WHAT ADVANTAGES DO COMPANIES GAIN WHEN USING COMMISSION ONLY SALES AGENTS?
Working with independent Sales agents instead of full time direct sales people has a number of benefits for your company.
While there are numerous advantages over directly employed sales personnel we’ve laid out a short list of the most important advantages companies gain when using Commission Only Sales Agents and a couple of key pointers in the relationship between you and your Agents.
- Fixed costs – Principals know exactly how much a sale will cost and you can budget accordingly.
- Existing relationships – Agents know the target market and should be connected to the contacts you are trying to reach. Consider how long it will take a direct sales person working for your company to develop the same relationship the Agent may already have in the territories and marketplaces you want to develop.
- Sales Agents are in it for the long haul – Studies looking at direst sales personnel show that the average sales person only stays with an employer for about two years before they begin to look for a new position. Sales Agents have usually made a long term commitment to their industry and products.
- Industry and territory knowledge – An Agent can help the producer or principal by understanding the local market because of their local knowledge. Sales Agents can also provide valuable feedback on competition and requirements for product changes.
- Agents are motivated – Agents only make money when they are selling. They traditionally work longer hours, earn larger incomes and don’t waste time on non-productive sales activities. The key for Principals is not to waste Agents’ time either, selling is their role.
- Existing Relationships – A direct sales person who doesn’t have a relationship with a potential customer must develop trust before they can begin the sale. An experienced Sales Agent almost certainly has a relationship and when they meet an existing client they can easily introduce your product while discussing other portfolio lines they already sell to the customer.
- Lower cost of sale – It costs a manufacturer or Principal less to sell to consumers using Sales Agents rather than when using a direct sales force.
- Quicker Sales coverage – A company can quickly expand into new territories with Sales Agents already in place
Some pointers for Principals to remember!
When you are working with Sales Agents you have to be willing to give up control and be prepared to take action if your Agents don’t give the attention you expect to your product or service. If Agents aren’t performing you’ll need to replace them.
On the other side of the relationship – Agents won’t want to spend time sending in sales reports when it detracts from their time selling – SELLING is what Agents do.
When they are in front of their customer they are in control and their success with your product and their relationship with you will determine how much of their selling time your product is going to receive. Help them make more money by for example supplying leads and they will direct all their energies towards getting your product into their customers’ hands.