How Companies Use Sales Reps to Absorb Their Selling Costs

This is going to touch a lot of nerves out there but yesterday I wrote of a Sales Rep from Xerox cold-calling my office.  During that rant I mentioned briefly that some companies force their reps to make cold-calls because it reduces the company’s costs.

I didn’t really elaborate on this because it wasn’t pertinent to what I was talking about.  However, after receiving a number of comments relating to that point in the article, I feel I should explain what I meant.

It is my belief that a company should provide its sales people with qualified leads on a regular basis.  In fact,  I would go so far as to say that the company should be responsible for setting the appointments for the reps so they need only show up and close the deal.

I know that a lot of you old-school sales guys out there are gritting your teeth and calling me a number of names that may or may not rhyme with “wussy” but hear me out.  First of all, sales prospecting and selling are two different jobs.  Generally speaking, someone that is good at one is not very good at the other and vice-versa.  Secondly, why would you want your highly-trained, professional salespeople (Xerox as an example) wasting their time pounding the pavement and dialing through 50 rejections to set one appointment when they could be selling and making your company gobs and gobs of money?

I’ll tell you why companies do this - and this is the controversial part.  They do it so that they can transfer the costs of sales prospecting and the accountability of sales figures solely on to their sales reps.  Everyone knows that there is a cost associated with finding and qualifying a new customers, right?  Depending on your market that cost can range from a few dollars to thousands of dollars.  But if a sales rep is compensated on commission, what are the costs of prospecting to the company?  Practically nothing.

Then when sales are down, who gets blamed?  The sales reps, of course.  Why wouldn’t they be blamed?  They are responsible for every aspect of the sales cycle from finding the prospects to closing the sales.  If sales are down, it is only natural that they feel the wrath of those in the ivory tower.

What is the solution?  The company must create a lead generation system that finds and qualifies sales prospects on a regular basis.  This alleviates the pressure and stress on their sales reps and more importantly, allows the reps to focus on what they should do best.  If a system is in place that allows them to spend their majority of time in front of qualified prospects and sales are still not there, then they can be accountable.  Yeah, it’ll cost the company a little more to set this system up but the long-term benefits of a huge jump in sales and a happy, productive sales team will far outweigh those costs.

Of course, this is still a pipe dream for many sales reps as they continue to hammer away on the phones.  That is why I so strongly promote that they create their own marketing system to find and qualify prospects.  Ideally, this should be their company’s responsibility but if they don’t step up then the individual must create his own solution.

For the sake of his job… and his sanity.