Salespeople on commission?

[Robert Lambie]

you have to be careful on what you offer as way of a percentage on a sale. i.e. do you earn the same profit margin selling a neon sign to vehicle livery?
do NOT pay them until invoice has been paid. getting sales is easy part, getting paid isn’t.
if they are freelance and possibly sell stuff for other companies then why give them a basic wage? if they work full time for you then a small basic and commission, or commission only is a good way of working.
do not let them answer your phones… phone hogging is common, they will sit doing nothing till phone rings… then go out and get sales that you would probably have got yourself and made more money from. at the end of the day, if the phone rings its a result of your own reputation or money spent on advertising.
they should be chasing new customers and getting accounts open for the big ones.
having a sales rep is a good thing, it frees up more of your time for making/fitting the signs and more work can be taken on. however, there is allot of downsides to it too…
be careful!

[Les Woods]

Hi Joe, I agree with what Robert said and would like to add a point which would make me think seriously about taking on a sales rep – and it’s based on experience.

One of our suppliers (a litho printer) had a great rep who handled all of our work – he was really good, a great laugh and brought a load of work into that company. Then he left. Before he left he went through all of the companies he dealt with and took most of them with him to the new company. That’s a lot of customers to lose.

The moral of that story is this: if you do take on a salesperson, don’t let them work too closely with the client – they’ll build up the rapport, not you.

If you do use a sales person, get them to chase up leads and bring in orders, but make sure you’re the one to build up the rapport and with that you’ll get client loyalty.

[Sarandaz]

Hi Joe have look on this site.
http://www.sales-agents.com/
I didnt use personaly any freelance agent but one of my friend did, And smething he told me that he is useing two sales agents on commission but before hiring he dose make sure that they are old enough to start their own business, and they only work in feild.once they got an order and then you should be the contact person for that customer.Your sles agent shouldnot allowed to make further deals.

serandaz

[Shane Drew]

We had a rep work for us many years ago. We kept a pretty close eye on the clients relationships with the rep, and always made sure we were accessable to any client. We’d always touch base when we could.

That said, he got head hunted by an opposition company who paid him higher commissions and a better retainer, on the condition he took his/our customers with him.

On the day he left, a Friday, he rang our best clients and told them we were about to go under, and that he’d decided to leave before the crash and go to another company. He offered to take their business with him so they wouldn’t be disadvantaged. 30% agreed to follow him.

His prediction of us going under nearly came true. To lose a 3rd of your business overnight is not nice. We survived by sacking a heap of staff.

Would have sued him but no one was prepared to say anything ‘officially’ and didn’t want to get involved.

I’d be careful mate, not much ethics out there I’m afraid. Loyalty is a thing of the past I’ve found. 🙁

[Daniel Gillen]

Very good advice from everyone above.

Our company has also had instances where reps have been head hunted and then taken a print out of the complete client list with them on their way out the door.. 😮

For a small business its quite risky.. IMO.

[Phill Fenton]

We used to have a tele sales women who rang up companies on our behalf and made appointments for me to call in and visit those who were interested in our service. She was paid a commision on the first sale we got from each new customer as a result. This worked very well for us. In fact our biggest single customer who provides regular repeat business was found this way.

I would certainly agree that you need to remain the face of your company – not your sales rep as they are likely to take customers with them if they leave.

Many freelance sales people work in a range of fields selling a range of different products for different companies. They are not employed directly by you – merely paid a retainer and commission. You remain the main contact person in your business – they do the hard bit by generating new leads and get paid according to results

[Colin Aburrow]

Hi

I have been thinking about getting someone to set up new business appointment on my behalf but really have no idea of what sort of commission would be fair. A percentage of first sale sound a good way to go but perhaps it should be linked to gross profit as you do not make the same profit on each job or per converted lead. "but how much" Sounds like a minefield but would certainly help build a stable client base.

Colin

[Kevin Flowers]

Hi all
have a contract drawn up that does not allow for them to approach your customers for a set period of time once they have ceased working for you or on your behalf, (be it a Rep or Employee) This is standard practice in sales industry, obviously after this time they are free to approach your customers but can’t pull stunts as in Shanes case & after that set period of time it is just the same as you having to compete with any other company.

Kev

[Les Woods]

Kev’s advice is perfect – in the design industry we use NDA (Non Disclosure Agreements) which is legally binding and says the do’s and don’ts for working with you.

Generally you put in a clause saying Mr D Salesperson is not permitted to contact Your Company’ clients for a period of XX months/years and that any company confidential material (i.e. sales & invoice info etc) to which Mr D Salesperson comes into contact with may not be disclosed at all.

Here’s a link to business forms which are more related to web and graphic design but could easily be tweaked for the sign industry. You may want a solicitor to give it the once over to check its legit before using it though. :lol1:

http://yay.kenwallacedesign.com/resources/Business/Entrepreneur/index.html