Should your salespeople work out of local, regional, or national offices? Should you base them in offices where staff members provide daily support and their boss can supervise their activities closely? Or should you set them free to operate on the road or out of their homes? Or, if you have a small business, should you do all the selling, or does bringing in a salesperson on commission make sense?
Determining how many salespeople you need
If you have an existing sales force, you can examine the performance of each territory to decide whether more salespeople can help or whether you can do with less and where basic sales service may be falling through the cracks. Ask yourself the following questions to help you optimize your sales organization:- Are some territories rich in prospects that salespeople just don’t have time to get to? Then consider splitting those territories or adding salespeople.
- Are you experiencing high customer turnover in a territory as a result of poor service or other factors that can be controlled?
- Are you operating in some territories with little sales potential that could be detracting your efforts from those with higher potential?
Hiring your own or using reps
You have to decide whether to hire salespeople yourself or subcontract. Most industries have good sales companies that take on the job of hiring and managing salespeople for you.Called sales representatives (or just reps), they usually work for a straight commission of between 10 and 20 percent, depending on the industry and how much room you have in your pricing structure for their commission. Reps that perform consultative selling and customized service often expect, and deserve, a higher commission.
If you have a small company or a short product line, using sales reps makes the most sense. They’re the best option whenever you have scale problems that make justifying the cost of hiring your own dedicated salespeople somewhat difficult.
Scale problems arise when you have a too‐short product line, which means that salespeople don’t have very much to sell to customers, and/or sales calls produce small orders that don’t cover the cost of the call. Reps usually handle many companies’ product lines so that they have more products to show prospects when they call making the potential of a return much higher.
If you have a long enough product line to justify hiring and managing your own dedicated salespeople, doing so will give you more control and better feedback from the market. A dedicated sales force generally outsells a sales rep by two and ten times as much because their sales focus is your product line.Finding good sales reps
How do you find sales reps? Word‐of‐mouth referrals or meeting at a trade show or industry conference are great ways to find out who is reputable, presents well, and is available. Or, even simpler, ask the buyers of products such as the one you sell for names of reps who currently call on them.A growing number of hub websites offer access to sales reps and manufacturers reps as well as freelance salespeople who work under short‐term contracts. These sites provide leads, not final answers, so make sure you do your screening carefully, and if you do hire someone, do it on a trial basis to start. Here are some of the options on the web today:
- Goodcall, which claims to have “everything you need to run an outsourced sales team”
- Time to Hire, which helps you locate sales reps
- Guru, which cues up sales reps’ ads or posts your project description for them to respond to
- RepHunter, which specializes in manufacturers reps and independent reps
- SalesAgentHUB, where you can register as a company in need of reps
- GreatRep, where you can search the rep database, view postings of Lines Wanted, or post under Reps Wanted
Managing reps effectively
After you have reps lined up for each territory, you must monitor their sales efforts on a regular basis. Which rep firms sell the best (and worst)? Usually, 10 or 15 percent of the reps make almost all your sales.Monitor your reps to find the best and make changes quickly to cut your losses and maximize your sales potential. And train each rep in how to tell your brand story so your message and ESP are consistent across all reps and marketing channels.
Compensating your sales force
If you want to recruit top‐tier salespeople, you need to offer them a top‐tier compensation plan. Find a way to make your compensation model different from the norm in your industry to make your job openings really stand out.For example, if you want to make sure your salespeople take a highly consultative, service‐oriented approach with long‐term support and relationship building, make your compensation salary‐based. If you give them sales incentives, consider bonuses linked to long‐term customer retention or to increased value among existing customers.
Your compensation plan will then stand out from competitors and send a clear signal about the kind of sales behavior you expect. Similarly, if you want the most self‐motivated salespeople, offer more commission than the competition.
The details of what you must offer in base salary and in commissions vary so much from industry to industry and region to region that you need to research comparable positions to establish a base before you design your compensation plan.
Whatever you pay them, salespeople and reps do best when they have high task clarity, defined as clear links from their sales efforts to positive results. Make sure they have the products, leads, knowledge, and support to be successful. You’ll find that success is the greatest motivator, and your sales force enjoys the process of selling for you.