What Happens when a Product Rep Loses a Line in a Down Economy?

“Losing anything is an unwelcome surprise, especially in the construction community, where we're struggling to find different ways to manage our time and work,” said Stirling Morris, CSI, CDT.

Morris led the January meeting of CSI’s Product Representation Practice Group. Hear a recording of this meeting. Join the group! It’s free!

Many believe the U.S. is still a year or more away from a recovery in commercial construction, Morris said. Product representatives are losing their jobs, losing sales, and losing parts of their networks as more and more designers are laid off.

Right now, manufacturers are cutting deals that do little more than keep their staff employed, several group members said. Estimators, contractors and project managers are pressing for cut-throat deals as they struggle to keep their own companies afloat.

"There are fewer commercial projects out there, so everyone knows everything out there,” a Dallas rep said. “The competition is fierce, and there's a lot of price undercutting. They're not making money -- they're just keeping the doors open.

“It seems like people swoop in at the last minute with a better deal.”

Generic products that can be bought in bulk are being selected over more unique choices, another added.

Layoffs Changing How Reps Work:

Layoffs are leaving some reps without jobs, and others with huge territories to cover.

A few see opportunities in the misery.

"It's the relationships that you've built over time that are going to pay off,” said a California rep, who was laid off several years ago. "Instead of looking in your own industry, you want to look at other ways to bring in an income. All of us are going to have to think differently about our jobs."

“You could team up. You might take part of an area for a stipend. Many times the company that laid you off needs your services. They just can’t afford to pay you full time. You can contract with them for services.”

Layoffs are also affecting the relationships reps have with some firms. Specifiers and architects with whom a rep has built a relationship over the years are suddenly gone. People with less understanding about a project or product are stepping in, and have little time to get up to speed.

"Because of consolidation, the players are changing,” the Miami rep said. “Because you’re consolidating, the roles of individuals are changing. They're adding responsibility, which means they have more balls in the air."

Manufacturers Gambling On Smaller Workforce:

Manufacturers fail to value the networks their reps have, said one rep. “The manufacturers are companies,” she said. “They're not people. They're not in the valuing relationships business."

Manufacturers are deluding themselves into thinking more information on their websites will cover some of the work. "There are some companies that believe the internet is going to be THE source,” a caller said. “There's a lot of garbage out there that doesn't answer the questions reps take."

Manufacturers also expect an out-of-town rep – whose workload doubled when co-workers were laid off – to easily step in to a territory another rep had built over the years. It’s even harder when the territory is a different construction climate – how a product behaves differs between Vermont and Texas.

One caller described installers who are being pressed into pitching. "They weren’t hired for that reason -- they're not technically proficient, they don't have the relationships. When you send him into an architect’s office, he's a sacrificial lamb."

"Manufacturers are about to find out how valuable their reps’ relationships were," said Nina M. Giglio, CSI, CCS. The designers and specifiers who are still employed are doing more project management than in the past, and need the expertise of good reps.

"(Rep layoffs) definitely hurt our ability to get the information that we need,” she said. "If we can't get the information we need, we move on to the next manufacturer where we can get what we need."

"A lot of these questions are coming out of architect offices because of the reduced staffing. They need a specific answer to a specific question. A lot of manufacturers have cut back on that, and now they're sorry for it."

Morris knows a rep who lost his job with a manufacturer, but saw the value in his construction industry knowledge and network. He got his LEED AP and began working as an independent.

"With his experience and his know-how, he's been able to pick up the ball and run, even though he lost a job,” Morris said.

Suggestions from the group included:

* Independent reps with large, valuable networks can pick up a new product that needs good exposure fast. "These new companies are not affected by the downturn because they don't have any sales to loose. They're able to pick the best reps in the territory,” one caller said. “Keep your eyes open for new opportunities."

* Some reps are evaluating their lines, and cutting back on weak ones to focus on the lines with the most potential.

* Reps who are out of work can form alliances with employed reps to help them cover their suddenly huge territories.

* Make a copy of your contact database NOW – before you loose your job. "Do it now, even if you have to save a hard copy,” the California rep said. “That’s what makes you valuable to a future employer. All you have is your reputation and your Rolodex."

* Telling your contacts at a firm that you have been laid off is a delicate matter, especially if you’re going to start a business of your own. You want to get paid, so you can’t give your advice away for free, and you don’t want to make a bad impression on your future clients or former employers.

Reposted from: http://blog.csinet.org/default.asp?Display=192