I was speaking recently to a company that is considering moving to an independent sales reps force from a salaried w-2 sales force. “I want to ensure that we don’t compromise our high sales standards nor incentivize the independent sales reps to wander into ethical territory that is inappropriate or just wrong,” the company representative said to me.
“So, your concern is that your independent sales reps team may not share the high ethical standards that you’ve created at your company and with your current sales team,” I responded.
“Yes, I suppose that’s it,” she said.
Wow. The notion that an independent sales reps force is somehow ‘less ethical’ than a traditional sales force…wow. I can’t even really wrap my head around that. But just for grins, let’s take that notion apart. Maybe there are more companies that share this misconception. So let’s get this on the record once and for all.
In general, there are two broad categories of Independent Sales Reps:
1) Relatively new/inexperienced independent sales reps who are just building a pipeline
2) Experienced and Successful Independent Sales Reps
Working with new/inexperienced anybody is a little bit of a crap shoot. Everybody starts there; nobody wants to be there for very long. With independent sales, reps CAN’T be in that stage very long…because they aren’t making any money at that stage. If they don’t quickly learn so they can move to the ‘experienced’ category, then they just can’t last.
In any industry. If you hire from category #1, there are few certainties about the outcomes. With independent sales, the certainty is that the rep is either highly motivated to get out of that stage, or he’s going to fail. And the outcome won’t take long to show itself.
Working with #2 is a whole different story. If the independent sales reps that you contract with are currently serving other companies and doing well, then you know that:
1) He/She is self-motivated
2) He/She is a great time manager
3) He/She is making enough money to support himself/herself on commissions only
4) He/She is able to see a way to make money with your product too
The successful independent sales rep knows that spending energy (in his work life) on anything other than directly or indirectly making money is just a silly waste of time. Trying to motivate an Independent sales rep to fill out 3 different versions of the same paperwork is a great example. He’s probably just not going to do it. He’ll find a new product to represent before he’ll spend much time on non-efficient processes. He needs to sell to eat. The correlation is direct and clear. There is no noise or artifact that confuses the issue. The successful independent sales rep needs to sell a bunch of stuff. Everyday. All. The. Time.
The salaried sales rep generally sees his primary job as fulfilling the needs of his management. He wants to be a great employee and get a great review. That may or may not be the same as ‘sell a bunch of stuff’.
So if the independent sales reps want to sell stuff and the salaried sales rep wants to make his management happy (and so much the better if that includes selling a bunch of stuff)…how can it possibly be an ethical dilemma? One group is motivated to help the company make more money, so they can make more commission. The other group is motivated to help the company by doing whatever management said to do.
Independent sales reps make no money if they don’t close the sale. But sometimes salaried representatives make money for other reasons; for calling on more prospects, going to more trade shows, even for using their whole expense account for prospect lunches and dinners. So who exactly is really more likely to ‘game’ the system?
Where’s the ethical dilemma or compromised ethical position with Independent Sales Reps?
Here’s the truth; there isn’t one.
There are, unfortunately, unethical people in all industries and walks-of-life. Sales – independent or salaried – certainly has its share. But the notion of ethics being tied to one ideology or the other is like saying, “Those Ohioans; they can be an unethical crowd. Better off sticking with Iowans.” Really? No. That’s just silly. I can think of more adjectives, but we’ll just stick with ‘silly’ for now.