Why Membrane Module Manufacturers should not use Independent Sales Reps

 

In recent years a few of the membrane module manufacturers have been using independent sales representatives which I believe is a bad idea and a case of biting the hand that feeds you. Typically, module manufacturers’ internal salespeople, and I am referring to MF/UF modules here, have directly sold to OEMs/System Integrators as well as marketing to end users and consulting engineers so that their products get specified. I am perfectly OK with that. What I am not OK with is the module manufacturers signing up independent sales reps to sell their products which opens up a can of conflicts. Let me clarify that I am talking about new MF/UF systems and not replacement modules at existing systems. I get that some new module suppliers on the market want to find opportunities ASAP and see independent reps as a way to get directly to engineers and end users rather than have to go through OEMs, but this is going to do more harm than good for the following reasons:

The module manufacturers don’t build the MF/UF systems and won’t be bidding the projects, so they still need OEMs to bid with their modules. The rep may also represent one of the OEMs bidding a project who may or may not want (or be able) to bid a system using that module and that likely will prevent competitor OEMs from bidding with that module. So now there is possible conflict created between the rep, his OEM and the module manufacturer as well as conflict between the module manufacturer and other OEMs. At best you may get the rep’s membrane system OEM bidding with the module, assuming that OEM isn’t a proprietary system supplier (Pall, Suez, Memcor/Dupont) and is willing to bid with the module. You also have to understand the dynamics between reps – the module rep will expect a commission for a sale whether his OEM or a competitor’s OEM wins the job as long as the module is selected. Competing reps that win the job don’t want to see commissions going to their competitor for the membranes and will therefore encourage another membrane to be used. This is a very messy arrangement (and difficult to explain) and is going to steer many reps and OEMs away from using the module.

I understand that the objective of using a rep who may be close to the specifying engineers, is to get the membrane listed in the specs and ideally flat spec’d so all OEMs have to use it. It is a very rare situation where you will get a module flat spec’d so in the case where it is listed with other modules, at best only the module manufacturer rep’s OEM will bid the job with that module. I had a project a few years ago where one such module was listed for a project and our sales rep represented that module as well as another OEM who was also listed for the project (not an ideal situation for an OEM but with all the mergers, etc in the industry you can end up with a rep having two competing OEMs). I called the module manufacturer for a quote and was told “sorry we are teaming with the other OEM on this one, but would love to work with you on another project”….. That is the last time we seriously considered that module and it wasn’t long before we also found a new rep in that region.

Before I get some module manufacturers too angry, I’m not talking about membrane replacements on existing systems where there is no role for the OEM. In that case it can make sense to have a rep involved to get the new replacement module qualified and help with the bidding process. But the reps should not be provided any incentive to push this module on new systems and risk opening the can of conflicts.

So how does a new module manufacturer get to market? Obviously, you have to sell to OEMs with the objective of having as many as possible bid a project to increase the chances of the module being selected by the winning bidder. In parallel you have to go direct to the engineers and end users to get a comfort level with the module and have it put in the specification. This latter point is very important. As an OEM, you have a lot of options (this applies to RO membranes also) and OEMs often don’t have time to market a new product to get it spec’d. There are exceptions when the OEM sees an advantage in bidding the new product, but in this crazy busy world right now, very few have time to pause and find the right opportunity do this up-front missionary work. So that is why some module manufacturers are using reps, right? I get it, and it may help on a specific project if all the stars align but in the long run to maximize sales opportunities it is better for module manufacturers to not use reps. Don’t bite the OEM hand that feeds you!

The comments and opinions in this post are my own and not those of my employer.