Going from Direct Sales to Contracted Outside Sales Reps
The theme of Agency Sales magazine this month focuses on manufacturers who switch from a Direct Sales Force to contracted outside Sales Reps. While there have been hundreds of pages in books dedicated to this very topic, I’d like to highlight some of the more important points.
First, manufacturers — be certain you are making this sales philosophy change for the right reasons, such as:
- Lower total cost of sales and lower internal “soft” costs.
- More predictable sales costs that go up or down with sales.
- Long-term sales rep commitment to the territory and a stable sales force.
- Efficiency and opportunity in a multi-line sales call.
- A desire to pay for results, not efforts or “overhead.”
Second, manufacturers — be prepared when making this change:
- Perform your due diligence before contracting the right rep.
- Prepare a list of your company’s strengths and weaknesses in all areas.
- Prepare a list of all the support functions your company provides to help the rep be successful.
- Prepare a list of questions to ask each rep interviewed, including your expectations.
- Prepare a win-win contract that is fair to both parties.
Third, manufacturers — expect to pay for performance:
- Higher commission checks = higher company sales and profits (= good picture).
- Honor the terms of the contract agreement.
The bottom line is this: you want to treat your reps as partners — and plan to thrive and grow. Be innovative with new products, build your brand, invest in process improvements and support functions. As a result, outsourced reps will do more than their share to help your company succeed. Most of all, communicate, communicate, and continually communicate expectations, changes, goals, and feedback.
A parting note: use MANA as a resource for guidelines and support on all of the above topics. The association has white papers, books, articles, seminars, and years of experience — helping both manufacturers and reps be successful together.
Good Selling!
