presentation contains topics for a manufacturer s representative to consider when evaluating the value that OurSalesRep Inc. can provide to a rep firm, its sales team, suppliers and customers. Virtual Direct Sales and -Specific Sales Representation were developed by OurSalesRep to remove the limitations of current sales models. OurSalesRep s model is optimized to benefit reps, suppliers and customers. OurSalesRep s value to a rep firm is analogous to the value of Multiple Listing Service (MLS) to a Realtor. OurSalesRep Inc. Copyright 2009 All rights reserved 1
A major goal for a rep owner is to utilize all resources at the firm for maximum efficiency and productivity. A key component of that is SALES TIME. OurSalesRep enables a rep owner to maximize the time and efficiency of each sales rep, without the addition of management oversight or burdensome reporting systems. Every sales rep is empowered and motivated to maximize the productivity of his or her time. A sales rep has the ability to focus on fewer accounts in order to service them with more lines. The most onerous time-consumer and asset-waster for manufacturer s reps is commission-tracking. Splits make the task exponentially more difficult. Details at: Management OurSalesRep Inc. Copyright 2009 All rights reserved 2
-Specific Sales Representation Sales Representative: Benefits and Impact -Specific Sales Representatives can provide representation for specific suppliers that have the capability to provide significant value (tactical and strategic) to the sales rep's customers. Sales Reps can provide sales representation at a few, or many, accounts for a hand-picked number of suppliers without the cost of supporting a large NEDA-defined territory, or engaging the entire rep firm. Manufacturer's Rep firms now have 4 viable sales model options that they can utilize 1. Geographical representation, with exclusivity, per the historical rep/supplier contracts. 2. -Specific Sales representation as a registered member of OurSalesRep.com a) Utilize some of the sales reps in the firm to target specific types of customers (i.e.. telecom). b) Utilize all of the reps in the firm to register accounts after an opportunity is uncovered. 3. Limited geographical representation for certain suppliers, i.e. waive exclusivity for a portion of the geography. 4. Hybrid mix of models 1, 2, and 3. OurSalesRep Inc. Copyright 2009 All rights reserved 3
-Specific Sales Representation : Benefits and Impact s registered with OurSalesRep can connect with -Specific Sales Representatives in the network. s can create Virtual Direct Sales to cover its target markets and the strategic customers in those markets. s now have 4 viable sales model options that they can draw upon. 1. Direct Sales utilizing company employees. 2. Manufacturer's Representatives 3. Virtual Direct Sales via OurSalesRep.com registration to connect with -Specific Sales Representatives. 4. Hybrid mix of these models. OurSalesRep Inc. Copyright 2009 All rights reserved 4
OurSalesRep provides reps with the capability to utilize the its Fee-for-Services Schedule (for reference only). s utilize a sales rep s time more effectively if a request for services and I.P. comes at a price. Sales reps who cover large multinational accounts that outsource engineering and production are forced to expend valuable time and effort tracking splits. Utilizing OurSalesRep s network, a sales rep has the ability to establish himself as a Corporate Account Manager at a strategic account, for a specific supplier, or suppliers. That sales rep can recruit other sales reps to serve that customer, on behalf of that supplier, wherever the customer does business around the world. The supplier pays the total commission to the Corporate Account Manager. The funds are redistributed by the Corporate Account Manager per the contracted terms of compensation with the individuals on the team. OurSalesRep Inc. Copyright 2009 All rights reserved 5
NOTE: Some suppliers make unfettered demands on a rep firm to provide extensive and ongoing sales management, product training, marketing, Application Engineering and distributor management. No compensation is given to the manufacture s representative for providing these services. In addition to sales reps, OurSalesRep.com members include Specialists ~ sales managers, distributor managers and FAEs to provide suppliers with experienced professionals in each specialty listed above. The supplier defines the specialty, or specialties, that are required. OurSalesRep selects a person whose experience and qualifications match a supplier s requirements. OurSalesRep makes the connection between the and the Specialist. The supplier selects the Specialist who is best qualified to provide the required services and support. The supplier pays a very cost-effective fee for these capabilities and services. OurSalesRep Inc. Copyright 2009 All rights reserved 6
All rep firms have an identity, i.e. semiconductor rep, electromechanical rep, passives rep, etc. Such stereotypes impose a severe limitation on the value that a rep firm can provide to its customers. Adding the capabilities of OurSalesRep, sales reps can represent lines that have a high value to specific customers, irrespective of the rep firm s established stereotype. With OurSalesRep, rep firms can pursue suppliers that have products and services having the greatest value to key customers and target markets. Rep line cards no longer need to be tactically driven by the availability of suppliers looking for representation. OurSalesRep enables rep firms to represent suppliers that are evaluated and selected on their customer value. Rep line cards will be guided by the needs and requirements of the rep s customers and markets. Rep firms no longer need to have supplier homogeneity across a large geography. OurSalesRep views this shift as adding arrows to the quiver specifically for each and every sales rep. OurSalesRep s goal is that individual sales reps have a full quiver of arrows (lines) that are carefully evaluated and selected for maximum customer impact and benefit, to increast revenue and income. OurSalesRep Inc. Copyright 2009 All rights reserved 7
in the Territory: Account Coverage Every rep firm has customers and areas in its geography that are very inefficient and/or unprofitable to serve. Sales resources are not dedicated to those customers, and those areas, because it is not feasible, economical or prudent. OurSalesRep can provide a sales rep with the critical mass to serve those customers effectively and economically. Sufficient number of lines. Wide range of products and services. s that are selected and suited to the requirements of the customers in that territory. Many small territories can become viable and profitable for a rep firm. Rep firms can provide cost-effective, in-depth sales coverage in those areas. Sales reps can be embedded in these small or remote markets. Sales reps can cost-effectively increase design wins, revenue and income. OurSalesRep Inc. Copyright 2009 All rights reserved 8
within the Territory: Redeployment and EntREPreneurs Rep sales teams can expand by a shrink-and-grow strategy based on the phenomenon of the 80/20 Rule. For an analogy, think of the mechanics of growth used by MLB, NBA, NFL, and NHL for team expansion. Reduce the number of accounts handled by each rep and give him/her more lines to sell where: Revenue and design-wins have strong potential for growth. Sales support, as well as customer service and satisfaction will improve. Add outsourced sales reps to support un-served and under-served accounts, markets or territories. Create EntREPreneurs ~ A sales rep who is employed by a rep firm can represent suppliers within a narrow focus of representation: a few accounts, a small territory or a remote geography. A rep owner can empower all sales reps in the firm to become EntREPreneurs. Individual sales reps can solicit lines for representation at his/her specific accounts or territory. OurSalesRep Inc. Copyright 2009 All rights reserved 9
in the Territory: Lines Since OurSalesRep enables a rep to pursue suppliers to serve the expansive range of products and services required by the accounts, a line card can double, or triple, or _? The line card will not be homogenous across the geography or within the firm. It does not need to be! By the mutual decision of the rep and supplier, some lines are best served by one of these options: 1. Maintaining exclusivity for the geography defined by the supplier s standard contract. 2. Foregoing exclusivity and focusing the firm s resources on customers that: Currently generate the most revenue. Can generate the most profitable revenue. Have the greatest upside potential, short term or long term. Have a technology or product targeted for an expanding market. Example: Green Technology and Alternative Energy Require more sales support than the rep had previously been able, or willing, to provide. OurSalesRep Inc. Copyright 2009 All rights reserved 10
in the Territory: Exclusivity The benefits and drawbacks of exclusivity are in the eye of the beholder. A rep firm must provide sales coverage for the entire geography defined by the contract. Bluebirds sometimes appear. Sales coverage that is provided for many areas and customers can best be described as benign neglect. Management determines that coverage will yield diminishing returns and negative productivity. Covering these customers is not worth the rep s effort within his/her 80/20 account responsibility. Providing coverage and oversight is a dilution of the time and priorities of rep management. Exclusivity: a White Elephant? Definition: A burdensome possession; creating more trouble than it is worth. Origin: White (albino) elephants were regarded as holy in ancient times in Thailand. Keeping a white elephant was a very expensive undertaking, since the owner had to provide the elephant with special food and provide access for people who wanted to worship it. If a Thai King became dissatisfied with a subordinate, he would give him a white elephant. The gift would, in most cases, ruin the recipient. OurSalesRep Inc. Copyright 2009 All rights reserved 11
Sources and Splits: A sales rep receive 80% min of the commission paid by a supplier for revenue generated by that sales rep. OurSalesRep Inc. receives a monthly fee from each of its registered suppliers. OSR receives a percentage (20% max) of the commission paid for billable sales and services by a sales rep. Criteria Monthly registration fees and commission rates are negotiated by OurSalesRep with each supplier. OurSalesRep strives to balance: A supplier s need for reasonable commission rates. A sales reps requirement for fair and motivating compensation. OurSalesRep strives to make the supplier an attractive line for best-in-class sales people to represent. Fee Sharing OurSalesRep Inc. will incentivize any individual who is certifiably responsible for recruiting a supplier. OurSalesRep Inc. Copyright 2009 All rights reserved 12
Balance OurSalesRep structures contracts for the mutual benefit of reps, suppliers AND customers. If contracts are fair and balanced for the rep and supplier, customers receive superior sales support. Fairness OurSalesRep structures contracts with consideration for the aggregate requirements of its sales reps. OurSalesRep extends the supplier s termination rights to the individual sales rep working with that supplier. Integrity A core principal of OurSalesRep Inc. is to construct and execute all contracts with integrity. That principal of integrity extends to all members or OurSalesRep: Sales Reps, s and Specialists. OurSalesRep Inc. Copyright 2009 All rights reserved 13
Economic Stabilization Efficiently increasing the number of lines sold by a rep reduces the economic exposure for that rep firm. Utilizing OurSalesRep, a rep firm can increase the number of its sales reps that are actively and certifiably selling a supplier s product or service. s are less inclined to change their sales model by eliminating that rep firm. Equitable With its negotiating leverage, OurSalesRep may be able to lessen the slope of sliding commission rates. Maximization Currently, individual rep firms negotiate supplier contracts for its specific geography. OurSalesRep has greater leverage with a supplier because of the large number of reps in the network. OurSalesRep has the means to negotiate fair and equitable commission rates and termination clauses. OurSalesRep Inc. Copyright 2009 All rights reserved 14
Commission Rates Stabilize Commission rates have declined precipitously to meet a supplier s aggressive SG&A and cost-of-sales targets. s may be dismissive of the economic challenges facing rep firms in this deteriorating economy. There is a critical shortage of sales resources (rep, direct, disti) to meet the needs of suppliers. s, reps and distributors are unable to make the financial investment to increase their sales forces. Owners of rep firms, utilizing the collective strength of OurSalesRep, can be equal partners at the table with suppliers and industry groups to stem the tide and establish mutually-beneficial cost reduction strategies. Increase The collective strength and reach of OurSalesRep and its members creates a powerful pulpit (network) from which reps can communicate and collaborate with suppliers. OurSalesRep members can create operating communities to work effectively with industry organizations. OurSalesRep Inc. Copyright 2009 All rights reserved 15
of Reps: Improve the! Current termination clauses need to be improved in fairness to the rep (and their customers). 30-day termination clauses are counterproductive, demotivating and punitive to a rep. s use unfair methods to compensate a terminated rep firm ~ pay commission on backlog. s are usually reluctant to provide backlog or forecasts beyond 60 days. s are very conservative when placing orders for new programs. MRPs do not provide suppliers with much visibility of its manufacturing requirements. Decrease the frequency of supplier-initiated terminations. s can terminate a specific rep with impunity and be dismissive of the impact on other rep firms. Such suppliers operate counter-productively. OurSalesRep assists reps and suppliers to reach resolution. Networks, such as OurSalesRep, provide reps with collective strength and a powerful communication tool. s are at risk if they operate with impunity against a rep firm that is registered with OurSalesRep. Likewise, reps are at risk if they conduct business outside the integrity standards of OurSalesRep. If necessary, OurSalesRep maintains the right to remove unscrupulous suppliers and reps from the network. OurSalesRep Inc. Copyright 2009 All rights reserved 16
Rep firms and their sales reps can provide significantly greater value to their customers. Reps can orchestrate greater synergy between a customer s needs and the products that he/she represents. The Future Alternative Energy and Green Technology Green Technology, including Alternative Energy, is forecasted to be the most robust growth sector of the electronic and technology markets for the foreseeable future. Many innovative technologies will be developed by small technology-driven companies. Having an effective sales force will be critical to the acceptance of those products, solutions and technologies. An effective sales force is critical to the corporate success and viability of these young firms. The sales reps and Specialists of OurSalesRep can provide Green Technology and Alternative Energy firms with the optimal sales resources enabling them to effectively reach their target markets and customers. OurSalesRep Inc. Copyright 2009 All rights reserved 17