Incoming AIM/R president talks about what lies ahead

BY MARY JO MARTIN
Editorial director

It’s no secret that I’ve always been incredibly impressed by the AIM/R organization. This group just seems to “get it.” They take education, networking, volunteer leadership and conference participation to a whole new level. They’re also extremely innovative in designing programs and conference activities that will provide great value to members.

AIM/R’s Annual Management Conference is coming up soon — October 10-14 at the SanDestin Resort in Destin, Fla. It promises to be a spectacular event. Ken McGregor, principal of McGregor & Associates in West Jordan, Utah, who will take over the AIM/R presidency at the conference, recently sat down with me to talk about his career, what he hopes to accomplish as AIM/R president, his view of reps’ role in the channel, and some of the changes to this year’s conference.

MJM: Tell us about your background in the industry and what encouraged you to become a rep?

McGregor: My father was plumbing contractor, so it seems like I’ve been in the business all my life. As many have done, I worked in back of his shop as a kid, and when I was in high school and college, I worked for a plumbing supply house. After getting my business degree at the University of Utah, I was offered a position by a local rep, and wound up working for him for 18 years before buying the agency. I spent 10 years in Denver, and the last 22 in Salt Lake City.

Today, McGregor & Associates is a combination commission, consignment and buy sell rep. We have 16 lines — 70% are plumbing, 20% are HVAC and the remaining 10% are well water. Currently, we have10 employees, including five in outside sales who cover Utah, Idaho, Wyoming, southern Oregon and eastern Nevada. We built a new office and warehouse about five years ago, and there is also a smaller office facility in Boise, Idaho.

MJM: Do you regularly conduct training programs for your customers?

McGregor: Training is a huge emphasis for us. We built this building with training in mind. In fact, we incorporated all the products we represent into the building so that they are functioning as they would be in normal use. This allows us to bring contractors in and show them how the products work. These include working showers, faucets and steam systems. We also showcase our solid surface wall materials.

Among those we train are wholesaler showroom and counter people, specifiers, designers and engineers. Often, we conduct lunch and learn programs. If we host them here, we have a captive audience. We’ve got all their attention for a set period of time. Our full-service kitchen allows us to cater breakfast, lunch or dinner. Generally, we have something going on every week.

The response among our customers has been very good. They realize that training their people properly is an asset, and they don’t typically have time to do it themselves. We have had as many as 50 contractors at one time for a water heater training school.

We’ve also been certified as service agents for some of our manufacturers, so we can perform after-sales service. We try to be the go-to person for our customers. We stock all their service and component parts for all these products, so if a plumber has a problem with a faucet or water heater, they can call us and one of our people will get the part out to them right away so they can immediately service their customers.

MJM: How has the role of reps in the channel changed during your years in business; can you summarize all of the demands you are required to meet?

McGregor: After 39 years in this business, I’ve seen a lot of things change. When I started out, all you needed was a sales catalog and an order pad. You’d meet with purchasing agent and walk the warehouse with them filling out orders. Now it’s a different world. It’s all computerized. It can be a challenge to get products into a customer’s location. One good thing, however, is that once a product is in their computer system, it typically becomes an automatic re­plenishment.

It’s up to the reps to start the process of pulling new products through to create demand. So when we’re going to be presenting a new product to a distributor, we’ll do our best at the street level to pull that product through.

Demands by manufacturers have changed. Whereas we used to just send in orders, we are now functioning in many other roles — customer service, trainer, order entry, catalog printer, marketer — and many times with same commission dollars. Our cost breakdowns are the same as distributors and manufacturers. We have warehouses, vehicles, inventory, employee benefits, etc.

You have to be a good time manager to accomplish all of this. One of the things we’ve subscribed to for our sales staff is Telenotes, which has been a big help in streamlining efficiency and productivity.
When all is said and done, this is still a relationship business. We have good strong relationships with our customer base and we pride ourselves on customer service. We don’t’ have a recorder on our phones; we have a live person answering our phone. I believe in personal contact and the service that goes with it. It’s critical that someone on our staff is available to help customers immediately.

MJM: So you feel it is the reps’ role to create demand in their territories?

McGregor: It really is. In the old days, wholesalers had sales staff and were experts in their product lines. Reps typically just went out and wrote orders, and serviced the wholesaler needs. Now we reps have to be better partners with our wholesale customers’ sales staff, and become part of their sales team, utilizing our product knowledge, and use it to educate and promote our products.

MJM: What are some of the key relationship-building tools that you use in your business?

McGregor: I think our after market service and follow through has been very important. Let’s say a showroom sells a faucet. If there is any kind of a problem, the showroom doesn’t have to deal with it. Instead, they can send the customer to us, and we’ll take care of it from there. That’s what develops the trust with the showroom and city counter people so when they represent and sell our products they know we back them up.

MJM: The current status of the economy — and especially when it comes to the home building and construction market — has affected all channel partners. In particular, can you describe the impact it is having on reps, and the strategies that reps are using to successfully navigate these times?

McGregor: It has decimated our business. The housing market is down at least 50% from where it was just a few years ago. Seventy percent of our business is plumbing, and with no houses being built, we have to get creative on how we sell and how we manage our money. As I mentioned earlier, our costs are the same as our channel partners. With the economy down, we have to be very good managers of our time and money. Many of our channel partners and fellow reps have been forced to do lay offs and cut wages or benefits; while some manufacturers have also had to close plants and do lay offs. We’ve been very prudent and were able to maintain our staff, something I’m very grateful for. We analyze and manage our lines every year so we look at what is profitable and what is not, and sometimes we have to make changes as to what will work with us.

MJM: Besides the economy, what are some of the major challenges today for a manufacturers’ rep firm?

McGregor: Running a business today with the economy and other issues is a challenge to begin with. This is probably as hard as it’s ever been, and we have to be very astute business people.

Manufacturers are still expecting reps to sell their products. They want the feet on the street. It would be very difficult for a one-man rep agency to get a major line today. We have to handle sales, specifications, training, warehousing, commercial quotes, order entry, etc. And that takes people and money. We have to do a better job communicating this to our manufacturers so they truly understand our value.

I’ve been a member of AIM/R since 1998, and they have been such a help, because their educational programs give us the opportunity to learn new ways to be better businesspeople. We’ve come across many techniques that have helped us improve the way we run our business.

MJM: What interested you initially in pursuing a seat on AIM/R’s board?

McGregor: I had learned a lot going to their conferences and networking. The fellowship has been tremendous. Bill Godwin, a fellow rep and former AIM/R president, actually came to me and suggested that I should consider being on the board. He told me more about what was involved and I felt it was time for a payback. This industry has been very good to me, and I wanted to give back. After my first three-year term as director, I started going through the chairs. I was also offered a position this spring as a director on MANA’s board. MANA is the association that manages AIM/R as well as some other national associations.

MJM: What have been some of AIM/R’s recent major accomplishments when it comes to member benefits?

McGregor: One of most high profile was the creation of the LOT [Leaders of Tomorrow] group. This has been a great addition. It’s been four years in process. LOT actually started with a small group of young people who got together at one of our conferences; now it’s a formal group with a membership of about 50 people and with some of their own activities. These people are the future of our business. They’ve got younger ideas and new energy — and its important that they build relationships with each other that will help them in the long term.

AIM/R also has partnerships with MANA and MRERF, which is offering CPMR [Certified Professional Manufacturers Representative] and CSP [Certified Sales Professional] classes. These are opportunities that are invaluable to today’s rep. Educating oneself is primary; you’re really cheating yourself if you’re not taking advantage of these programs. I encourage my fellow reps to really consider going through the CPMR program. I’ve been pleased to see that manufacturers are also now recognizing some of these accreditations. Elkay, Bradford White and American Standard are going to require the CPMR for principals and the CSP for salespeople.

We also created a Manufacturers Advisory Council, hosting these meetings during the ASA Convention every year. This is a combination group of reps and manufacturers. Everyone is very candid on their likes and dislikes and what we can all be doing better. Then those on the committee present what is discussed to the AIM/R membership.

The education opportunities for reps today are tremendous. Any rep that is not a member of AIM/R and not taking advantage of their offerings — including the Conference —is short changing themselves.

MJM: What are your goals as president, and what are some of the key issues/initiatives being tackled this year?

McGregor: One of my goals is to get AIM/R to reach out and embrace non-member reps, and to encourage them to attend the Conference and get involved. We’re expanding member benefits,
education, training, conference agenda, communications to members, and changed our mode of operation. In our last meeting, we adopted a new motto: “Where Rep Professionals Come to Succeed.” This is going to be an integrated part of our marketing program. We want to try to show that we are a value-added proposition for our customers and manufacturers. We want to be out there in the industry regularly promoting what AIM/R is doing to strengthen its members.

MJM: This year, you moved the conference from its traditional spring time frame to the fall. What was behind that decision, and how has the response been from members?

McGregor: We changed it because we were running into all kinds of conflicts in the spring with trade shows and buying groups, national sales meetings, distributor meetings and more. So it had become tougher for members to be able to attend our Conference. Plus it was a stretch financially having all those expenses in such a short period of time. We wanted to eliminate that conflict. So we decided to move the Conference to October, which eliminates most of the conflicts. In the fall, the meetings are over, we think the economy should be picking up even more, and people will be more apt to attend. Another plus is that we were able to negotiate great rates for rooms, and the airport is just 15 minutes away.

MJM: Will manufacturers again have a limited presence at the Conference?

McGregor: For the fourth year, our associate members have been invited to attend the first day and get involved in breakout sessions where we talk about key subjects. Then we all will get together at end of day to present the ideas shared from these breakout sessions to the full group. We also host a nice reception at the end of day. This gives them a chance to see how we operate and run our conference. The response has really been great; in fact, some have told us they want us to be here every year.

MJM: Are there going to be any changes to the typical agenda or program structure?

McGregor: We brought back the golf tournament as part of the conference. We’ve also developed a new breakout session called Rep Café. The entire conference membership will break into pre-determined groups by size and throw anything on table with any issues they’ve got with manufacturers, customers and employees. It will be a great opportunity to get a lot of conversation and feedback going. This is designed to get everyone involved in discussing the pros and cons of situations and challenges. The board of directors will monitor the discussions and then provide highlights in an all-group session at the end of the day.

And of course, as in years past, we’ll have our regular breakout sessions, the Dine Around and the Town Hall Meeting.

MJM: What would you say to a rep who may not yet be a member as to the benefits you’ve realized?

McGregor: The biggest thing we have to offer are educational opportunities, the tremendous networking, learning from each other about strategies for all facets of operations and running your business, from taxes to insurance plans, commissions programs, and being a buy/sell rep.

We’re really promoting getting new people to come to our Conference. If a new conference attendee doesn’t feel they got their money’s worth, we will refund 100% of their money. We’re now advertising this and it’s part of our marketing program. If an existing member brings a new member into the association, they receive a discount on dues for the next year. We believe these financial incentives will really help drive new membership.

MJM: Can you share some information about the management of AIM/R and where that stands now?

McGregor: The board of directors itself is one of the strongest boards we’ve had in years. The passion among these guys is unbelievable, and everyone has put forward such great ideas.

AIM/R has a new, reengaged relationship with MANA. Doug Bower is our executive director, and he really wants to help us promote and expand our association. There are a number of good ideas on the table, including perhaps running some co-conferences with other groups or partnering with ASA on some things. Anything can happen, but nothing has yet been decided.

MJM: Profitability is always a concern for all channel partners. What do you see as necessary to ensure fair profit for all involved?

McGregor: First, you have to have an open and honest relationship with your manufacturer principals. If our manufacturers can really understand our businesses and know that we can’t operate on restricted commission structures, we’ve found they are more willing to work with us.

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?

McGregor: There are changes going on all the time. There is firmly a place for reps in the marketplace. Our role has changed dramatically over the years, and we have to continue to develop with the market. The Internet has changed the way business is done dramatically, reps and manufacturers must embrace some of the new Internet tools and marketing opportunities. There is always going to be a demand for the professional outsourced salesperson.

For additional information, visit www.aimr.net or www.mcgregor-assoc.com.