Milestone Terminates All US Manufacturer Reps

When I came from IT to security, it took awhile for me to get used to the idea of rep firms and what they do. Once I eventually got the idea, it seems like a good one for most, if not all, cases. I wonder how much of the decision was the CEO not being used to or possibly understanding rep firms? I know there are rep firms in the IT world, they are just not as prevalent.

Honestly, I can't say that I blame them for this move.

Rep firms *can* be valuable, but their value tends to diminish as the manufacturer themself gains more marketshare and name recognition.

The vast majority of rep firms in the US security market know very little about sales and marketing. They think of themselves as a demand creator, but when you dig in to them you see this doesn't happen.

Most firms will have 1 or 2 "A" lines. These are the products that take up most of their time, and are generally a VMS or camera (or if they're lucky, one of each). In addition to those lines they may have another 5 or 6 B and C lines, usually more specialized or lower volume stuff. Ruggedized swicthes, Ethernet over Coax/Fiber gear, analytics hardware or software, specialized storage devices, and so on.

Obviously, it's in their best interest for a customer to buy as many of their products as possible. So if their VMS company gives them a lead, you can be pretty sure the rep is also going to try to talk about their camera line, their funky storage device, their exclusive line of NFL logo mousepads and so forth.

If you're an up and coming or smaller manufacturer it can be really good to get paired up with a firm that has a very popular A line because you'll get introduced into a lot of new places. Note, IMO, this is not "marketing" or even any real effort on the part of the rep firm. It's them taking advantage of the happy coincidence of someone else (the VMS company in this case) doing the real lead-gen work.

However, if you're a very popular VMS going through rep firms, and you're partnered with a very under-represented camera company, you could end up creating a lot of inadvertant exposure for other camera brands.

When Milestone started signing up reps last year, they most likely considered it more "experiement" than "strategy". Their acquisition (IMO) made it such that they needed to either end that experiment, or else force Canon cameras into the same rep channel. Given Canon's low penetration, that would probably be a tough sell without some very generous incentives.

Milestone is really clinging hard to this "open and independant" line, but I just don't see how that is going to work for them long term.

**Disclaimer I'm a manufacturer rep**

Undisclosed I think you're a little off as to what rep firms (or at least the one I work for) ACTUALLY do. When an integrator is proposing a system to a large end user and they need someone to provide a demonstration of our NVR software who do you think they call? Do you think all integrators have sales people on hand who can provide a good demo of a VMS product to a potential customer? If you do believe that, it is certainly wishful thinking.

As for being a demand creator, yes that is what we do. How many people do you think never heard about ExacqVision or Arecont Vision until I spoke to them? Even though a line is established, there will still be plenty of people who are not overly familiar with the product. Obviously the job of demand creation does not fall solely on the small rep firm, but do we play an integral part in the proliferation of the product in our territory? Absolutely.

Rep firms like the one I work for also have tight relationships with the distribution partners because of the many lines we represent. How often do you think an ADI branch manager or Tri-Ed account exec calls me with a dealer who is unhappy with their current VMS and solicits my expertise in my VMS product to help drive more business to his branch?

How about the integrators that I have close relationships and have helped close deals? I had a guy last week say he had a job spec'd Salient and that he was proposing Exacq because of our relationship. I registered the project for him and got him even further discounting. Even if we do not win that deal, I'm the guy behind the scenes showing the distributors I'm steering business to them and helping integrators spec out and sell jobs. If we only used direct sales people it would be a lot harder for the direct person to give the territory attention the attention it needs. Our rep firm has 7 people from Maine to New england but our big lines have 1 or at most 2 RSM's for that same territory. When the RSM does a week of travel in Boston who is covering New Jersey?

It's no surprise, our top 2 lines have experienced vast growth and many record months since we have been involved. Maybe rep firms didn't work for Milestone, but they do work. Just ask Pelco about their glory days.

When an integrator is proposing a system to a large end user and they need someone to provide a demonstration of our NVR software who do you think they call?

That sounds like the *integrator* created the demand, you showed up to do a demo. At best, the integrator might have found a customer who was interested in a VMS in general, and you manage to sway them to Exacq. Would you have been aware of that opportunity only through your own marketing efforts? Unlikely.

Yes, I'm aware there are surely a few times you manage to bring something new in, but I'd wager the majority of your sales are from opportunities originated elsewhere.

I had a guy last week say he had a job spec'd Salient and that he was proposing Exacq because of our relationship.

Again, sounds like someone else got the lead, and chose to work with you for basic support reasons. That's not a *bad* thing, but it's also not demand generation in the standard sense.

Even if we do not win that deal, I'm the guy behind the scenes showing the distributors I'm steering business to them and helping integrators spec out and sell jobs.

Because without you the integrator would have bought the parts from where, exactly? Probably still the same distributor.

Personally, I believe rep firms are slowly going away. And yes, I used to work for one. For several years as the Pelco rep in the "Glory Days" as a previous poster put it. Before it all tanked :).

There are certainly still some good rep firms out there. And a good rep firm that is on top of their business is a magnificent thing to watch. They will drive business, specifications, relationships and cross sell like there is no tomorrow.

The problem is that those companies are fewer and fewer with far more crappier rep firms now. And those rep firms are far more content to hand off literature and simply be another phone number to call..not go out and drive business. You don't see several of the big boys with reps with a couple having moved away from the model like Avigilon, AXIS, Genetec, Pelco and now Milestone again.

And honestly, I have no idea why Milestone would go with reps in the first place. Having a rep that has a camera line can create attachment rate for you as a VMS/Hardware manufacturer but creates huge channel conflict. If I was the ExacQ guy and wanted to Partner with the Samsung guy on deals and further that relationship but the Samsung rep is ALSO the Milestone rep.... How many deals do you think I am going to swing his way as the ExacQ guy?

If any company is going to try and stay Agnostic and/or "open platform" or however you want to put it, most rep firms just won't be it IMO.

I think it comes down to if a company wants to have physcial representation in an area, do you have employees who do it, or do you outsource it? Return on investment. Maybe you don't do enough business in an area to recoup expenses of having a full time rep there, but you want still want a presense. You either risk having someone full time there in hopes they grow enough ROI i na timely manner, or you outsource it to the firm. And you would do the same thing with that firm that you would with your full time rep: measure and analyze their performance to make sure it is actually them bringing in the buisness and it's not organic, naturally occuring sales and growth that would have come otherwise.

I don't see manufacturers (even the big ones) staffing a territory like rep firms do. In our area rep firms have 2-6 people on their team in a single state and the manufacturers usually put 1 and in rare cases 2 direct people (maybe a sales & a technical). Most of the time, we see direct manufacturer sales people (1 or 2) have to cover our state as well as 4 or 5 other states.

There are several interesting points of view that have been stated about why Rep firms are the right or wrong way for a factory to sell their product- one key benifit that has not been mentioned is relationships. If you look at Linkedin and check out any of the major manufactures Regional Managers, you will see most of them stay with a company for less than 2 years. If you look at the rep firms that are successful and properly staffed most of their staff have been, not only in the industry a long time, they have been with the same company long enough to relate to that companies ethos.

Use of rep firms works at a certain market maturity point. IT passed through that point years ago (mostly.) This sounds like assimilation into a giant 21st century manufacturing conglomerate. Yes, the exec ground the gears on the corporate messaging sportscar. If you had ipvm.com in your left mirror and dropcam in your right mirror you might grind the gears, too. Not clear where this is going. If this is how Milestone gets genetically modified into Canon Camera Station well then assimilation's like that. If this is how the new team thinks you interact with the market well then the message seems to look muddy to the ipvm.com crowd, I guess.

My experience is that rep firms are a US based idea that doesn't travel well in APAC including Oceania. Since Milestone is software based, it's probably not price sensitivity, in this particular case, that's driving the decision - however personal on hand service is definitely lessening across the board, as a spec sheet is always an online item and YouTube clips substitute for physical visits. In a way it gives the end user more power.

Also, to have a social network frame of reference with your peers who are using or considering an existing item or now technology has tremendous power that didn't exist a few years ago.

I'd never considered this until this discussion and it's always expansive to see the different points of view.