Is Your Business In Part Time Sales Hell?
Hiring part-time salespeople may be the number one favourite tactic of cash-strapped B2B business owners, but if you execute it wrongly, prepare to suffer a world of hurt in your B2B sales.
As mentioned in the B2B Building A Sales Team series, business owners often do not have enough resources to put together an entire full-time sales force on fixed salaries.
So they default to hiring (sometimes) a small to large number of part time and commission-only salespeople, to handle prospecting, meeting and closing clients. This is sometimes a viable tactic, but it can pretty often devolve into Part Time Sales Hell.
Before going into what a Part Time Sales Hell situation is, we will first run through the five main characteristics of part timer and commission only salespeople. Then we shall look at how these translate into operational strengths or weaknesses.
In this case, with salesperson defined as someone who does the full sales cycle, in terms of prospecting, meeting, lead qualification and sales closing, part-time and commission-only salespeople are:
1. Low Financial Cost
2. Mercenary, Unfocused Effort
3. Limited Sales Pipeline Momentum
4. Limited Experience / Learning Curve
5. Same Management Bandwidth + Morale Issues
Broken down individually:
Low Financial Cost
This is the number one reason why business owners choose to engage part-time salespeople. Theoretically, they’re like your zerglings or mass low-cost infantry, ideally able to give you control over a large swathe of area and able to help you consolidate and hit more sales through their combined spread networks.
While it is true that they can indeed have great combined network and access to decision makers, the problem rises when you rely on a large number of these salespeople to close your sales, which I’ll cover the reasons for later.
Mercenary, Unfocused Effort
As part-time and commission-only salespeople, they by nature would usually not be dependent on your payments to them as their main livelihood. They could be a pretty broad group of people, ranging moonlighters, agents, aspiring or current business owners.
Now, what’s the common to these groups?
None of them really need you to survive.
Their main income being from elsewhere, or in the case of commission only salespeople, their ability to choose whether or not to work, make the leverage your company has to enforce quotas fairly weak.
This means that you need to either create very strong prior commitments that they’re willing to accept (which are very hard to enforce as well), or have very active management to engage and motivate them.
Limited Sales Pipeline Momentum
Being part-timers, the salespeople would generally spend a limited amount of time on sales for you, and as a result, would have fairly weak sales funnel numbers at each stage.
While this may seem fair, after all, they do it part time and just close whatever sales they can for you- in actual practice it means that part-time salespeople are far less productive, because they do not enjoy economies of scale or momentum buildup in their respective activities.
What does this mean?
If you were a full-time salesperson, you could invest in a dedicated marketing campaign or telemarketer, perhaps a landing page, sometimes an admin assistant, and people would begin to know you for the product or service you sold. Eg. James is the property man, or Jane is the CRM lady.
Lastly, because you do it every day, you gain motivation from the larger number of small wins that you get, and keep pushing yourself with single-minded focus on your specific sales goals.
So part-time salespeople sacrifice three key advantages that full-timers have:
Ø Economies of scale in marketing and other activities
Ø Personal branding as the go-to person for a specific service over time
Ø Motivation buildup over time
Limited Experience / Learning Curve
This is related to the previous point, but is a big enough issue to justify its own point. B2B salespeople need very deep product / service knowledge, and each B2B offering has its own peculiarities in sales process and dealing with clients.
Being part-timers, they naturally would not get the additional sales and productivity benefits that a full-timer would garner over time, as he learns how to best deal with certain problem clients, learns which marketing channels work best for his particular niche customers, understands and prepares for the most common objections to his offerings.
Same Management Bandwidth + Morale Issues
Finally, as part-timers, they require about the same bandwidth to manage as a full-timer, as the manager still has to spend time and effort to track, motivate and enforce performance with them.
Even worse, underperforming part time salespeople are observed closely by other members of the team. Any lapses that are unpunished by management will be taken as acceptable behaviour by full-timers and part-timers alike, and begin to propagate across your entire organisation, damaging morale and productivity across the board.
Part-Time Salesperson Real Cost Card
Financial Returns: Very Low
Financial Cost: Low To Zero
Admin Overhead: Moderate (more coordination difficulties with more pax)
Managerial Cost: Moderate (10% of manager)
Strategic Cost: Low-Moderate (dispersion of force)
Morale Cost: High (sets bad behavioural precedent for team)
Having looked at these five factors, we can see that part-time salespeople are indeed affordable on paper, and financially might seem to be a lower risk to the business.
Beware of a major hidden risk with part-time salespeople, and it’s not just about productivity.
While firstly part-time and commission-only salespeople tend to have very spotty results unless and sometimes even when offered extravagant commissions (some companies have offered double or triple commissions), the real danger to your business lies in the fifth and final characteristic of part-time salespeople.
What is that? It is that they take up the same management bandwidth of a full-timer.
A general rule of thumb is that any staff, no matter the commitment level (part-time/commission/volunteer), takes up 10% of the work capacity of a manager to manage.
In that case, there is a real, tangible cost to bringing on part-time or commission-only salespeople. How much is 10% of the time and effort of an elite B2B sales manager worth?
It can be anything from $400 to $1000 a month per part timer being handled, but that’s not all, the opportunity cost of having your sales manager dealing with part timers includes the sales that your sales manager could have closed himself with that time, when could be in the tens or hundreds of thousands.
Added to this, you have middle and senior management having headaches over underperforming part-time team results, and extra admin and recruitment overhead to manage them and replace them when they drop out rapidly (which they will).
So the real cost of part-time sales staff is not just the poorer results per staff, but the fact that at best they have mediocre to decent financial results at a high managerial cost, but at worst they bind your own organization into an endless unproductive sales, turnover & replacement cycle and prevent managers and management from working on more strategic issues.
A far better alternative if you have limited budget is to hire dedicated lead generators to work with your sales closers, as covered in the somewhat controversial article Why Salespeople Shouldn’t Prospect.
In the final call, part-time and commission-only salespeople do sometimes have their role and place in your plans, they occasionally provide needed firepower in uncertain times. But one should always be mindful of the real cost of using part-time salespeople, and deploy them strategically, and sparingly.
All the best!
Kevin Ng is Managing Director of Thunderquote.com , ASEAN’s one-stop e-sourcing & procurement marketplace for businesses, with hundreds of thousands of dollars handled every month, and automated buyer guidance for project scoping and market rate data.
Thus, ThunderQuote generates genuine, high-intent and qualified leads for business owners and salespeople.
