Post Link: What Motivates Sales Reps: Salaried vs. Independent

What Motivates Sales Reps: Salaried vs. Independent

It's our very first Guest Post Day here on the Breaking Up With Paper blog. We're so excitedto have guest contributors sharing their experience and expertise. Our first contributor is AliceErrett, founder of RepRight, a company that matches vendors with independent sales reps.

Currently trying to decide between building an in-house sales team and hiring an independentrep firm?

There are obvious differences in the structure of a salaried sales team versus an independentsales force that’s strictly pay-for-performance. To put it simply, independent salesrepresentatives usually rep multiple brands and work on their own rather than as part of a largerteam.

As you may imagine, the pay-for-performance model fosters distinct attitudes and behaviors.Generally, the actions of an independent rep are often characterized by the desire to close adeal above all else. While of course this approach has its benefits, there are always pros andcons to any arrangement. Here are three key areas in which the motivations and practices ofsalaried and independent reps vary widely.

What Motivates Sales Reps?

1. Compensation

Salaried sales reps obviously receive a salary--guaranteed compensation, often with a kicker ifgoals are achieved. Salaried reps have less income thrashing, which translates into a moredirect ability to focus on the needs of the prospect or customer. Their motivations are also oftenbased on how their performance compares to that of other team members.

Independent reps are paid generally when two conditions both exist: 1) when they make asale, and 2) when the customer pays. Sometimes those actions are conjoined and sometimesthey aren’t. The independent reps’ compensation depends upon every step along the cycle,from marketing to selling to collections, and their commission is what drives them.

Independent reps’ commissions may be a bit higher, but companies that employ them aretaking on relatively less risk, since these reps don’t receive compensation until they startproducing revenue.

2. Relationship with Management

Salaried sales reps are usually focused on meeting the demands of their management, whosets concrete goals that the reps must work to achieve. The management, in turn, needs tomake sure that reps are using their paid time efficiently, which results in more meetings, phonecalls, reporting and other administrative functions...all in an effort to ensure that the sales teamis performing in a desired manner.

Independent sales reps are laser-focused on sales and ensuring customer payments. Theyare usually not particularly interested in sales meetings and not particularly good at ancillaryreporting. Independent sales reps are also fiercely protective of their core selling times anddays. (Want to drive an independent sales rep crazy? Call a 2-hour sales meeting on Tuesdayat 10:00 AM.)

Management often complains that independent sales reps aren’t responsive, don’t return callsin a timely fashion, and are prone to missing management/staff calls and meetings.

While this is indeed true, it’s largely because independent sales reps are focused only onselling. If two phones are ringing, one with a manager’s pre-scheduled call to discuss a salesplan and the other with a hot prospect, most (good) independent sales reps will answer theprospect call first, then call later and apologize to the sales manager for missing the meeting.

3. Relationship with Co-Workers

Salaried sales reps often help each other reach goals as a core requirement. Most salariedsales reps enjoy the idea of working together to achieve great outcomes--an attitude thatpromotes teamwork but can also inadvertently allow stronger sales reps to carry the load for theothers.

Independent sales reps are a fiercely independent bunch and tend not to be great teamplayers. Their motivations stem from their own individual goals rather than a group goal. That’snot to say that independent sales reps won’t help out their co-workers, but they do it on their

own terms.

Understanding what motivates sales reps--whether they're salaried or independent--can helpyou make a more informed decision about what kind of sales team works best for your currentsituation, business goals, and corporate culture. If you’re a sales rep, independent rep, or salesmanager with further insights to share, let us know in the comments below!

About the Author: Alice Errett owns RepRight, a company that matches independent salesrepresentatives with growing companies. RepRight's clients list independent sales opportunitieson RepRight's job board to ask them to recruit through their Matchmakerprogram. RepRight.com

Post originally locatedat: www.handshake.com/blog/what-motivates-sales-reps-salaried-independent

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