“The fish sees the bait not the hook.” Chinese Proverb
It is a dream of many entrepreneurs to have a sales team of go-getters that can burn up the territory and bring home the bacon, so to speak. It is a wonderful feeling to find purchase orders in your morning mail as well as a steady traffic in phone calls from your sales force. It can be euphoric for a new entrepreneur. But when the postal worker stuffs only bills in your mailbox and no one is phoning, you may well feel discouraged and fearful.
Let me tell you about Sam and his struggle to put together a sales organization. His trip to China was a success as he had negotiated the United States marketing and distribution rights for a line of flat screen computer monitors featuring the latest technology. Yet, he was nervous; he had agreed to buy a substantial inventory. In doing so, he was risking all of his financial resources, including his home equity, to start his new venture. Now he must find salespeople-as soon as possible.
As his former employer used independent commission sales agents, so would he. Working under pressure, within a month, he signed sales agreements with enough sales agents to cover the majority of the market. Some of his agents were just starting out and “hungry” for product to sell. Even though all his agents represented other companies as well, they assured him that his products would receive their full attention. He felt good. Everything seemed to be in place.
As the first shipment of inventory was due any day, he was eager for his first month of sales activity. But, it did not happen. When the phone rang, it usually was a request for samples, lower prices, or special credit arrangements. The few sales orders that Sam did get were small. It was discouraging. When he’d call members of his sales team, asking about the lack of business, an agent’s usual response, was: “It takes time. I have a few things in the works. Don’t worry about it. Besides the market is slow right now.”
Frustrated and nervous, he became impatient and started yelling and berating his sales agents, accusing them of not being able to sell anything. When the situation failed to change, Sam became despondent and threatened to “fire” the lot of them.
Shipments of inventory continued to arrive from China, adding to Sam’s anxiety. Not knowing what to do about the small trickle of sales orders, he sought the advice of business friends. They suggested he go on sales calls with his agents to find out what was wrong. The following Monday, Sam flew to Atlanta to travel with his southern sales reps.
He returned Friday afternoon knowing he must make some changes. His agents were not as fired-up over his monitors, as he had hoped. Many agents had well-established merchandise lines that received most of their attention. He was even told by one that as Sam’s company was new, and because the product was not a well-known brand name, he could ill afford the time and effort to pioneer an unknown item, regardless of quality or price.
Back home, Sam thought about his trip, realizing that in his rush to line up sales people he did not take the time to find out what kind of sales organization he needed. He failed to grasp the difference between selling a “household” name and starting from scratch in the market with an unknown brand. He lost valuable sales time before he discovered that what you have to sell and who you are selling it to, determine the type of sales person you hire.
Sam should have asked: “Do I need independent agents or my own sales employees?
He would have discovered that sales employees, unlike agents, are working only for him, that he could direct their sales efforts any way he liked, that they are better suited for product introduction and market development than independent agents. And that allowed him control over the content of the sales message. And he did not have to compete against other products for attention. Their allegiance was only to him.
The choice to hire agents or employees should be based on management control and cash flow. I favor experienced employees, but that is a personal prejudice. Too many “reps” will take on any line of merchandise and fail to adequately attempt to aggressively sell the product. In doing so, the product line remains dormant. The “rep” has a contract, preventing anyone else selling the line; the company is blocked out of the market. And valuable sales time is lost.
If you need sales help and you are thinking about hiring a few agents, the most successful ones have a following and can provide you with a quick entrance to the market – that is, if you have a salable product. However, if you expect your “reps” to pioneer and develop a market for you, expect to be disappointed. Sam was.
Article – Copyright 2002 Dr. Paul E. Adams. Syndicated by Paradigm News, Inc.
