CommissionCrowd Blog - The Home Of Independent Self-Employed Sales
CommissionCrowd Blog - The Home Of Independent Self-Employed Sales

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Ryan Mattock
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Co-Founder of CommissionCrowd... Let's get disruptive!

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CommissionCrowd Blog - The Home Of Independent Self-Employed Sales

4.5 Mistakes We Made When Building A Commission-Only Sales Team And How to Avoid Them

Ryan MattockRyan Mattock

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how to build a commission-only sales team

I’ve set out to write this post to help companies learn as much as possible about the mistakes we made back when we were first time Principals, recruiting, training, managing and retaining independent sales reps for our sales team. And since we began developing CommissionCrowd we’ve spoken to a lot of freelance sales agents across the globe and in every industry, and they continue to tell us that many first time and even seasoned Principals still get the basics wrong.

If you’re serious about building a successful and sustainable commission-only sales team, then we recommend this post to save yourself valuable time, energy and above all sanity.

Learn How CommissionCrowd Can Help Your Company Build And Manage A Successful Commission-Only Sales Team

If you're a company looking to build a successful commission-only sales team for your business, then you're in the right place. Learn more about how we can help you: CommissionCrowd for companies

Our First Experience Of Building An Outsourced Sales Team

Let us take you on a journey … [cue dreamy fade-out and flashback]

Before CommissionCrowd was even a twinkle in our eye we ran another company that required us to build an outsourced sales team. We went into the process blind, having no idea how to find, train and manage a team of self-employed sales reps. Above all else we didn’t know what was required to create long term successful working relationships specifically with this type of sales partner.

In the first few months we somehow managed to scrape together a team by trial and error (as you know, the hardest part is finding truly great agents), then train them (to the best of our ability), and then bring them up-to-speed with our products and services so that they could start selling with confidence.

We were impressed and excited by the calibre of professional sales reps who saw the potential in our company and products, but by the end of the first quarter we had found, trained and lost over 50 of them. I’m not sure if I can properly express our frustration and angst. Many articles will try and make you believe that this is the nature of the industry, but with the power of hindsight we can safely say those first 50 agents could have completely transformed our business.

We had failed them because of our inexperience in running a successful outsourced sales team, and they were right to leave us.

Boy did we learn from our mistakes. What became very apparent to us during this time is that there are a huge number of self-employed sales professionals out there looking for truly great companies to work with. It’s not an urban myth, it’s a fact, but it takes much more than an attractive sounding proposition to build and maintain a mutually successful working relationship.

This is the reason we’re launching CommissionCrowd: we know that both sides of the relationship need more than just the ability to connect. You also need the tools to manage multiple remote working relationships effectively.

We Made The Following Mistakes So You Don’t Have To

We want to share with you some of the reasons why we had difficulties in retaining self-employed sales agents even though many of them were experienced and enthusiastic about working with us. Taking note of these should help you be prepared when it’s time to build your own outsourced sales team using CommissionCrowd. If you’ve had any experiences of your own and wish to add to the list then please share your comments with us at the bottom of the post.

1. We didn’t understand independent sales agents in our last business

Simply put, at that time we didn’t have a clue what a self-employed sales agent was or why they were willing to work without a wage. The realisation that there were people out there who would work for 'free’ excited us to no end. Was it possible that we could we actually build a sales force for our company without having to pay for it!?

What quickly became apparent and was further ingrained over the years is that there is still a fundamental lack of understanding on the part of companies looking to outsource their sales requirements, and we were no different. Stereotypes of cheap or free labour are still widespread, and there are many companies still unsure whether there is even such a thing as a top performing self employed sales rep. I mean, why on earth would a successful sales agent not be able to find employment and command a large basic wage, right? And are they really so desperate for work that they are willing to work for free?

It’s simply a matter of choice

The very first thing you need to understand is that self employed sales representatives choose to be in business for themselves. Every day they tell us they have a desire to work independently, have entrepreneurial drive and a passion to be in charge of their own destiny. This type of sales professional has absolutely no desire whatsoever to work for a company as an employee.

We recently interviewed Keith Crispin, a self employed sales rep with over 30 years experience, and asked: “What was the reason you decided to become a self-employed/freelance sales agent?” To which he replied: “Several reasons really – certainly the desire to use my professional contacts to earn more, but also I like the freedom to be in charge of my own destiny.”

Think of it like this

Independent sales reps offer their expertise as a service. The same can be said of any service based company set up by any hardworking business minded entrepreneur. Think about a time that your company may have used the services of an independent accountant or legal professional where you paid on completion of services provided. These professionals aim to build a portfolio of companies they work with in exactly the same way that professional self employed sales agents do.

So what do most independent sales reps look for in an opportunity?

In our experience, most independent sales reps are either looking to work with established companies that have great products and services and have a proven track record, or on the flip-side may even seek out potentially lucrative opportunities with exciting newer companies that have truly great products and services to offer. Ultimately they are looking for long term partnerships and an opportunity for mutual growth. A company will rarely even get to the stage of discussing potential performance based earnings until the sales rep has been sold on the company, its long term goals and commitment to its reps.

2. We had poor training and support processes in place

To say our training processes at that time were poor is probably the understatement of the century. We were so focused on getting as many sales agents on our team as possible that we didn’t even notice when the first lot started dropping out. In our eyes if someone dropped out it was because they couldn’t sell not because there was anything wrong from our end. I mean, our products and services were great, so surely it couldn’t be our fault. We were so focused on the numbers instead of taking care of the people that we had turned our opportunity into a revolving door.

Take care of training and support and your sales agents will take care of you

It’s incredibly important to remember that there will always be an investment of time and effort required when working with independent sales reps. You must think about your company’s training and support structures. How will your sales reps learn about your company, products, methods of communication and customer account management processes? Your sales team must feel supported or they will look for it elsewhere.

CommissionCrowd will help to streamline this process by giving companies the functionality to upload and distribute training documentation, client take on forms, proposals and other marketing collateral, as well as being able to communicate in real-time and collaborate on customer accounts and leads. However, it is up to the company to spend time thinking about and creating the marketing and training content that will arm your outsourced sales force.

In a nutshell: If you can’t do the time, don’t expect to climb! (Finally, a quote to call my own!)

It doesn’t have to be complicated

It certainly doesn’t have to be a complicated process. Some companies might prefer to go the more traditional route and invite their sales agents to train over the phone, Skype or even spend some time in the company office however, you may wish to create a training program in the form of a 'PowerPoint’ presentation or similar. Remember you will have space within your CommissionCrowd account to upload and securely store all of your training materials and important documents and will also have the ability to share these with your sales reps easily.

Or why not get creative

How about creating a short video series and uploading to to a company YouTube account. Remember, you can always make your videos private, meaning that only those with the link can view them. You can simply create a document containing your video links and will then be able to send them to sales reps that connect with you.

How to set up a private YouTube channel for training independent sales reps

If you need some help setting up a completely private company YouTube channel to upload your training videos, the following links will help:

This guide will show you how to set up a YouTube channel for your company

This guide will show you how to set your YouTube video privacy settings

If you need to record your computer screen you could use a tool like Screen-Cast-O-Matic that will then allow you to upload your finished video directly to your YouTube account. Or simply use a camera to film what you need and then upload to your channel directly.

The important takeaway point: It’s crucial to remember that time equals money, therefore there will always be a cost involved in building an outsourced sales team. It is a commitment that can’t be taken lightly if you are to succeed. If you are not willing to invest in the ongoing training and support of your sales reps then you will lose them or simply not have an attractive enough proposition to interest them in the first place.

3. Withholding or paying commissions late

A huge no no! Actually we weren’t too bad with this ourselves but we have to include this potential mistake as it’s one of the main reasons fed back to us by sales reps as to why they will leave an opportunity quicker than you can blink.

Here’s an excerpt taken from a conversation we had with a highly successful independent sales rep recently:

“Whilst I did very well, sadly the company were very disorganised, kept either withholding or messing up commission payments and didn’t offer the greatest of support, so I decided to leave them to go to another similar company. So whilst I want a self-employed sales role and want to build my own team, I also want to work for a reputable organisation”.

Transparency and honesty are two important values that professional self employed sales agents expect from companies that they have working relations with. Always pay commissions owed on time and never withhold or delay payments unnecessarily. Again, CommissionCrowd will be addressing this issue by allowing both parties to monitor and track closed deals and making it easy to pay your sales reps from directly within your company account according to payment terms agreed within your contracted arrangement.

4. We undervalued our sales reps expertise and the amount of time they dedicated to our company

Ok, so this was another lesson we learned the hard way. Learning this lesson early made the difference between losing 50 sales reps and not a hell of a lot more. We needed to learn and appreciate the true value that independent sales representatives bring to an opportunity, and what that was worth to us as a company. We didn’t set out to be deliberately greedy, we were just a little naive, and failed to think about building sustainable partnerships.

A lack of decent opportunities?

We are consistently told that there are a lack of genuinely good opportunities available for self employed sales reps. Why is this the case? All you have to do is search on Google for a term like 'self employed sales jobs’ or 'commission only sales jobs’ and you are presented with numerous generic job sites that list thousands of 'opportunities’ aimed at self employed sales people.

So why do self-employed sales agents that are looking for great opportunities struggle to find them?

It’s simple: if you undervalue the importance of your self-employed sales reps then surely you don’t understand what makes for an attractive opportunity. All you need to do is have a look at some of the mainstream job sites out there and it quickly becomes apparent that many companies are simply looking for cheap or free labour. They won’t find it and will ultimately fail over and over again. Or worse, perpetuate a negative and ignorant view of the pay-on-performance industry.

We refuse to allow CommissionCrowd to become another one of these sites, and our ultimate goal is to create a resource where professional self-employed sales agents can come to find truly great opportunities without having to sift through a never ending sea of poor quality opportunities.

How to think about your commission structure

Companies do not have to pay wages or company benefits, you don’t have to contribute to pensions or pay expenses (unless the sales rep states that reimbursement for expenses is a requirement) so you should offer as much commission as your company can afford on each deal. Now, we are fully aware that every company/opportunity will be different but if you can, offer a residual (repeat) recurring commission on any new business that comes from a deal that the sales rep initially closed, including paying a commission on all up or cross selling activities that come from business initially closed by the sales rep. If you think of your outsourced sales team as a mutually beneficial partnership you are on the right track.

It’s like they say in the Dragon’s Den: “What would you prefer, 50% of nothing or 50% of everything?”

Don’t be greedy. Give as much as you can whilst still making a healthy profit; the point is that you should be partners in profit which means everyone should be making money.

5. Our internal and external marketing materials and activity were sub-standard

When our agents started calling us asking for marketing literature to send to prospects, we didn’t have anything prepared, which in turn delayed the sales process unnecessarily. This frustrated our reps and endangered potential new business.

Leads

While some independent sales reps require leads, many are quite happy prospecting on their own accord. But you cannot rely on this. Sending qualified leads to your sales reps will not only cut down time spent away from nurturing existing leads, but help to increase the efficiency of your sales team. Is your company actively marketing across social channels? Are you willing to send inbound leads to your outsourced sales reps? At the very least a company should have invested time in creating proper sales and marketing materials that will allow your sales agents to do their job professionally when speaking with prospective clients.

Learn How CommissionCrowd Can Help Your Company Build And Manage A Successful Commission-Only Sales Team

If you are a company looking to build a successful commission-only sales team for your business, then you're in the right place. Learn more about how we can help you: CommissionCrowd for companies

Ryan Mattock
Author

Ryan Mattock

Co-Founder of CommissionCrowd... Let's get disruptive!

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