many startups and growth companies believe that they can get the same results for less money by using independent, commission based, sales agents. While alluring, it is not as easy as it sounds.

1. Selling via Independent Sales
Agents
A good solution for Startups and
Small Businesses?
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2. The Purpose of a Business is to Create a
Customer – Peter Drucker
Many great products and services fail because they do not have
customers. It is probably the biggest single reason for failure.
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3. “Build a Better Mousetrap and the World will beat
a Path to your Door! NOT!
• Customers are satisfied with what they have – they have learned how
to make the best of it
• Customers have relationships or contracts with existing suppliers
• Customers know that change can be disruptive
• Absolute cost may be more important than quality or value
• Many other businesses are trying to sell to the same customer you
are, so prospects are overwhelmed
• There may be a slow and cumbersome purchasing process in place
• They may not believe what you say, even if you get to talk to them
• Selling and marketing are essential
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4. Selling is expensive. How do I save money?
• Small companies cannot afford really skilled sales people
• Most sales people are mere order takers rather than new business
developers
• So, using an independent sales agent, whether a broker
(compensated by commission) or distributor (takes ownership of
the good) is one apparently obvious solution
• However, it is complex and far from easy
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5. Issues with Independent Sales Agents
• They are independent business people who do not report to you
• Their relationships with customers are long term and enduring,
whereas their relationship with you may be transient. Their loyalty is
to that relationship, which they will not risk.
• You may be a small part of their revenue, so they will not risk other
revenue for you
• If you get to be a large part of their revenue, they will feel vulnerable
and use the money they make from you, to build other clients
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6. At each end, the Sales Agent reduces efforts
Effort given
by sales
agent
0% of Agent’s
Revenue
100% of Agent’s
revenue
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7. You know your product far better than any
agent.
• They do not know the product as well as you do
• They do not have passion for the product or service
• They can make introductions for you
• They are often good at taking repeat orders and routine servicing of
the customer
• They will be less likely to push or rock the boat than the business’s
own management.
• Business owners and executives have to take responsibility for initial
sales, with the agent acting as support.
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8. How to use Independent Sales Agents
• Companies that succeed with Independent Sales Agents:
• Manage the Sales Agents closely – training, setting goals, incentive
compensation, etc
• Major Sales Calls are led by Company executives, often assigned
Sales Managers as the company becomes larger
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9. Summary
• It is essential to have a product that meets current or potential needs
of the identified target market.
• The Pricing has to be in accord with Perceived Value
• The Marketing message has to be meaningful, relevant, and
differentiated
• There has to be evidence to support claims: test results; customer
references; reviews; proof of concept test process offered
• But reaching to prospects, and convincing them to try and buy, is the
responsibility of the executives of the company.
• Teach yourself to sell: see books listed in the Appendix
(C) 2021 Max Brand Equity, Inc.