Special Report

The Small Business Owner Working with Independent Sales Reps

November 2009

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Copyright 2008, Martco Associates a division of Jancris International The Concept

Overview

Many small business owners do not have the capital, let alone the time, to invest in training full time sales personnel. The independent sales rep gives small business owners an option to get professional sales people on the street to sell their product or services quickly and economically.

In my 20 plus years of experience, I was an independent rep during nine of those years. I have hired more than 200 different independent reps in several different industries for my company and for other companies as a consultant.

There are some points that you should understand before hiring independent sales reps. This report will address many points you should be aware of.

Understanding the Independent Rep

The independent rep did not go to college to learn to be an independent rep. Usually they are salespeople that had worked for a big or mid size company for several years. They may have become an independent rep because of a lay off, the sale of a company or because they were tired of the corporate world. Whatever the reason, they are experienced professional salespeople that do not need training in selling skills but do need training on your products.

• Most reps have one or two major lines that contribute to the majority of their income. No doubt, in the beginning, your line will not be one of them. You need to know which company it is and determine how demanding they are on their independent reps. As far as time demands, the company may be so demanding on their reps that the amount of time they can give your product/service is limited.

• You can tell within ninety days if the independent sales rep is working for your company or not. Are there any orders from the rep? Are there any questions they needed clarified? Have they set up a meeting for you with the target accounts? I can understand the inability to secure a meeting with the targeted accounts but cannot accept the absence of orders in the first ninety days.

• Independent reps are not called independent for no reason. Even the best reps in the territory may not be a good match for you, your company or your product. If you are not satisfied, then you must move on. Do not fool yourself into thinking that you have a good rep in a territory, when you have a rep in name only.

Hiring Independent Sales Reps

Hiring independent sales reps is one of the easiest things to do. However, hiring an effective independent sales rep for your small business is not easy and is time consuming. Keep the following in mind as you interview independent reps:

• The good reps have to believe there is a market for your product. They have to feel that your company can handle the needs of their customers and that your company has the necessary tools to help the rep make the sales.

• You should not concern yourself with the sales ability of an experienced independent rep. If he or she has been an independent rep for several years, they can sell or they would have given up since they only get paid if they sell.

• The number of years the rep been in your industry and the number of years as an independent rep are two things you need to know. How long he/she has been an independent rep is critical. They may have been laid off because they could not sell and had no other opportunity and thus became a rep.

Also, the life of an independent rep is much more complex than working for a company. If the rep is not able to balance all the balls in the air, he/she may be doomed for failure. The number of years in the industry is critical because you are looking for someone who knows the industry. You, as a small business owner, do not have the time or the money to train someone.

• Before you set out to hire an independent rep force, you need to put together a sales manual that answers many of the questions the rep will have, such as; what is the commission rate, when do they get paid commissions, terms and conditions of sale, different policies from credit policy to sample policy and everything that is particular to your industry and company.

We will be happy to send you a copy of the Sales Manual Template. Please contact us at www.martcoassociates.com or send us an email at

tmartucci@martcoassociates.com

Finding Independent Sales Reps

There is no magic formula in finding goodindependent sales reps.

1. One of the best ways is to talk to your customers in each territory - usually they will give you one or two names. Remember, you are talking to a customer or potential customer. Talk about your product or even send them a catalog or an email on your product or services. This is important for these reasons:

• After you contact the independent rep and tell him/her how you got their name, the first person the rep will call after they hang up with you is that customer.

• While you are talking to the customer or potential customer you might make a sale.

• It is always good to have the customer thinking about your product/services.

1. Trade shows - most industries have a trade show, conferences, etc. where companies exhibit their product and services to gain leads and sales. You should exhibit at the major one in your industry or geographical area.

1. Place a small 8 x 10 inch sign in a frame (“Reps Wanted”). Some reps may come into your booth to inquire about what territories are open.

2. Message Boards- at most trade shows there is a message board where you can post “Reps Wanted” signs and your contact information.

3. Another business owner that is in the same industry - talk to them and see if they have any good reps that they can recommend.

1. Trade magazines or industry magazines - many times companies trying to get publicity will send in pictures of the Rep of the Year. Also many companies will have pictures of a customer they are honoring and they may have a rep in the picture. These are both good leads.

5. Your current reps - ask them if they know of any reps in the territory that you are looking to fill. They go to sales meetings and many times meet other reps from different areas of the country. They may not know if they are good or not, but it is a name you can start with and then do your own due diligence.

Do’s and Don’ts of Working/Hiring Independent Sales Reps

After you have hired your sales team, understand that it is a team and you need to become the captain of theteam. We have some do’s and don’ts in working with your team.

1. Communicate with them - these reps may have several companies they work for. Maintain regular contact via email, phone and sales bulletins, and be prudent on the frequency.

2. Pay their commission on time - the biggest complaint and concern an independent rep has is being paid his commission due and on the timeline that you have set out in your manual.

3. Be honest - being honest is always a good policy, but it is more so when someone is representing you to your customer/clients or potential customer and clients.

1. Let them know your goals and objectives - you should come to an agreement on your goals and objectives and the time line for accomplishing these goals and objectives.

1. Make them feel part of the company - when I was a rep, I would tell the company owners that I will work with them as closely as they will allow me. The companies that allowed this were my most successful companies.

1. They are an independent contractor -you need to understand that! They are not going to do reports or give you a planner on their travel and customers they are visiting.

1. Always look - just because you have a good rep today, they could get a new line tomorrow and if the company considers your company a competitor the rep will be forced to drop your company. You must make a decision in 90 days if the rep is working out for you. If not, you have to drop him/her and move on to the next rep.

1. Be Positive/Don’t Commit - when talking with a prospective rep, be professionally positive. If you are talking with them on the phone, do not make a decision with the first conversation. If you are at a trade show, interview and explain that there are several reps you are interviewing about the open territory and will be making a decision in a short timeframe. You want time to think about the rep or rep group and do some checking to see how your line matches up with the other lines he/she carries. More importantly, see if the rep follows up with you. If he doesn’t, he may not be interested or possibly may not be good on following up with his customers.

9. Always get a company resume or a company overview - it gives you an opportunity to see how professional this rep or rep group is about their business. It should give you some idea on who their key customers are, what distribution channels they cover, how many people are in the agency and the other lines they represent. This gives you an idea where their time is spent and how your products or services fit into their “bag” (slang for what they are selling).

10. No contracts - in the beginning of my career, I had reps sign contracts. I stopped after spending too much money on legal fees. I would give a contract to a rep and he would give it to his lawyer and of course his lawyer would want to change something, thus my lawyer would get involved. Then in 90 days the rep or I would decide this was not working out and we would part our ways.

I decided that a “Letter of Agreement” as indicated in the Independent Reps Manual, is more than adequate and gives everyone an understanding.

11. Remember the core principle a rep lives by - they can always find a line to represent, but cannot always find new customers. Their loyalty is with the customer. I always felt it was important if a rep believed in a statement made to me in the very beginning of my sales career - “the customer writes the check and the company you work for signs the check.’

Tom Martucci of Martco Associates has been a very successful independent rep and has hired and worked with hundreds of independent reps from many different industries. Feel free to contact us to set up a phone conversation to see if we can be of assistance to you or answer a question.

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Martco Associates is a flexible firm that works with companies in sales and sales management. They coach individual sales people, give training seminars to sales people or sales management and have acted as company Sales Manager on an interim basis.

Feel free to contact us or call 732-691-5460.www. martcoassociates.com