Early last week, a holiday week, sources reached out to relay the news that multiple manufacturer sales representatives were being terminated by James Loudspeaker. Happy Thanksgiving…you’re fired. In chats, I heard of the pain that some those reps felt – for while getting terminated is never a happy circumstance, getting terminated during holidays seems particularly poignant.
James Loudspeaker’s CEO & Sonance’s CSO speak to what is going on…
James Loudspeaker CEO Mark Schafle confirmed that the company was beginning its integration into the Sonance ecosphere. Combining sales operations was always part of this plan, and Schafle said they had been clear and direct on this point with their reps for months now.
However, Schafle acknowledged that the timing of this action during the week of Thanksgiving was not necessarily ideal timing, but there never really is a good time for these types of discussions. Furthermore, he feels that the earlier the reps know the better, as this gives them time to adjust to this situation as they look forward to – and plan for – 2020.
A Long, Step-By-Step Process
As Strata-gee has already reported, Sonance announced their acquisition of James Loudspeaker this past September on the eve of CEDIA Expo 2019. The potential ramifications of that acquisition were instantly obvious to many parties holding a stake in one or the other of these two companies…including a couple of James reps who expressed their concerns to me at the Expo. Some Sonance reps as well, were undoubtedly concerned about just what this acquisition meant for them.
With the actions taken last week, James is starting what can best be described as graduated steps towards a new sales organization being created as part of their integration into Sonance. The process has taken months of meetings, conference calls, and interviews to get to this point with some undetected steps having already taken place.
A ‘Handful’ of Pre-Thanksgiving Terminations
Last week, a “handful” of rep firms received their 30-day notice of termination, Schafle told me. Prior to this, there had been reps in a few other territories who have previously been terminated or eliminated from consideration or in some cases resigned. Some of those earlier separations were voluntary, in as much as the reps did not want to resign other lines that Sonance considered a competitive brand…and so instead, they chose to let James go.
“We’ve been making a lot of changes to the rep team…and it’s always difficult. You know you’ve been working with guys for a long time and they’re really not business associates – I mean they’ve become friends over a long period of time.Mark Schafle, CEO of James Loudspeaker
James’ CEO & Sonance’s CSO Describe an Intensive, Collaborative Process; Companies Shared ‘Zero’ Reps
I spoke with both Schafle and Sonance Chief Sales Officer Jason Sloan, who each described an intensive – but collaborative – process of analyzing each rep territory and the representatives there for both companies. Starting at CEDIA, Sloan told me, they began immediately speaking with, and interviewing, rep firms. The Sonance folks interviewed James reps…and the James management met with Sonance reps.
“We met with a large number of the James representatives at CEDIA, and we talked to as many as we could. And we were really open, we told them, ‘Look, our goal will be to present a unified sales front for both James Loudspeaker and Sonance.’ That in no way changes what we also want to accomplish, which is keeping the brand [James] separate.”Jason Sloan, Chief Sales Officer of Sonance
Thus began a process that is continuing to this day. Both companies had a full complement of rep firms to assess. “The reality is that we shared zero reps,” Sloan said. And so that meant that all territories needed to be carefully analyzed. Both executives assured me that no assumptions were made at the beginning of the process as to which rep firm in any territory would ultimately prevail. “There was no forgone conclusion,” Sloan said firmly.
One Key: Looking at Rep Assortments for Signs of Strength…and for Potential Conflicts of Interest
While the likely outcome for some territories became clear upon a cursory examination, many others were much more difficult and required much deeper study. Both executives called it an intensive process of meeting with both rep firms in a territory – assessing their strengths organizationally, looking at their “bag” as Sloan called it – their list of lines represented – determining which of those represented strengths…and which represented a conflict of interest. And perhaps most importantly, discussing with the reps their suggested strategic plan for each line in their territory.
Making the process even more difficult – “Both brands have some really great rep firms,” Sloan said. It required an inordinate amount of analysis to figure out which options offered the newly combined organization the best opportunity.
Still Some Territories to be Decided
As the decision was reached by both James and Sonance, the reps were promptly notified. “In most cases, I notified them myself directly,” Schafle said.
Both Sloan and Schafle told me that there are still a few territories where the decision has yet to be made. The fate of those territories will be decided after further study, with their notification coming at that time.
Conflicts Often the Deciding Factor…for Each Side
Schafle noted that in many cases, line conflicts were a deciding factor – for either the rep seeking to apply for the territory…or for James/Sonance to countenance. James lost a few reps they would have liked to have kept, Schafle admitted, but Sonance couldn’t agree with the conflict of interest with certain of the reps other lines.
I asked the James CEO…was Sonance open to your take on these reps? Were you able to advocate for those you felt did a good job? Schafle says that there were no “rules” they had to follow…Sloan at Sonance was very open to hear the thinking from James.
Sonance was Very Open to James’ Input
“Jason was NOT saying ‘This is what we’re going to do…period.’ He was more like, ‘Hey, let’s go through each territory and talk about them,'” Schafle told me. After their discussion, Jason would say, “Here’s what I’m thinking…what do you guys think,” Schafle added, saying he appeared very open to their input.
Both Schafle and Sloan described to me what appeared to be a fair, open-minded, and thoughtful process that led to their collective decision. “Some of these decisions were painful,” Schafle admitted. But he said he couldn’t argue that the wrong selection had been made at the end of their in-depth process.
Proud of ‘How We Went Through This Process’
At the end of the day, “It’s change and everybody’s having a little difficulty with change…as is human,” Schafle said. “Some do well with it, others don’t do well with it.”
Sloan added, “You want to do the right amount of due diligence. I take a lot of personal pride, and I think our company takes a lot of pride in trying to be respectful and thoughtful. My hope is that we’ve done that. I don’t know if it will be seen that way at the end, but I feel like I can look anyone in the eye and say I’m proud about how we went through this process.”