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A little help from his friends

Independent reps build relationships

By David Wolff

Bob and Robert McClellandBob McClelland knows all about high mileage, but cutting back is not in his plans.

McClelland has been an independent manufacturer’s rep for more than 35 years. The 68-year-old former national sales manager covers eight Midwestern states selling everything from medium- to small-sized iron to floor polishers and drill bits. And if you think he’s spinning yarns, McClelland points to the odometer of his 2003 Ford Excursion that reads more than 450,000 miles.

“People ask me when I’m going to retire, and I tell them I have no desire to,” he says. “I get paid every day to go visit my friends. It doesn’t get any better than that. I’m into the third generation with many of my customers. I know their grandkids and even call the dog by name. When I walk in the door I don’t try to sell them anything because they know what I handle. I stop by to say hello and see if they are having any problems. If they need something they’ll give me an order.”

McClelland’s territory is North and South Dakota, Minnesota, Kansas, Missouri, Iowa, Nebraska and
southern Illinois. Major product lines serving 850 to 1,000 active accounts include Bartell Morrison, Bosch, Clarke, Dosko, Billy Goat, and IHI. In the last few years, McClelland has taken on expendable lines such as roofing supplies, hardware and paint, which generate another 1,200 semi-active accounts.

“It all boils down to relationships,” McClelland says. “I sell enough products that I’m important to the rental store. The factory guy walks in with one line; I walk in as a problem-solver. A broad product line is also valuable going into towns with 10,000 people or less. I can call on the rental guy, and then stop at the lumberyard, paint store and farm implement shop. That’s where our concept of being a well-rounded, one-stop-shop rep comes into play.”

McClelland ticks off the boilerplate rationale for the manufacturer’s rep – they are extension of the OEM’s sales force; they reduce overhead because employee expense is a significant cost of doing business for the
manufacturer; and the independent rep is close to local markets, therefore able to generate sales that the
manufacturer normally wouldn’t get.

However, from his experience McClelland knows there is much, much more value the rep brings to market. As an independent rep, he does a lot behind the scenes.

IHI compact excavatorsExtend product lines. Half of McClelland’s business comes from about 30 medium- to small-sized equipment companies. The remainder is expendables. He says, “During a recession, customers stop buying equipment, except for parts to keep them running. However, they have to buy expendables. People always need saw blades and drill bits. I know that when times are slow I always have products to keep me in front of the customer.”

Going the extra mile. A few years ago, one of his customer’s stores burned down on a Friday. By Monday he was back in business at 80 percent capacity. “I worked all weekend hauling trailer loads of equipment from St. Louis and Kansas City,” McClelland says. “My customer was working out of a portable trailer without phone lines and had to process credit cards manually, but he was back in business.”

Offer insurance. McClelland is one of a handful of reps listed as a rental executive advisory person (REAP). “I’m licensed through ARA Insurance,” he says. “It’s hard for stores to get rental insurance. They have to hire a REAP advisor and
complete the training, because the first six months is the store’s highest exposure to liability. They’re starting out and the staff is inexperienced and not well-trained. They may load a piece of equipment incorrectly or jackknife a trailer, the equipment falls off and someone gets hurts. That’s when they have a lot of exposure. When we set up a rental store, as long as I do the turnkey, I can guarantee when they open they’ll have insurance. We write the order, deliver the equipment, assemble it, show them how to operate and maintain it. The first week they’re open, I work behind the counter from 8 to 5 for nothing. I’ve got a 40-foot diesel coach motorhome and live in it for a week. Insurance officials tell me that if I do the setup they’ll guarantee the insurance because they know the store has had the proper training and their exposure will be way down.”

Robert and Bob McClellandFather and son team
McClelland was national sales manager for a St. Louis company and had a number of manufacturer reps working for him. He left in 1980 after 16 years and opened his own agency.
“I love the business,” he says. “It’s been very lucrative for me. Rental is one of the few ‘mom-and-pop’
businesses left in this country.”

Last year, he looked back on his career and realized the business had no succession plan. Two other independent reps, Gordon Thompson and Pat Dudek, work for the company, but McClelland wanted to ensure a smooth transition.

“I don’t want manufacturers to be without someone representing their products, or have customers with no one to take care of them,” he says.

His son, Robert, had worked with him since high school, and left his job last August after 23 years as sales manager of a wholesale distributor to join his father.

Bootstrap attitude
A few years ago, national rental companies started buying some of McClelland’s best stores. He was shut out because he was no longer in the big company’s directory of approved vendors. Not one to play the victim card, McClelland shook off this bad fortune and looked for new opportunities. He came in contact with Avant Tecno USA, a Finnish
manufacturer of an articulated compact loader. The machine takes more than 100 attachments, lifts 1,100 pounds 10 feet high, travels 7.5 mph, and weighs 2,200 pounds. At present, McClelland is the only rep in the U.S. representing the machine.

“This loader fits between full-size and mini models, and no one else has it,” he says. “For a new manufacturer in the market like Avant Tecno, partnering with a rep group that’s established like we are, gives them instant credibility. Many times we’ve taken new products into rental stores and they don’t even look at it. They ask us what we think. If we say it’s good and they’ll make some money with it, we’ve got a purchase order. They may not know the factory guy and will be very cautious about new products. But if a rep walks in who they’ve done business with for a long time, and if he’s got enough confidence in the product to take it on, most likely the customer will feel that way, too.”

Ready for takeoff
McClelland says the rental industry is still in its infancy.

He explains, “Rental is growing so dramatically, and with the economy like it is, contractors can’t afford to buy equipment. With prices going up year after year, it’s getting to the point where they can’t afford high-dollar equipment. Rental makes more sense. If you buy a piece of equipment, you’ve got to amortize it. With rental, that’s a 100 percent write-off up front. It’s advantageous, and I think more and more people will look to renting.”

McClelland also thinks more rental stores will follow the model of K & K Supply (see cover story).

“They will carry allied products in conjunction with rental,” he says. “Most independent rental stores just rent equipment and tools; they don’t have clothing or expendables. To survive, more rental stores are going to have to be a one-stop-shop. When a contractor comes in for a saw, he’s got to be able to buy the blades, hearing protection, gas, oil and everything that goes with the job.”

The younger McClelland says slower economic times the last few years have forced rental stores to work harder.

“Foundation and dirt contractors aren’t working as much, so rental stores have to expand their customer base,” Robert explains. “They’ve gone into other markets such as industrial applications with hard floor machines, vacuums and scrubbers. Their business has to revolve around the customer-base and how it changes. This trend will continue over the next few years.”

Originally published in the March/April 2014 issue of Pro Contractor Rentals. Copyright 2014 Direct Business Media.


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