Editor’s note: This article was first published in December 2010, during the Spanish economic crisis. Its advice refers to Spanish employment arrangements, such as agency contracts versus registering staff with Social Security.
Looking at the current landscape of companies searching for sales reps, I see no end of mistakes in how they carry out their plans. It’s true that hiring a sales rep on an agency contract (a contrato mercantil in Spain, under which the rep is self-employed rather than on the payroll) saves the company money and, in a way, offers the reassurance that if the rep doesn’t work out, the company loses nothing. The thing is, it looks fine on paper, but in practice a company can lose a lot of money this way. Let us explain.
Some people still think a salesperson is someone who isn’t good at anything else and so ends up in sales. That view is far from reality: a sales rep worth their salt can be the key to your company. In fact, they are the face your company shows to the outside world.
There are plenty of salespeople, just as there are plenty of lawyers, but only a small percentage are competent, whether at selling or in court.
We live in difficult times, when we need to cut costs in our business but also turn to better professionals to increase our sales. A sales rep agreeing to work on commission only, or on an agency contract, doesn’t mean peace of mind for the company. Quite the opposite: if that person doesn’t work out, you’ll have to hire someone else, and then someone else again.
When your customers see a new face from your company every couple of months, you’re damaging your company’s image and, at the same time, harming its greatest asset: the customer.
What I mean is that a rep on an agency contract may come very cheap, but if that person is good and a competitor offers to put them on the payroll and register them with Social Security, you’ll lose a good salesperson and probably some customers too. In the end, what you saved with a junk contract you’ll lose in real money.
Better one happy professional than four reps working for you only because they have no other option. Never forget that.
As for the old saying that nobody in a company is indispensable, don’t believe it 100%: I’ve seen a large company end up closing because of one person. The backbone of a company that sells isn’t its admin staff, its accountant or its sales director, but the reps who show their face to customers and earn the trust that leads them to buy your company’s products and services. Once you’re clear on this point, I imagine you’ll know how to handle your sales reps’ terms better.
Further reading
- How to be a successful entrepreneur
- Common mistakes Hispanic business owners make
- Differences between Hispanic and American business owners
- The entrepreneur’s mindset
Featured image: Tim Reckmann, CC BY 2.0, via Flickr.
