Factsheet – Should I Set Targets for Sales Agents?

Managing self-employed sales agents is not like managing an employed sales team. Three questions come up again and again: should you set targets, should you demand reporting, and how simple should you keep things? The common thread runs through all three: sales agents are self-employed, and cannot be managed as though they work for you.

Should you set targets for sales agents?

Targets are a prickly issue. What basis do you use to establish targets for self-employed commission-only sales agents that are fair and achievable? Target setting traditionally lies in the domain of the salaried salesforce, which most sales agents have left behind for good. Sales agents set their own agenda, and essentially cannot be told what to do. The setting of “targets” may therefore be met with something between passive agreement and total rejection. Either way, the likely net result is that your targets are completely ignored.

Most sales agents are happy to have left behind their repping days, with managers often breathing down their necks. Now they are self-employed, so they will want to work to the beat of their own drum, not yours. Trying to impose such management techniques is more likely to rub them up the wrong way, and therefore be counter-productive.

If you really must have targets, the best way to set them is by negotiation directly with each individual sales agent: take a more co-operative approach. This involves arriving at goals by getting the sales agent to suggest estimates of what is possible and what they would like to achieve in certain timeframes. If you think these are reasonable, you agree them, and work with the sales agent towards achieving them.
Part of our pre-interview profiling procedure involves asking sales agents about their potential way in advance of this stage. At that earlier point a sales agent might have been selling himself to you, and possibly exaggerating the size and potential of his customer base. When it comes to agreeing goals, a savvy sales agent may have a tendency to do just the opposite. This position can be used to your advantage, leveraging more ambitious goals that might be nearer to your own requirements.

You may also find that self-employed commission-only sales reps will refuse to sign agency agreements that stipulate targets, for fear of being terminated if they are not achieved (which, by the way, is usually not grounds for legal termination, but sales agents may not know this). Achievement of targets may indeed be outside the sales agent’s control, and targets may not be fair or realistic in the first place.
To sum up: targets are best avoided, especially in the early years of a sales agency.

Should you demand reporting?

Sales agents generally do not take enthusiastically to any non-commission-earning activities, unless they are being paid for them. It is quite common for companies new to working with sales agents to expect them to behave like employees, and to expect diligently prepared paperwork (such as credit account forms, references, site surveys and the like) with reporting that is frequent and of a high standard. Be prepared for resistance.

Sales agents will generally regard reporting as a non-commission-earning activity, and therefore not part of their remit. You may find you have to get paperwork completed by head office staff, and that reporting defaults to evening verbal reports by phone, where you have to call them. Sales agents may also resist telling you where they have been and who they have spoken to, and particularly where they are going tomorrow or next week. This they regard as their business, not yours. They may also not want to give direct feedback on customer reactions and comments.
The only way to guarantee reporting from a sales agent is to pay them a retainer or fee, and make this conditional on reporting.

Keep it simple: the management mantra

In general, Keep It Simple is an overriding principle when dealing with agents. Simple is good. Simple products and services are always best for sales agents. Self-employed commission-only sales agents tend to work best with simple products and arrangements. Complexity can kill.

If you have a complex offering, try to rationalise it as much as possible. Once a sales agent has achieved some success, and therefore gained confidence, you might consider broadening the range. Complex situations often require a lot of training, which is not usually popular with self-employed commission-only sales reps, as it takes them away from selling (or home) for long periods.

Complexity may also require an unrealistic share of the sales agent’s brain space. If the range is too wide, or the product or service too complex to start with, the sales agent may not remember enough of the essential facts to make an effective sales presentation. Remember that the typical sales agent has several other principals’ ranges, policies and prices to hold in mind too. Offering the option to act as an introducer agent can further reduce the problems of complexity.

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