|Copyright 2014 by Virgo Publishing.|
|By: Cary F. McGovern|
|Posted on: 05/01/2007|
Contrary to some beliefs, we’ve found a wide variety of agents in both large and small storage markets. By definition, an agent is “a person or business authorized to act on another’s behalf.” Hence, an agent sales representative is simply “an individual or a business that sells on your behalf.” How might an agent sales representative help your records-storage business? Read on …
Third-Millennium Business Culture
These days we commonly find ourselves using techniques that were unheard of 20 years ago. These amazing technologies can improve methods to make our business have a razor’s edge over fierce competition. Another of the innovations caused by societal change is the development of agent sales forces. The late Peter Drucker wrote in his landmark book, The Post Capitalist Society, that we would face globalization and a society that would become much more flexible.
Knowledge workers, like sales representatives, become “free agents.” They can work for numerous companies at the same time and increase their potential revenue as a sales entrepreneur. Consequently the cost of sales can be reduced to a pure commission rather than an overhead cost. The best salesmen prefer commission basis because they can earn more as long as there is no top-stop maximum amount imposed by the company.
A Variety of Sources
Your marketplace undoubtedly has a wide variety of potential sales agents already, but how do you find them? Let’s look at a few of the possible targets:
Free Agents: Believe it or not there are entrepreneurial salesmen who sell for all sorts of businesses. They create their own product portfolios and sell for manufacturing and service-related companies. If you would like to learn more about these folks visit http://www.manaonline.org/html/pdfs/special_rpt.pdf.
You might also read any of the following (selected from a myriad of ) books: Selling Through Independent Sales Reps, Outsourcing the Sales Function: The Real Cost of Field Sales and Training Agent Sales People. Another great resource for sales networking groups in larger cities is Business Networking International (BNI), which can be visited at http://www.bni.com.
Retired Sales Executives: Many large sales companies have downsized sales force over the past decade. You can find retired sales representatives in their 50s and 60s who still want to be in the game. Many of these have been professionally trained in consultative selling techniques. Locate them through Xerox and IBM retirement clubs. Ask a few people you know who work for companies like these and you may have a few choice picks in no time.
Stay-at-Home Moms/Dads: These individuals have opted out of the workforce to raise their children. Their potential workday might be from 9 a.m. to 2 p.m. It’s possible to find very qualified and highly motivated professionals who want to work on their own terms, possibly putting in only 10 hours a week or month. So where can you find them? Start at your church or your school PTA; maybe ask your friends. You may be delighted with your results.
Small Business Owners: Dozens of businesses relate to records storage: office products, shelving, consulting, imaging, copier sales and a plethora of others. Approach these entrepreneurs with a deal to put cash in their pockets as well as sweeten the pot for their sales representatives.
It’s important to sign a nondisclosure and non-compete agreement with these groups. Of course, having a relationship with the owner is always best. One of the best places to find standard types of agreements designed for your own state is at the Law Depot link, http://www.lawdepot.com/contracts.
Care and Handling
A key lesson in outsourcing is that you can never allow the outsource resource to manage you. Design a firm agreement and manage the outsource resource or it will not work. Other critical factors:
Compensation Planning: Compensation for agents is generally all-commission based and numerous plans can be designed. The best that I know of is to pay a percentage of the first year’s storage revenue in increments over a 12- month period. The first payment is paid the month after the sale and the last payment is paid on the 12th of the month. Agents are paid a fixed amount based on the total amount of storage after month one. If you would like further details or a spreadsheet that may help you plan this, drop me a line.
Training: You must train the agent in your products and services; the rules are set by you. Pricing issues must be clear, and contracting should be reserved to owners, never to the sales representative.
Definition: An “Agent Sales Force” is a carefully selected group of sales representative that are already marketing other products and services in your marketplace. Their sales expertise must be related to your product or services but not competitive to it. Their client base must be business to business only. These sales representatives will generate storage volume and revenue at an unexpected rate.
Expenses: It is appropriate to pay the agent sales rep reasonable expenses. A gasoline and cell phone allowance is normal and a great incentive to please them. Monitor the amount and tie it to sales volume.
Management: Three rules of outsourcing are: Agents must do the task better than you could, less expensively and with you in the manager’s seat. Management is the most important factor: Never abdicate management in any business function. Finally, don’t forget the meaning of management means “measure to expectations.”
Contracting Strategic Partnering Agreement:Never hire an agent sales representative without a clear agreement. (For a generic strategic partnering agreement, e-mail me at firstname.lastname@example.org).
Terms and Conditions: This is the scope of work and it defines the expectations, terms and conditions of the selling process, and the method of compensation. Make them clear and concise, and have it signed by both parties. Assign yourself termination capability at any time during the term of the agreement.
Cary F. McGovern is the principal of FileMan Records Management, which offers full-service assistance for commercial records-storage startups and sales training in commercial records-management operations. For additional information about the selection of sales representatives, compensation strategy, sales training, sales management training, records-storage start-up training or a risk-free 90-minute phone consultation regarding entry into records storage, call 877.FILEMAN; e-mail email@example.com; visit www.fileman.com.