AIM/R president shares views on reps’ role within the channel
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BY MARY JO MARTIN
Editorial director
Back in the 1970s, native Texan Frank Parks thought he had his future plans pretty well mapped out while attending undergraduate school and the MBA program at Southern Methodist University. However, things don’t always go according to plan -- and Parks wouldn’t have it any other way.
Now principal of Parks-Peyton in Lafayette, La., Parks is also the 2007-2008 president of the Association of Independent Manufacturers Representatives, the leading association for rep firms in the PHCP industry.
An advocate for the importance of representatives in the distribution channel, Parks recently agreed to a candid interview with editorial director Mary Jo Martin.
MJM: What encouraged you to become a manufacturers’ representative, and what led you to this industry?
Parks: I thought I would live in Dallas forever, which is why I got a mba from smu. But after I interviewed with many corporate management training programs, I got cold feet -- it just did not feel right. A friend of mine asked me to help him expand his father’s business into Louisiana from Texas. The funny thing is that my friend could not even explain to me exactly what his father did for a living! Even so, I eventually agreed to give it a try. That was 31 years ago.
MJM: Can you share with us an overview of your agency?
Parks: Parks-Peyton has employed as many as eight people with a warehouse and as few as two without a warehouse. The oil belt’s economy over the last 30+ years has dictated how we have structured our agency. We try to be flexible to best manage and react to changes in our market. Hurricanes Katrina and Rita had something to say about it, too. Right now we have five on staff with a bonded warehouse in Shreveport, La., from which we ship to all parts of Louisiana, Mississippi and Arkansas. In territories such as ours that are made up by a majority of rural areas, it is wise to diversify your line offerings to cover as many bases as possible. We offer shelf, spec, showroom, hvac, commercial and industrial products.
MJM: Do you conduct training programs with your customers? And how do you and your agency stay on top of the latest product developments and trends so that you can share that information with your customers?
Parks: We are firm believers that a rising tide lifts all boats. In this case, we refer to the rising tide of education at every level of the industry. Particularly for us, that means the more knowledge we can impart to everyone at our customers’ locations, the better off all of us are. If it were possible, we would ensure that every warehouse attendant, truck driver, outside salesperson and counter person, as well as inside sales, branch managers and right up to the ceos at headquarters, are familiar with our products. You sell more of what you are familiar with, and everyone at the distributor can have a hand in the sale.
We strongly believe in training programs at our customer locations, however it is always tough to ask the customer for the time it takes to conduct these programs. We will do training anytime a customer is willing to give up his and his employees’ valuable time. As far as keeping up with product developments and industry trends, there is nothing better than a good trade show. Of course, there is nothing worse than a bad trade show.
MJM: What are some of the other key relationship-building tools that you use in your business?
Parks: Technology was never meant to replace personal, face-to-face relationships. But smart businesspeople use technology to enhance their relationships. E-mail, text messages, laptops and digital cameras at jobsites, wifi, aircards -- all of these are tools that should be used to enhance the personal relationship, not replace them. Everyone’s brain works differently, and savvy businesspeople need to understand that some embrace technology while others disdain all things digital! Neither side is totally right or wrong...just different.
MJM: Your territory was one that suffered immense damage during Hurricanes Katrina and Rita. Can you give us an update on how reconstruction is progressing and the depth to which you and your firm have been involved in assisting the rebuilding efforts with your channel partners?
Parks: As far as personally assisting the post-hurricane efforts, how about housing eight people from New Orleans for 10 days after the storm in our 2,200-square-foot home with my wife and son? Sounds like we really went out of our way, but I can assure you my family ended the 10 days considering it a blessing. It was amazing to watch how thankful these people were to have air conditioning, running water and cable tv!
It was also inspiring to see how badly these people wanted to get home and rebuild their lives and their employers’ businesses. I have never seen people work harder for their employers than after Katrina.
I could write forever about post-Katrina conditions in New Orleans, southwest Louisiana and the Mississippi Gulf Coast. I have a tremendous amount of empathy for the people, many who I consider great friends. It would appear that the degree of recovery for each area is in direct correlation to the level of effective leadership from both the political and civic leadership. Stronger sectors have shown solid recovery, primarily because they appear to garner more cooperation from the insurance industry.
We can take pride in many of our industry’s manufacturers who made concessions to distributors in the storm-ravaged territories. Manufacturers helped in the rebuilding not only with expedited shipments, but with also temporary credit terms that helped the area get back on its feet.
That being said, the area still has a long, long way to go to come back to the pre-storm level. The French Quarter is a fraction of what it used to be. The nation would be shocked to see what little has been done to the Lakeview subdivision in New Orleans.
MJM: Describe the major changes that you have witnessed in the industry since you started, and in particular, things that have affected the independent representatives?
Parks: I have been in the industry longer than I’d like to admit and I’ve seen beaucoup changes. I distinctly remember one of my manufacturers suggesting we get something new called a fax machine. We no longer had to handwrite 75 line copper fitting orders! I remember getting orders via the mail -- that seems very hard to believe nowadays. I can remember the emergence of the diys and homecenters, and many manufacturers warning that both plumbing wholesalers and manufacturers’ reps would be eliminated by the big boxes. I can remember one of my customers hauling around something called a cellular phone in his car -- it was about the size of shoe box -- but he swore that someday all of us would have one. Where would we be today without our fax machines and cell phones? It’s hard to imagine the world without them.
I believe the two major changes that have affected independent reps are the shift to foreign manufacturing and the emergence of the buying groups.
MJM: What are some of the major challenges today for a manufacturers’ rep firm?
Parks: The buying groups have changed the independent rep function more than anything else. Thirty years ago, reps’ fate was controlled almost totally by their own efforts within their territory and the relationships they established. It is unfortunate, but inevitable, that today’s reps need to be cognizant of what buying group their target customer is a member of and what vendors are approved by the buying group. Wholesalers appear to be more and more loyal to their buying groups’ vendors (why else would they be members?). Decisions made at buying group headquarters can dramatically affect reps’ ability to sell product -- no matter what their efforts are within their territories.
This leads to another major change in the rep function -- the increased importance and emphasis placed on pull-through sales (that is the effort of the rep to convince the downstream players to use their products). If a rep’s product is seemingly locked out of sales at the wholesaler level because of not being in a buying group, the manufacturer will encourage the rep to call on the home builder, general contractor, plumbing contractor, etc., to try to convince them to request the product at the wholesaler level. The days of reps calling on no one but wholesalers has long since past, and I honestly don’t know whether that is good change or a bad one.
MJM: When did you become a member of AIM/R?
Parks: When I was about six years old, I think! Well, it seems that long. I really can’t remember, but I am guessing about 10 years ago. It seems long only because most of my time in AIM/R has been spent on the board.
MJM: What interested you in pursuing a seat on the board?
Parks: Actually, I was completely caught off guard by a then-board member at my second or third AIM/R conference when he asked if I would consider replacing him when he retired later that year. That was when the board was made up geographically with every segment of the nation represented. I was relatively naïve to what being on the board meant, but I told them that as long as I could have time to gradually learn “on the job” I would do it. The board took me seriously and I have been gradually learning for about seven years now! It has turned into an honor and a labor of love, of course. I am proud to be a member of AIM/R -- I can’t imagine any other group of businesspeople who work harder at becoming more professional.
MJM: What are some of AIM/R major accomplishments during your years of service?
Parks: Without question, I believe it is the enhanced respect given to independent reps as a direct result of the efforts of AIM/R. While we have a long way to go -- and will never stop trying to improve -- we have been approached by manufacturers and wholesalers in recent years to partner with them as never before. When we are asked by manufacturers and wholesalers to work with them and help them accomplish their goals, we realize that we are accomplishing our goal of establishing the independent rep as an asset to be utilized and not an expense to be tolerated. I can’t tell you what it means when trade publications and wholesaler distributors contribute to AIM/R -- it feels good to know we are getting our message across. It is just great to feel support from the industry.
MJM: Describe your goals as president? What are some of the key issues /initiatives being tackled this year?
Parks: I would hope that every AIM/R president has the same goal -- helping to create more awareness of how hard our members strive to become more professional. I don’t need to actually list as a goal striving to make our members more professional because after 10+ years of membership I’ve seen the process in action -- these guys and girls really work at it.
I can remember leaving my first AIM/R conference with two major thoughts:
- First, it was great spending three days with people who were on my side
- Second, feeling so very proud of my profession.
I came away from that first conference with such a good feeling about being a rep and the future it held. I hope that all manufacturers in this industry will highly encourage their reps to join AIM/R. We are encouraged and proud that so many manufacturers have already asked their reps to join. I want to help that trend to continue.
MJM: You have a unique conference coming up in 2008, with manufacturers being included for the first time. How do you think this will benefit both AIM/R and its manufacturer members?
Parks: There has been so much said about manufacturers coming to the conference for the first time that you would think everything about our conference as usual was going to change. My number one goal for this year is simply to not let the conference change just because manufacturers will be attending.
I am a firm believer in partnering -- the rep needs to partner with the manufacturer and the wholesaler, and vice versa. We have to understand that profits grow for all of us when we cooperate, understand each other better and trust one another. What better way for reps to accomplish this than by allowing their partner manufacturers to participate in our conference? We are going to plan our conference in the same way we always have, with programs designed to make us better at what we do for a living.
Having manufacturers attend will give all of us a chance to improve our partnership efforts, work together to discuss and resolve tough issues, get away from the daily grind, spend some down time together and share information among the great talent pool of leading reps and proactive manufacturers.
MJM: How has wholesaler, and to some extent, manufacturer consolidation affected rep firms?
Parks: Of course these things can affect reps, but this is not any different than in other industries. Consolidation is inevitable. Mature companies have mature owners who want to retire and sell. Combining and reducing administrative staffs increase profits. There is no doubt that reps can lose lines when a manufacturer is sold or they can lose business when wholesalers merge, but these are things that reps need to plan for downstream. These are the types of topics that are discussed at our conference.
MJM: Have you gone through the cpmr program? Can you share some of the details of that program and how it is raising the bar among independent representatives?
Parks: I regret to say that I have not. I have heard nothing but good things about cpmr. I believe I was in error many years ago when I should have gone. I felt like I had “served my time” by getting an mba. What I did not realize was how the cpmr program relates so well to what independent reps actually experience. I now look at cpmr as the Rep’s mba -- it is all business courses that teach reps to be “businessmen in sales, not salesmen in business.”
Everyone who has done it has reported it was worth every penny and I hope the function continues to thrive. I am pleased that manufacturers are not only encouraging their reps to support AIM/R but also underwriting some of their efforts to attend cpmr.
MJM: How has it benefited AIM/R to be under the management of mana?
Parks: Mana is a first-class organization and I am pleased that we work together. Having chaired a conference and sat through years on the board, I can’t tell you what a breath of fresh air they have been for AIM/R. It has been an honor getting to work with Joe Miller, Bryan Shirley, Helen Degli-Angeli and Linda McKee. All of them do their jobs very well and, frankly, make AIM/R look as professional as we are! As AIM/R continues to grow, I am sure mana’s presence will be more and more important to our organization.
MJM: Is AIM/R actively recruiting new members? Many of our rep readers may not be members -- is there a message you would like to share with them on what they could gain from membership?
Parks: AIM/R has to keep encouraging reps around the country to join our association. Every organization needs to continually add new blood to persevere. While we always want to find ways to get better at what we do, we don’t want to get complacent and feel like we’ve accomplished our goal. The goal is a moving target and there is nothing like new members to remind us old timers that is the case.
What we really would like is to add members from outside our core. I would love to see more hvac and municipal reps join us. I wish we could keep growing the decorative reps side of our organization. Our jobs are different, but yet the same. It never ceases to amaze me how much you can learn in a networking session from reps who deal in four or five different arenas of our industry.
MJM: Where do you see our traditional distribution model headed in the near future? Will reps continue to play an important role in the channel?
Parks: Thirty years ago we were told the rep function would soon be dead. Twenty years ago there was talk of the elimination of wholesaler distributors due to the Big Boxes. The internet was going to eliminate us all. But here we are in 2007, and the reps and the wholesalers seem to be doing just fine. And, as a matter of fact, so are the Big Box stores. While the world gets more sophisticated and technology speeds up the process, I believe that anyone at any level of the industry who continually gives value to their customers through good products and good service will always survive -- and not only survive but thrive.
The Pie Chart of Success does not have to be finite in size. It can grow larger and larger through all of us being more productive. As the pie gets larger, more and more of us can enjoy success. Have internet sales, Big Box participation, fax machines and computers eliminated traditional jobs in our industry? Or stolen significant business from traditional wholesalers? Or has it just increased the size of the whole pie so more of us can succeed in the industry?
When VCRs became popular and movie rental stores popped up on every street corner, wouldn’t it have made sense to predict the death of movie theaters? Just the opposite happened. Look at the big and beautiful theaters that cover the country now -- and are still being built. The pie just got larger. I believe the same thing is happening in our industry, and there is plenty of room for traditional wholesalers and independent reps who provide good value to their customers.
MJM: Profitability is always a concern for all channel partners. What do you see as necessary to ensure fair profit for all involved?
Parks: Simple. Emphasize partnership and de-emphasize greed. Michael Douglas in the movie Wall Street was wrong -- greed is not good. Capitalism works best when all of us realize a rising tide lifts all boats. Everyone in a business transaction needs to make a profit or the relationship will not endure. The goal is to make a profit -- continually -- over a period of time. The goal is not to make profit once and then start fighting again from scratch. All links in the distribution chain -- manufacturers, independent reps, buying groups, distributors and contractors -- need to partner with each other so that all parties create long-term, trust-driven, profitable relationships. Frankly, each link in the chain needs to care that everyone else is getting what they need.
Trust, partnership and profit. That would be my mantra for successful business relationships.
For more information about AIM/R, call 866/729-0975 or visit www.aimr.net.