00:00
Hi, welcome to Power of the Network. I'm your host, Tim Logger, Vice President of Broadband here at CBM. I'm excited about our guests this week. uh I've gotten the opportunity to meet Mr. John Mitchell. He's a creator of RepFabric. It's a CRM tool that's really developed specifically for manufacturer's rep firms. uh It handles a bunch of kind of the issues that we deal with on a day-to-day basis. So I'm real excited about our conversation. uh Got a lot to dive into, so.
00:28
Let's jump right into our conversation.
00:34
How much do you trust what it does? mean, it's going to make some, that's a great, that's also a great question. if you just, there's got to be some follow up to it and double checking what it's putting out for sure. You know, hopefully it doesn't move a decimal over or something. you realize that these, these models that we're using in generative AI and LLMs, um they kind of have, they have two competing purposes and realize these are commercial companies that are producing these things.
01:04
So they want you in them as much as possible, right? ah So what is purpose number one is hey give you the right answer, right? Give me the right answer to whatever question you ask it purpose number two is let me make you happy right and often number two let me make you happy is the thing that keeps you coming back and engaging with it and When you talk about hallucinations, that's what happens is those competing purposes
01:32
Rather than give you the right answer, let me give you the answer that makes you happy and that's a hallucination. So for now at least, the human in the loop is an essential element. We talked about the order intake and quoting and whatnot. You can't mess those up. That can't be hallucinated because that's real money that's involved. These are banking transactions and people get paid salaries it's a real product that's getting shipped out. and correctly.
01:59
So we always keep a human in the loop on those things to verify that. And that means that a human person double checks the work to make sure it's 100 % correct because even the best AIs are 95, 96%. And that may not be the case forever, but it's certainly the case right now. Everybody always talks about the AI you use today is probably the worst it will ever be. And so it is getting much smarter.
02:27
We talk about it in such general terms. what, I mean, AI is just nothing but a computer somewhere, right? Yeah. What drives it? What's all behind it? I'm not a sharp guy when it comes to computers. I mean, so I can explain it if you let me kind of wax on this for like a minute. it is is a big database. Okay. It's a special kind of database called a vector database.
02:55
And just like you have a database with tables, think of like an Excel sheet and this Excel sheets related to this other Excel sheet. And let's call that a database. Here's my customers, here's my sales. All AI really is, is a big vector database that places words that it's been trained on mainly from the internet to say, you know, think of it like a 3D room, like this kind of room where in the upper right-hand corner, there's the word Apple and then there's bananas.
03:23
and strawberries and fruits kind of in that section. And then there's Apple, the computer company is also kind of related there, but it's sort of a weaker link. And then all of a sudden, when you ask a question, you know, where is it? It basically goes into that database, finds those little areas and says, based on what I've seen in those areas, when I see this part of the room light up, that part of the room light up, and that part of the room light up, usually the next word that follows comes from over there.
03:52
And it's this and this and this and this and this. So when you look at it, it's just a big database. And when you think about what we're doing in our companies, there's lots of companies out there now that are just cataloging part data sheets to create that database. So I need a 220 volt, you know, UL rated 65 IP, whatever. All they're doing is searching the database to find those parts. And that gives you the data sheets that's going to fit that application. So AI is not this magical thing. It just happens to be that
04:21
you know, we've built these databases with really advanced searching and that's all it is. It becomes a word completer as part of that. So, so once you have that, that word completer, you're using that in all these different applications, like write me marketing copy to go send an email to schedule an appointment next Thursday. Right. And so it's trying to predict what those things are. So um that's like the quick,
04:48
the quick nugget on how it uh actually works. Where's the money in it? The money in it? oh Because these will become all encompassing databases that have cataloged every word you've ever said and every word you've ever written and literally like develops the persona of you inside that database. Right. And so they, they will eventually know what you like to listen to in music and what kind of foods you like to eat and so on and so forth as they kind of
05:15
listen and learn and all that information gets database. So it's about your soul. I know it's crazy. Yeah, it's crazy. But I mean, it is, it is something that that's happening now. Right. And yeah. know, the other, the other thing that's amazing is the other part to that. That's pretty amazing is that GPUs, know, like uh you hear about Nvidia running up, which just so happens that vector database comes from vector math. It's the same thing.
05:44
that video gamers have been pushing on for vector polygon playing Grand Theft Auto and NBA basketball and so on and Madden and so on. So for like 35 years, commercially they've been developing these GPUs for video games and we're using those, it happens to work precisely the same way in the math to develop these vector databases. If we didn't have those GPUs and video games, we wouldn't have AI where it's at today. So yeah, it's kind of wild.
06:13
little story there. So if AI kind of moves us towards eliminating tasks and freeing up our time, whether it's for driving deeper into the relationships, et cetera, how does that change uh leadership tactics, day-to-day business with sales folks, et cetera? Where does that all take us? uh
06:43
Right. And uh I think first of all, it's not going to eliminate all tasks. for the tasks that it doesn't eliminate, it's going to make it very easy to sort of measure performance of how well did you do. I mean, there's crazy apps out there. You go make a sales call and it'll score you and publish it on a competitive dashboard like uh two minutes later. uh
07:09
How do you measure performance? Yeah, so we measure performance uh in a variety of different ways because there are uh different motivators behind them. And as a sales leader, one of the items that we see are just, everybody's used to like, hey, what's your funnel? And what are the impact jobs? What are the things you're working on? And ah when was the last time you touched this particular opportunity? That's kind of like the historical stuff.
07:39
But where I think it goes is into the coaching, right? Because all of this AI conversation is very new for everybody and nobody really knows how it all works. And a lot of the coaching is going to be the willingness of your people today to be able to learn these new technologies and start to leverage them for their benefits. Because you're probably not going to get defeated by some all-powerful AI that's going to come eat up every rep business out there. You risk
08:06
falling behind your competitors that know how to use it well. Right. And so we've seen this historically that, you know, we actually call it like uh the technology uh quotient of like how tech savvy is someone. And the good news is about AI is you actually have to be less tech savvy in many cases to use it. The normal like grids and forms like typical apps. um But, but getting your team ready to embrace
08:35
using that new technology has always been something that we've seen in our customers that isn't a given, right? We've got someone who's a good seller and they always make their numbers and they do it their own way that they've been doing it for 25 years. You know, that person who's probably writing in a paper notebook, which is fine and it works for them and they earn their money is great until, you know, an upstart kid comes along with five AI agents that's
09:04
covering four times the territory in the same day, right? And so that's where I think from a managerial perspective that change management's a big deal to manage and you've got to work on it with your team. So as sellers a lot of times it's the squeaky wheel gets the oil and not necessarily the strategic stuff. So as uh rep agency management and owners,
09:31
A lot of us were really good salespeople, but not necessarily trained in the management aspects of salespeople. So what we do in our software is just try to give you those metrics and say, here's how we're doing. And um it's not just sales performance, but it's funnel management and it's everything else that kind of goes along with that. And so anyway, long and short of it is that what you have to establish is a culture of accountability. And that really starts from the top. And where we've seen customers fail,
10:01
uh is where they just refuse to hold their teams accountable to setting goals. So for example, we put in a goals module in our software to say, not just, hey, we want to do $10 million with this manufacturer this year, but we want to make, everybody's got these sort of tribal practices that they have in their firms. hey, I want to make 20 sales calls a week as a goal, as a salesperson. Maybe that's the goal. Or I want to discover five new opportunities, uh meaningful opportunities per week.
10:30
um managing those goals helps to set that accountability and that accountability once you've got those goals in place at the company level can then be cascaded down to individuals so that they know and they're all swimming in the same direction to sort of uh win towards that goal, whether it be a, you know, a forecasted goal that your manufacturer gives you or behavioral goals of, how we go out to market. And so the goals module is a big deal and that's one of the things that we've built into our software. It's kind of,
11:00
based on the entrepreneurial operating system, genome, Wickman, traction, that kind of thing. It's like the data elements. What are those five to 15 numbers that we set at the company level that if I were on a deserted island, I would know that my business is OK because I can just look at those five to 15 numbers. so what a lot of management doesn't do is they don't actually distill to those five to 15 numbers that really matter. And we're trying to coach and teach people to do that. uh
11:29
you know, as a rep firm and as you grow, you know, each territory may not have the same opportunity. Yeah. Where, you know, you move into a new state and you start with a few lines and you don't necessarily have all the core lines that you do, you know, in your other territory. So how do you, how do you, because it certainly can't just be all dollars and cents, you know. How do you vary that equation to someone maybe with less opportunity than another?
11:58
but yet treat them accordingly. mean, you see what I mean? do, absolutely. So I would uh kind of refer back to a situation I had in my own rep agency, right? And that as a salesperson, as a manufacturer's rep, you can only control what you can control. And what you can control is your activity, right? Yeah. And even if you don't have the full strength line card in this territory that's a developmental territory,
12:28
you can very much still control your activity. So rather than necessarily being judged on the numbers, maybe you're judged on that activity, right? What is it we are able to find here within this territory? And, you know, there's, there's far more scientific approaches to that. Like for example, you can look at the population density and figure out, know, for this many people, uh, if, if this territory only has a million people, then we have this much opportunity on these lines. Uh,
12:55
whereas this other territory has 5 million people and we have this much more, it should be kind of somewhat of a correlation. Like there are companies out there that try to make those correlations, which is fine. But as a seller, you still don't really necessarily have the right customers in that territory one by one. So it's never perfect. So what we would coach people towards is just focus on the activity. And maybe there's just not enough there and maybe that's not.
13:23
territory you should be investing in with those lines, right? But with enough activity, you will have smoked out everything that you can find within that territory. And that's how we manage. So my backstory is we had a salesperson who came in that worked within my own territory where we cleaved off a bunch of accounts and said, go work it. But we could never get that critical mass to support two people within my own backyard where I had a lot of the big accounts of the backyard and developmental counts that we
13:52
belief for all intents and purposes were going to grow, and they did, but they just didn't get quite big enough to support that second salesperson. salesperson, he was an absolute beast and was just a super hard worker with tons and tons of activity and a skilled seller. But there's that particular sub market. What is the right number of calls per week for a rep firm? It depends on the nature of the rep firm, right? Like if you're heavy design spec,
14:21
it might be one a day because you're going to go sit with somebody for eight hours and design a new building or design a circuit. um Whereas if you're distribution supply side selling, it might be eight or 10 a day because you can just unscheduled appointments, drop ins, go talk to people. We've even got folks that uh they sell MRO and they just drive to every building, talk to the facilities manager and say, hey, I've got safety gloves, ladders and uh
14:50
you know, uh Janssen materials, which one of these do you want? Let's write an order right here today. So there's no great answer for it. It's just dependent on your specifics.
15:04
CBM is a manufacturer's rep based right here in Kansas City. We've got territory where we cover from Iowa all the way down to Texas. We cover specifically three different market segments, uh utility, commercial industrial, and broadband communications. CBM is structured differently. We're an employee-owned company. We're ran as an ESOP. That allows us to do business differently. We can cross...
15:30
lines of markets, we can put our people where they need to be and really have expertise in the right place. That's what makes a difference for our customers and for our manufacturers. If you think we can help you uh with the product line in the Midwest, look no further than CBM. Find us right here at cbmrep.com.
15:54
That's one thing that we struggle with because there's, mean, obviously you're right, you've got to drive that activity because that's what creates opportunity. But we also, we want it to be quality. A quality call is worth way more than just a 100 % hey, how are you, a drop in or whatever. from a management perspective, sometimes it's a little bit challenged to like, okay, we've got some expectation.
16:23
What should it be? And then how do you, how do you manage that? Yeah, absolutely. So for us, what we've, what we do is um we actually measure customer profitability, right? And I, you know, as, as humans, tend to get into our own, like we got friends that we work with, but that doesn't necessarily means those friends are spending, you know, who are our customers are spending a lot of money with us. Right. And so when I go make it kind of back to the activity, when I go make these sales calls,
16:52
and I make 50 sales calls for $1,000 in business calling on the same customer, that's not efficient. And we know that. furthermore, we even have an expenses module that can measure that. So if you're taking the same contractor out for lunch or whatever, 10 times in a month, but getting $1,000 in orders, also not effective time of that. So you can kind of course correct as you're gathering the data. And that's why it's important to sort of log those things.
17:21
Right? Yeah. Because if anything is a better seller, like if you say, hey, I'm a salesperson at a rep firm and I'm a road warrior, I would want to know how I make more commissions for my company so that I get paid more. And I would prefer the feedback loop of understanding where I'm spending my time. Yeah. So that I'm calling on the right customers. I would further augment that with the capability to do account research, especially with AIs and some of the agents and stuff that we have coming out right now.
17:51
that will go kind of scan the product list of that particular OEM or contractor who's building the next Pendry Hotel and then scan all that information and say, okay, here's their design spec influence, go talk to these people so that you can become the bill of material and the parts list for that project, right? um And so that's again, what are those impact jobs? What are those impact relationships that you need to forge if you don't have them already? That's also another area where I think AI is going to make that research.
18:21
way easier because as sales people, we don't like doing a lot of research. Tell me what to go do. I'll be down the door. Yeah, I'll be down the door and get it done. we need some self. We're not good at being self-directed necessarily. Do you see the younger generation being more successful now than the old? That's another question. I'm an old dog. The AI stuff just blows my mind.
18:50
super quick to, you know, I'll call and ask a buddy that I know knows the answer before I'll get on Google and look something up. oh Sure. And just have it. So I think the power combo is both, right? You've got your relationship focused seller with your, uh let's say, super tech savvy researcher, you know? And often, it's not an age thing at all, right? Like, I don't want to overgeneralize the ages. Because I've seen it where we've got
19:20
a super great detailed in office researcher person who's 60 years old with uh a fearless 28 year old knocking on doors because they don't know any better. you put those combinations in that spark. Now you just created a V8 engine that's going to drive sales for you. Right. One of the things that, that I find challenging, uh you know, as a rep is just the whole marketing piece.
19:46
We can market ourselves so much because obviously we want to attract new lines and new territory and different things. So I understand that, but so much of what we do is on behalf of our manufacturers. So how do we justify or how do we figure out how much money to put into marketing or what do we do?
20:09
That's always just been a challenge for me to get my head around. is like a sort of almost like a religious debate, right? And it's not solved of like even your own website. Do I put my manufacturers on my website or do I not put them on there? And, and manufacturers then go buy a product line or a company that has a soft, you know, a soft conflict with a line that you've had for 30 years, right? Yeah. Happens all the time. And so how do you, how do you manage those things? Um, and, and
20:38
I think it's very situationally specific. I think that there's not always a great answer no matter what. And I think that in general, the only way to support that is through good transparency. And if you think about how costs have shifted over time, in general, these contracts, the original uh rep contracts, at least from uh a
21:06
a manna perspective or from the trade organizations. They came from like the 1960s. They haven't been rewritten since. But if you think about what you're being asked to do for that same 5 % commission is you're being asked to input orders on their behalf and fill out CRM systems and have digital marketing campaigns and have a showroom and have a test kitchen that you're building. You know what I mean? There's tons and tons of these costs.
21:32
that the manufacturers can easily shift and have shifted onto the rep firm without any change in compensation. And so that's where you've got to get more efficient at being able to do those things, or you've got to push back and fight it. And so when I talk about this is almost like a religious debate, the manufacturer is very much going to yeah, they're going to say, well, we just need that to happen, or we just don't want to use reps. And that's the beauty of it, right? It's the variable cost of sale allows you to control.
22:01
you know, if you're able to perform at that level, it's great because everybody wins. yet at COVID, know, manufacturers that had direct sales forces would have wished they had reps during that time. You know, until things in the doldrums of COVID, should say. Going back to the goals, I'm glad you brought that up because, know, we do our uh planning every year. You know, at the end of the year in December, we sit down and kind of recap.
22:30
recap the year, but also set our budget, set our goals for the year. And we try to incorporate specific account-based goals. Everybody's got a list of their top 10 accounts, and here's my goals for this line and this line and this line for XYZ customers. ah And then we always have a mid-year planning in the summertime. This year it's a little early.
22:58
the World Cup soccer coming to Kansas City. So we're gonna do it in May while hotel rooms are still $800 a night. But we'll review those goals, kind of see where we're at and actually trying to do that quarterly now too to just kind of stay on top of it and to talk about it more than once or twice a year. But how would we incorporate those types of things into your system so that it's more of a daily or weekly reminder than just, you know, a
23:26
two, three times a that goals dashboard that I mentioned that cascades down into individual people seeing what their slice of the overall company goal is. That's one way that we do that today. The other is we've actually seen lots and lots of different types of forecast models where some people are just manufacturer specific. As long as I do 8 million bucks next year, they don't care. We don't care where it comes from. Right. Or you might have a uh model where you don't want to forecast every distributor. And then we have that
23:55
manufacturer customer specific forecasting for this manufacturer at this customer, we expect to do this number. The challenge is when you think about the rep business, you get a line card, let's say 20 lines, right? So it's big. And then you've got 2000 customers and you've got this huge grid that you're supposed to be filling out by salesperson. And that's a very tedious problem. So what we ended up doing was creating like basically a rest of the world account where if you don't
24:23
expressly forecast this customer-manufacturer combination, everything else goes into the rest of the world bucket. So you're not forecasting a $300 a year customer. Gotcha. So generalizing. Yeah. we've had to think through that. And the good news is that you're actually forecasting those things, right? Because a lot of folks, um back to the squeaky wheel comment, a lot of times as salespeople, we just kind of
24:49
you know, hey, I got this great plan. I'm going to go see all these customers await. Customers complaining about this product didn't show up or it was damaged. Cancel everything, go over there and address that issue, right? And so that kind of gets thrown out the window and those distractions can really take your eye off the ball of what the greater goal is. So it's great that you guys are forecasting that way. Yeah, no, and it's hard, know, year after year, you kind of see the numbers and you know the trends and
25:15
Maybe we don't know exactly where it's coming from, but it's going to be here somewhere, because we've got enough history to show that. This customer might have had a project and this guy not. So some of that's kind of tough to track when you get down to that granular level. Well, honestly, that's the hardest part in the building and construction market and why most off-the-shelf software doesn't work with it.
25:43
is because you've got just too many tiers of distribution, right? Yeah. You've got the manufacturers producing something, the rep who's helping the manufacturer go to market. You've got a distributor and then you've got contractors, OEMs, architects and engineering firms and so on and so forth, A &D firms. And every one of them has influences on that hole in the ground of that Marriott hotel that's going to get built. And so even though you're quoting your information that the distributor asked you for for your lines,
26:12
They're doing that with everybody else and all the other manufacturers only to find out that that distributor is not going to win that deal. Yeah. And you quoted a million dollars on that deal, but you also quoted four other distributors the same million dollars on that deal. So what's your real funnel? It's not $4 million. It's actually based on the hole in the ground, which is a million dollars if you won the whole thing. Yeah. Right. And so being able to kind of slice and dice those two things, that's our secret sauce for how we do that. Yeah. You know. So. Awesome. Yep. Well, John, I think.
26:41
You know, we probably ought to wrap this up here today. I could continue for another couple hours. So we're going to have to have you on this stuff too and I appreciate being here. Yeah, I'm a little bit, I'm a little upset now that, you know, we're under contract with a different CRM, I've got some, I've got some- special deal for you Yeah, I've got some leeway. We'll be putting some pressure on. You know, I love what you're saying and so much of it just kind of sinks in because it's what I live day to day, you know, but- do too, right? So.
27:10
Appreciate you so much for joining us and thanks for coming in and helping with the training yesterday. I'm honored to be here. You guys are a great agency. I love the creative energy that you guys put into this because it's something that I know your manufacturers reap great benefits from too. well, we appreciate that. So thank you. You bet. All right.
27:34
Just want to say thanks again to John for taking the time to come in and visit with us today. He's a sharp dude. knows what he's talking about. And uh I think he can help you if you've got CRM issues, looking for a good product. I'd certainly reach out to Rep Fabric. Remember, if you're needing help with the project or looking for representation here in the Midwest, look no further than CBM. You can find us right here at cbmrep.com. Give us a like, comment, subscribe. uh
28:03
Give us some feedback if there's something you want to see coming up on future episodes, let us know. Thanks again for joining us on Power of the Network and until next time, we'll see you next time.
