Published July 25, 2011
Growing to the point where an entrepreneur can no longer handle the sales process should be a joyful milestone, but the opportunity to rejoice is often overshadowed by the stress of finding the right person to bring in new business.
Often in these cases, the company is not ready to hire a full-time sales maverick and, therefore, must rely on an outside sales force.
“It only makes sense to outsource if you can find somebody that does it better, cheaper, or faster than you do,” said business consultant Brad Ness, “Unless you really know what you want and how you are going to manage it, it can be very difficult to find the right resource.”
Knowing what you want means having a clear understanding of what you are looking for in a sales person and how much ownership of the process you’re willing to give up.
“Is the business owner looking for a hunter that goes out and generates new leads or looking for a farmer that tends to the existing customer base?” asked Ness.
Jenny Vance, president and co-founder of LeadJen, recommended outsourcing the most tactical thing first. “It is hard to transition the sales process to someone else, but there are pieces that can translate easily. She recommends entrepreneurs ask themselves, “‘what pieces do I want to get off my plate first?’ Look for admin-heavy roles that require a lot less overall knowledge.”
Building trust and consensus is imperative to growing a healthy relationship with an outside sales team. “Since many independent sales professionals and firms carry several non-competing lines, it’s difficult, at best, to know what percentage of sales time and energy goes into your product or service compared to others that compete for the sales rep’s time and attention,” warned business coach John Carroll.
He advised entrepreneurs to sell the outside sales force on the product and set the “objective to over communicate, particularly early in the relationship so that when you fall short of the target occasionally, the message still gets through.”
At external sales company Milsal Partners, the team brainstorms with business owners to determine the market. “We make a list of the potential market and have researchers find contacts within that industry,” said founder Taylor Milsal. “From there, our writer will create a sales deck and e-mails to pitch the individual. We have a person on the phone making the connection and a quarterback for the team who leads the effort.”
Beyond closing a sale, the entrepreneur should also use this sales force to learn about potential customers. “We ask our clients ‘what are some questions you want to better understand about the industry and are there different messaging strategies you want to test?’” said Vance of LeadJen.
The payment structure for an outside sales team varies with the type of sale and service the team is providing. “It is very difficult to get someone in a sales role and work at 100% commission. Compensation needs to develop based on results,” recommended consultant Brad Ness. “If a product has a long lead time, then determine what activity early on can help develop customers down the line. And don’t set performance based on sales, but on something earlier in the process.”
A long lead time not only makes compensation tricky, it also can drive a business owner to make hasty decisions.
“When [enterpreneurs] hire somebody, give them enough time to be successful,” advised Milsal of Milsal Partners. “Frequently we create a business plan that the entrepreneur likes and then find that it takes three months to get a meeting with the person.”
As with any contract, there are legal liabilities that the entrepreneur should guard against. Consumer attorney Troy Doucet warned, “If you hire a third party to make marketing calls for you, make sure they don't use a pre-recorded voice to deliver a message before a live operator comes on the phone. These kinds of calls violate the Telephone Consumer Protection Act (TCPA).”
Doucet also recommended entrepreneurs ensure that the external sales companies have the proper licenses to conduct business in that state, are following the appropriate consumer protection laws and are insured.