Sales agent or sales rep? A smaller, growing business needs all of the resources and additional help it can get, and an experienced sales agent can be a great addition to the growth team for only a fraction of a cost.
A sales agent is usually an independent contractor who gets hired by a company to support or expand their sales in new markets and territories.
Here at the UMG we often hire independent sales agents to supplement the effects of our direct outreach. Often with the volume of replies our clients do not have the capacity to follow up with every interested lead — and that’s where a sales agent comes in handy. Their job is to nurture the prospect until they’ve become a hot lead — and then the sale is as good as done.
How much does an in-house sales representative cost? The average salary for a sales rep in the US is $50,000 a year. If you have a few dedicated business development managers already, that’s great.
But if you are looking to hire new salespeople to support your growth, you need to factor in the costs of hiring, training, etc.
Now add in payroll taxes, workers comp insurance, bonding fees, liability
insurance, etc. These are an additional $30,000 to $35,000 over and above the salesman’s base salary and maintenance costs.
All together this average salesperson is costing you $80–85,000 per year. That’s a substantial amount, especially for a growing business. The question is, what is he bringing back for you?
The truth is, the average new sales rep will not start paying off these costs until their 3rd month.
Contrary to that, an independent sales agent will cost you nothing — until they start bringing in revenue.
You don’t pay your agents a salary, benefits or expenses. You just pay them commission.
This makes sales agents an attractive option for smaller businesses especially — higher chance of a sale for far less investment.
Precisely because sales agents have no fixed salary, they have all the more incentive to sell better and faster.
Since there is no base salary to rely on, agents can’t afford to slack off at any time; they must sell to live, and therefore must make sales time count.
This means that their sales approach will be a little more aggressive, a little more direct — but then a lot more effective.
Since we started working with sales agents, our Account Managers have seen a 25% increase in the number of hot leads and bookings.
Do you know exactly the type of audience you should be selling to? Think again.
A sales agent is a marketer, targeting manager and sales rep in one. This means they will have their own ideas of how to market your product and who to market to.
In other words, sales agents will provide a breath of fresh air that so many businesses with stale companies need.
Experienced sales agents usually already have a pool of trusted customers and connections. Based on their experience working in the industry, they can open the doors for new, better audiences to enjoy your product.
And who knows — maybe they’ll see something your own sales reps have been missing!
Sales agents and sales reps don’t have to work in opposition — on the contrary, they are meant to help and enhance each other’s productivity.
According to Forbes, sales reps only spend about a ⅓ of their time actually selling. What are the other 2 thirds spent on? Administrative tasks, chasing leads, nurturing prospects into a booking.
As a result, growth stagnates, sales decline.
This is what a sales agent can help with.
With the help of a sales agent your sales reps will get hot and ready leads directly in their booking system, so that you can spend time doing what you do best — selling.
The UMG often enlists the help of sales agents to support the influx on interested prospects during one campaign. It’s unreasonable to expect that your sales reps will be able to follow up with all the 30+ interested leads and over 60+ warm prospects in just one month.
This is where sales agents assist us, turning an interest into a valid booking and driving them closer to that finished sale.
So, should you hire a sales agent to support your sales or go along with your direct outreach campaign? The decision is ultimately on you. With the right person, right attitude and workflow, sales agents can be a great asset to the growth of your business, while being a cost-effective investment.
If you are currently considering getting a bookings appointer with your campaign at the UMG, speak to a member of our team here.
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