Ever wondered if outsourcing your sales would work for you?
Bet you have!
Scale at will for minimal risk while drawing on the networks and skills of a seasoned professional.
Sounds great, doesn’t it?
But simply knowing whether it’s right for you or not will not tell you how to make it deliver to the max.
And that’s exactly what we’re about to walk you through.
We are about to answer all your questions about how to generate sales and revenue with a commission-only sales agent.
Strap yourself in and enjoy the ride – here are some of the check points you’ll be passing:
- How can I find and secure independent sales professionals?
- What about being able to sort out the wheat from the chaff?
- What will the best agents be looking for in a partnership with me?
- And how do I ensure my ‘gig’ looks attractive to them?
- How should I drive motivation and secure commitment from someone I do not directly employ?
And here is your all-important starting point:
Boosting your sales by working with independent sales agents is much, much more likely to succeed than you might think.
There are many misconceptions and misplaced beliefs about outsourced selling. Yet, it is perfect for those who are looking to expand and scale their sales operation – as long as it is approached correctly.
Unfortunately, there are far too many people who have started out on the wrong foot and become frustrated that results are not forthcoming.
We’ll help you to avoid these mistakes.
Even if you have already failed with hiring a sales agent or wasted time and money on independent sales professionals who failed to deliver, do not throw the towel in.
We are about to give you everything you need to successfully outsource and scale your sales with little or no risk.
Based on our real-world experience gained from supporting thousands of businesses over many years, we’ll show you how to succeed, whatever sector you work in, the size of your company, or the resources you have available.
Along the way, we’ll share a few harsh truths about why companies fail with independent sales agents – and we’ll also give you all the best practice you need from the many success stories.
Let’s kick things off with a super simple definition of what a sales agent is and then we’ll walk you step-by-step through everything you need.
Table of content
- What is a sales agent?
- How many sales agents are there out there?
- Common objections to outsourcing sales
- Creating a sales partnership
- How much commission should I pay?
- How earning potential affects your attractiveness to agents
- How do sales agents assess my company’s earning potential?
- How can I recruit the best agents for my company?
- How to get the most out of your sales agents
Is outsourcing right for you?
- Scenario #1: A large company with a well-known brand in its industry
- Scenario #2: A medium-sized company looking to expand
- Scenario #3: A small business looking for a low-risk model to grow sales
- Scenario #4: A start-up with a new innovative offering
- Scenario #5: A company that operates in a specialist and highly technical market
- Scenario #6: A company with low margins and correspondingly low commission
- Scenario #7: A sole trader/freelancer in a competitive market (e.g., graphic design)
What is a sales agent?
Let’s keep things simple:
A sales agent is a self-employed professional or company that sells your products or services.
- Using a sales agent means outsourcing a part or all of your sales process to an external partner.
- This partner may be self-employed or they may be a company.
- They may sell just for you – or they may also be selling for other companies as well.
- Those working with independent sales professionals are often referred to as ‘principals’.
How many sales agents are there out there?
Sales agents are so much more common than you may at first imagine.
When we think of a sales agent, we tend to picture an old-school travelling salesman who drives a car stacked with product samples from town to town.
But this is just a tiny part of the bigger picture.
There are, for example, those individuals who work from home as telesales agents. And there are those who use social media and online contacts to sell from a workspace.
But not all sales agents are home-based or working alone.
Many financial and insurance powerhouses outsource much of their sales activities to sales agent companies. Here groups of highly skilled salespeople sit in plush offices as they sell big ticket deals.
Similarly, the search and social media giants tend to rely on third parties to sell their services. A whole industry of companies and consultants has grown up to sell digital advertising as a third-party service. They may refer to themselves as consultants but they act, in effect, as sales agents.
Outsourcing is a mega-trend that is increasingly common within sales.
The idea of outsourcing sales activities, rightly, sounds very appealing to many companies – but still a good portion of them will try and fail.
Next, we are going to examine the objections they typically raise to justify their lack of success.
And after that, we’ll show you how to get it right.
Common objections to outsourcing sales
Despite the popularity of outsourcing roles in so many other areas of business, you will still encounter a certain degree of fear when it comes to outsourcing sales.
The feedback that we receive from companies who have unsuccessfully tried outsourcing sales runs like this:
- It’s too hard to find available sales agents
- You cannot trust the sales agents to work hard for you
- Finding a sales agent with the necessary sales skills or technical knowledge to close deals in my industry is impossible
In this guide we’ll show you some examples of when the sales agent model does not work.
But, as we kick things off, it is important to stress that any negative outcomes can easily be avoided.
Here’s the thing:
A sales agent’s relationship with you will only ever work if it is a win/win situation.
They help you expand your sales potential without the risk of headcount – and you provide them with an attractive commission package and other perks that make it worth committing to sell their socks off.
Your relationship is a partnership.
Creating a sales partnership
Sales agents choose to work with you to the same extent that you choose them.
This is why it is important that you ensure you are giving off all the right signals when considering an agent as a sales partner.
If you do not understand your relationship as a partnership then it is almost certain to fail to deliver for both of you.
You are no longer acting as their boss in the way you may with your full-time employees. In fact, nothing turns off the best salespeople than this. They will see you as a partner – on equal terms – not a boss.
And, as your agents are looking to provide one half of a win/win sales partnership you need to clearly demonstrate that you are providing the other half.
How much commission should I pay?
The sales agent model is so attractive because it is beautifully low-risk – but if you enter the relationship because you see it as a low-cost alternative you are very likely to fail.
The only way you can maintain a successful relationship with commission-based agents is by providing them with the terms and the tools that will enable them to be financially successful.
In fact, the best professional sales agents will only consider opportunities with a significant upside. So, get your terms wrong and you can kiss goodbye to those who will make a significant impact on your revenue potential.
Put yourself in their shoes:
They are taking on a lot of risk by working commission-only – and this risk must carry significant rewards as a pay-off.
Companies who see sales agents as a ‘low cost’ alternative will not even be approached by the agents who will make the relationship work. Instead, they waste their time with mediocre sales people and then wrongly conclude that outsourcing is just not viable.
Which leads to the inevitable question:
So, exactly how much commission should I offer?
And the inevitable answer:
How long is a piece of string?
The thing is that commission rates vary wildly from sector to sector. You’ll find some succeeding on 5% and those for whom anything less than 45% will be sniffed at.
The good news is:
There is a simple yardstick that you can use to judge how much commission you should be paying.
If you think that you are offering too low commission, then you probably are.
And if you worry that you are offering too high a commission, then you are probably offering just the right amount to attract the best agents.
There’s no way to baldly state offer X% commission. But it is invariably true that the companies who succeed with outsourced sales place their rates at precisely the point where they begin to feel uncomfortable.
So, if you are feeling easy, think again.
How earning potential affects your attractiveness to agents
Here’s the rub:
A high commission rate alone is not enough to attract the best agents.
They will also be keenly assessing the overall earning potential of the opportunity your company can offer.
Think about it:
A lower commission percentage of many sales will often beat a high commission of hardly any sales.
After all, 90% commission on zero sales is still nothing.
The earning potential for a sales agent, then, is actually a combination of the achievable sales and your commission rate.
And a word of warning:
Make sure you can back up any claims about the achievable sales on offer – it will be immediately requested.
How do sales agents assess my company’s earning potential?
There are a number of ways that a sales agent can quickly assess the attractiveness of the opportunity that you offer.
So, don’t assume they are looking at you as a blank sheet and you will be able to paint whatever picture you like upon it.
When you understand how you are being evaluated you can easily think about the things you want to highlight to applicants and work on countering objections to the trickier aspects.
Let’s look at these factors one by one.
1. Your profile
Agents will research your company online, so it’s important you have the basics in place.
- If you do not have an online presence and your own website then sales agents are unlikely to consider you as an opportunity that is worth pursuing
- Make sure your LinkedIn profile looks professional and credible as this is usually the next port of call
- It is also worth considering that candidates are likely to run a search for negative reviews or news stories
2. Your sales track-record
You will be expected to instantly demonstrate a successful – or otherwise – sales track-record. If you have existing successful salespeople in-house or outsourced sales agents you should highlight this.
For many start-ups, however, this may not be possible – as the history simply isn’t there, yet. That’s why being able to present compelling information on the next few points is absolutely critical.
3. Your offering
Having a unique – or significantly better – offering is going to obviously make the selling easier. As is a wide market or a smaller market that is awash with cash and drowning in need.
Highlight your benefits and your market’s appetite. While the best salespeople may be able to sell sand in Sahara, they really would prefer to be selling umbrellas when it rains.
4. Your sales strategy
The more you can structure your saes team – whether in-house or outsourced – the more they will trust your direction and consider you as a partner rather than a task master.
- Make sure you have defined your ideal target market and have some thoughts on how best to approach them
- Where are the low hanging fruits?
- What is the sales journey required for those harder to reach?
5. Your sales cycle
How long is your sales cycle?
Sales agents can work with both short and long sales cycles, but the longer the sales cycle the more important it is that you have in place a thorough sales strategy and comprehensive sales support.
With a longer sales cycle, it’s often advisable to find agents who have an existing income from sales partnerships with other companies.
6. Your sales support
How easy do you make it for your agents to sell?
Sales agents will look for support, such as the following, when reviewing how attractive your company is to them:
- Is it easy to register new sales?
- Is your CRM well-structured and user-friendly?
- Have you developed sales materials?
- Are product samples simple to get hold of?
- Do you forward qualified sales leads for your team?
How can I recruit the best agents for my company?
Positioning your company in an attractive way ensures you receive applications from the best out there. (Hooray!)
But you will also attract a fair few mediocre or bad applicants. (Yah boo!)
That’s why we’re about to show you how to sort the wheat from the chaff.
1. Look for signs of a motivated applicant
First things first:
You need agents that are truly excited about selling for you. If excitement and motivation does not leap off their expression of interest, spike it immediately!
In many ways, motivation can trump even sector experience. The last thing you want is someone who just sees you as another company among many.
Here are the two sure-fire signs of motivation:
- They have done their homework – your website has been reviewed, research into your markets made and they 100% get your offering
- They are already moving forward – they ask relevant questions and make suggestions about possible approaches and markets. The best candidates will already have customers in mind to start selling to.
2. Industry experience and existing contacts
Here’s what you will really love about the best sales agents:
They will specialise in your market sector and already have a network of current clients and contacts that they already have a successful relationship with.
This means that they already know the decision makers in the target market you are aiming to sell to and can quickly get sales opportunities into the pipeline.
3. Watch out for the ‘quick buck’ hoppers
There are a group of sales agents who live in the belief that the quick buck is always somewhere else – you know, where the grass is greener.
These are those who are always looking to jump ship for more attractive booty. Make sure you avoid these scallywags at all costs.
- Look out for short, generic applications
- Look out for a lack of research and understanding
- Look out for short stints at other companies and a history of changing principals
- Beware of anyone who offers to sign an agency agreement with no real thought
CV or not CV: that is the question
One reason not to reject a candidate is the lack of a CV.
Some sales agents will meticulously keep an updated CV, but many will not be able to lay hands on theirs for love nor money.
The reason for this is that sales agents can be part of a business or a professional sole-trader, and neither of these tend to hold CVs.
Yet, this CV-less professional sales agent has a proven track record and is actively working with the target market you want to approach…
… We suggest you drop the CV request.
The thorny issue of references
Here’s something else that may be missing.
An unemployed job seeker will fairly easily be able to furnish you with references from previous jobs but – a much more qualified – professional sales agent may not be able to.
This is simply because of the nature of their working relationships. It is often also the case that asking for a reference may seed the idea that they will be putting in less time and effort for their current principal’s company.
How to get the most out of your sales agents
Phew, you’ve come along way!
You now know how to attract the best candidates and quickly identify them from your pile of applications.
Hey, you’ve even signed an agreement with the agents you are confident will smash it for you.
But there’s more you can do to make sure this all works like a dream.
Here’s how you can gain commitment and help your sales agents skyrocket your sales.
The flipside of the commission coin
Commission-only sales has motivation built in to its model: the more you sell, the more you earn.
And that’s why most sales professionals prefer it to a fixed wage with less commission.
However, you should always bear in mind the flipside of this coin.
At the same time as a commission-based sales model increases motivation it also can decrease commitment.
And, yes, that’s commitment to you.
Simply put, there’s a bigger chance of a sales agent on a commission-only model to never start working – or to suddenly stop working – should something better come along.
Their agreement with you is, by its nature, less ‘committing’ as you only agree to pay if they sell.
Fortunately, there are ways that you – as a principal – can ensure that you make the most of the motivational aspect but also create the necessary commitment needed to keep your sales agent going.
Let’s take a look at these.
How to gain commitment from your sales agents
‘The reciprocation tendency is the automatic tendency for humans to try to reciprocate in kind what others have done for us.’
Robert Cialdini, Influence: The Psychology of Persuasion.
Here’s the thing:
To reciprocate is a trait that is deeply embedded in our nature – we just can’t help it and we do it automatically.
That’s why to secure commitment from your sales agents you need to first lay something of value on the table. This will bond them to you in a much more meaningful and powerful way than clapping them on the shoulder and breezily wishing them good luck.
These are some of the things to consider laying on that table:
- Quality sales leads. What better welcoming gift than an instant route in?
Of course, your sales agents will bring their own networks and contacts but by providing your own leads you are creating an instant partnership – and a sense of obligation.
- Sales support. By showing you have invested in what your sales agents needs to succeed – whether it’s sales materials, product samples, business cards, etc., you are demonstrating that you have committed to them. And they will now want to commit to you.
- Professional training. Not only will giving your agents proper training in your offering and markets help them achieve those sales, it will also show them that you are investing in them as a person. Expect to see this investment paid back by them to you.
- Cover their costs. Travel costs for sales are much lower than they used to be – as online meetings are often preferred to face-to-face. But the gesture of covering travel costs can go a very long way in securing respect and commitment.
- Consider a retainer. While there is much to be said for a commission-only relationship, you may want to consider when new sales agents start out with you offering a fixed hourly payment, say for the first 100 hours, to secure their buy-in and get them off to a solid start. This is particularly the case if you are a company with a ‘weak’ sales record or a start-up with no real record of sales.
Is outsourcing right for you?
We’re at the chequered flag and you are now ready to get out there and find your outsourced sales superstars to scale your sales.
In this final section, we’ll just review your chances of successfully outsourcing your sales to agents under any circumstance.
Scenario #1: A large company with a well-known brand in its industry
You are in pole position: it’s always attractive to associate with and sell for a recognized brand.
The only things you should be ready to counter that may be counting against you in the minds of potential agents are:
The saturated market effect
Agents may worry that you have been so successful that the target market for new sales is now significantly constrained.
The red tape effect
Larger companies often have a difficult order process due to the bureaucracy in place that makes it hard to create custom offers to secure a client.
Scenario #2: A medium-sized company looking to expand
Happy days! Your company will be very attractive to professional sales agents as it does not have the possible disadvantages of larger companies but it does have an established reputation and a solid track-record.
Be sure to highlight your previous sales successes but also get out that crystal ball to highlight the new target markets just waiting to be reached.
Scenario #3: A small business looking for a low-risk model to grow sales
For many agents, small really is beautiful.
At smaller companies their efforts can make a huge difference and they can look to command more influence and to secure exclusive sales areas.
Male sure you highlight the benefits of working for a smaller company, such as rapid decision making and a chance to steer strategy and direction.
Scenario #4: A start-up with a new innovative offering
As much as sales agents love the challenge and excitement of something new, they can also be wary of any company with no or very little sales history.
Here are some things to consider:
- Do not fall into the trap of blithely stating that this will be an easy sell unless you have sales data to back this up. Instead try an approach like this: “We strongly believe our product will sell, but we need a sales pro like you to help us.”
- You could also consider offering a retainer – as discussed above – for their first few weeks. Conjuring up some money for a pilot project where the agent’s initial sales activity is financially reimbursed based on activity rather than results can help secure quality sales people.
- If the idea of a pilot project doesn’t have wings for you, make sure you ramp up other benefits, such as offering sales leads and support, and jack up that commission as high as you can bear.
Scenario #5: A company that operates in a specialist and highly technical market
You’re in luck – but you may have to search that bit harder.
For ‘off the shelf’ solutions the technical knowledge required is significantly less than for solutions that require technical tailoring for each client.
This means that the more customisation required for a sale, the more specialist the agent, and the tougher they will be to locate.
But they are out there.
Another option here is for you to use sales agents as introducers who generate qualified leads for you. Once the lead is warmed up, they can be passed over to your inhouse team for the real nitty-gritty tech specs.
Scenario #6: A company with low margins and correspondingly low commission
OK, this old chestnut is a tough nut to crack – but you do have options.
While earning potential is king for sales agents there are a few ways you can otherwise crown your offering.
The add-on model
Byemphasising that you are looking for agents with existing income streams, you can position yourself as providing an additional revenue opportunity that they can sell to their existing portfolio.
The pay per lead model
Instead of having your sales agents close the sales for you, this model allows you to use their networks to forward sales leads to you. Make sure you have a water-tight definition of a qualified lead and a transparent system for tracking which agent has sent which leads.
The affiliate model
This is another way to cut down on the leg work and commission but still maximise your agent’s networks by allowing them to promote a (tracked) link to a landing page that pays commission on any sales that are generated online.
Scenario #7: A sole trader/freelancer in a competitive market (e.g., graphic design)
Much as I hate to say this, but the odds are severely stacked against a sales agent working for you (let alone working out for you).
There are many others similar to you, so it’s a tough sell. And as a one-man-band what you offer is not really scalable.
Your best bet is to make a phenomenal playbook on how to to do sales for your specific service.
If there is no money to pay someone a fixed wage to do this job you will need to do it yourself.
Basically, learn how to sell your service and document how you do it (including prospecting, scripts, e-mail templates, quote-templates, how to handle common objections, etc.).
If you manage to optimize the sales process making it possible to earn a good income on commission only you can try to find a sales agent that is willing to take-over the sales role from you.
Commission-based selling by outsourced sales agents works.
And it works for just about every business.
But you do need to understand how to find, attract and keep the best sales professionals.
We can help you do that. Head over to our services page to get your sales scaling: salesagents.uk/find-sales-agents
We can see those hands up, so let’s see if our FAQs can answer any remaining questions – and if they don’t, then feel free to drop us a message and we’ll do our very best for you.
Recurring commission is something that the best agents will most definitely be on the look-out for. The short answer is that if you can offer recurring income, then you should do so.
The slightly longer answer is that you need not worry about such income leading to your salespeople slacking off as they rest upon their laurels.
You can make it clear that your agents are responsible for following-up with their clients as part of their commission.
And, should you not wish to do this, you can put in place an agreed budget for new sales that must be reached for recurring commission to be paid.
This very much depends on your market.
Take selling services to nuclear plants compared to selling office services. While there are just 11 nuclear plants in the UK there are around 5.2 million offices: that’s quite some difference.
It’s worth considering that the best agents may well not be that bothered about exclusivity: they are confident enough about delivering anyway.
If it does seem appropriate to offer exclusive sales areas you should ensure that sales targets must be met for this benefit to continue: the last thing you want is a passive agent ruling part of your roost.
Yes, but so could any other person you employ.
Choose carefully to reduce any risk to an absolute minimum and remember that sales agents must maintain their own good reputation to stay in business.
Damaging your reputation would also damage their own.
In theory yes, but it’s very uncommon.
Most agreements carry a clause that prohibits the agent from selling for a competitor.
However, do bear in mind an agent who sells complementary products is bringing to you warm contacts that are easily approachable.
Whatever you can do to support the sales process for your agents will make them more productive and more committed to you.
So, why not let them have access to your CRM?
It’s not just great for them but it also gives you more visibility of their activity and it makes it easier to pass leads onto them and to pick up any loose threads should your relationship end.
As with any aspect of your business it is always good to know the basics of the law.
If you use our services at Salesagent.uk you can post any questions you have to the agency law experts at Myerson Solicitors and they’ll answer them for free.
What are you waiting for?
Written by Lars Hellestrae. He has been working with independent sales agents and principals for over a decade and is one of the directors at Sales Agents Ltd. You can e-mail him at [email protected] and you can find him on Linkedin here.