The Sales Agents
Many companies, who cannot employee full time salesman to cover a market segment or demographic region, utilize sales agents. Webster defines a sales agent as: one who is authorized or appointed by a manufacturer to sell or distribute his products within a given territory but who is self-employed, may or may not take title to the goods, and does not act as an agent for a principal. These agents can be a very valuable part of the sales effort but are often drastically underutilized. Let’s consider some of the misconceptions about agents and how to optimize their value in your sales effort.
The first question is Do you really need a salesperson at all? In today’s, internet connected world, a sales person is only of value if there is no need for interactive person-to-person communication. Commodity items, such as spare parts or packaged goods, can we sold on the internet. Value-added products, such as complex software or machine tools, require person-to-person discussions. Most people still want to visit an automobile showroom and kick the tires before making a purchase. Salaried salespeople are very effective but must be used prudently.
Agents are best used where the economics of a direct salesperson cannot be justified. They can effectively handle smaller accounts. They are effective in low density geographic areas where travel time between sales calls can be time consuming. They are effective where they already have a network of buyers, which has already been established through the sale of complimentary products. For example, if they were already selling machine tools, they might also sell conveyor belts.
A great example of this is the sale of MRIs by General Electric. They employ a direct sales force to work with major hospitals in urban areas, but utilize sales agents to handle the smaller hospitals in more rural areas.
Sales agents tend to be a very independent group. By nature, they are sale driven, since their only source of income is the next sale. Of course, they will work on a sales with a longer gestation period, but the close-in sale will get their priority. Don’t expect detailed written reports as you would with a salaried employee. To them, time spent writing reports subtracts from time spent closing the next order.
It is common that an agent may not have the extensive product knowledge that you would expect from an employee. They need a lot of support. Teach them to ask the right questions so that during proposal development they don’t have to return to the prospective client several times to clarify their wants and needs.
Think of your agent as the door opener and in need of your support to finally close the order.
Don’t ignore them. One belief businesses develop is that it is totally up to the agent to generate business. Isn’t it true that if they don’t get orders, they don’t get paid? What more incentive do they need? That belief will not generate increased sales.
Many agents have a touch of paranoia. That paranoia is generate by poor sales management either as a result of your company or the actions of other of their principal firms. Often as sales grow in an agent’s territory, there will be a discussion of replacing the agent with a direct salesperson. In most cases, exercising that decision breaks the relationships developed by the agent and leads to a decrease in sales. Like anyone else, agents seek stability. When that is understood, they will increase their efforts to build your business.
Just like any employee, you need to communicate and motivate. Spend time visiting with them in their area. Call on customers and prospective customers with them. Don’t underestimate the amount of effort and organization it takes to develop a two-day schedule of visits. It becomes a great way to educated and appreciate their customer knowledge. We once met with an agent who took us on a scheduled visit to plants in his area. Upon arriving at one plant, he could not find the front gate. What a revelation that was for us and an embarrassment for him.
Remember that you are not your agent’s only principal. Don’t assume that they will ever only concentrate of your business. Your objective is to get a significant share of their mind, through communications and support. As much as you can, make them feel like part of the family. Invite them to sales meetings or to just spend time at your office.
As you develop a sales plan for your business, it is important to understand the role agents can play in its development. That plan needs to mesh with your overall business plan and the marketing component. We invite you to visit our website www.plangoals.com and schedule one of our Complimentary Advisory Services.