The sales industry is infamous for having one of the highest employee churn rates of any business sector.
Figures from a study conducted by The Bridge Group, which specialises in sales strategy consulting for B2B companies, tell us that the sales industry has an annual employee churn rate of around 34 per cent, while one-in-ten companies in the sector suffer from churn rates of more than 55 per cent.
These high rates present big challenges for companies across the globe. While hiring sales staff is essential to growth, recruitment, training and retention is traditionally time consuming, costly and risky given that companies need to pay a salary from day one with no guarantee of performance and a high chance that employees will move on in a short space of time.
As such, increasing numbers of companies are now managing to combat this epidemic by instead choosing to partner with independent, B2B commission-only sales professionals who only command an agreed commission after closing new business.
This has also opened up opportunities for companies like ours, CommissionCrowd, which has tapped into this newly emerging market by connecting companies with self-employed sales experts globally.
The company was born directly out of our own need to scale a previous business of ours, while mitigating the risk of hiring sales employees. However, we quickly found the independent sales industry to be highly fragmented and difficult to manage so we set out on a mission to bring order to the chaos and build a solution to these problems.
Self-employment isn’t of course a new concept. In fact, any business owner that chooses to start their own company is technically working on a commission-only basis. Why? Because there is no one paying a salary. Instead, business owners profit from the sale of the products or services their companies provide.
Self-employed sales reps typically come from a successful sales background . They then set out to build a diverse yet complementary portfolio of products and services that they can sell into their networks.
Typically, freelance sales reps will have built up an enviable list of industry contacts over the years and are able to introduce a wide range of complimentary products and services to a host of potential customers and clients on every interaction. As they represent multiple companies, they are often able to generate significantly higher income than they are likely to receive as a full-time employee working for someone else.
Many companies now choose to work with independent sales reps in order to engage with their vast networks. A sales rep won’t normally sell competing products and services but rather those that complement each other. This ensures a much higher probability of multiple sales opportunities on every client interaction. Ultimately, working with this type of sales professional can result in a much faster route to market.
An independent sales rep can also be worth their weight in gold when companies are ready to expand into new markets. While an in-house sales team may be very familiar with existing markets, independent sales staff can connect with people that have vast knowledge of new or future markets.
Reps also offer access to a much wider pool of sales talent due to the fact that firms are no longer restricted to employing local talent. Being independent, they are not restricted by geography and can be based in territories where companies would like to expand into but may not have any presence currently.
While there’s a thriving network of freelance sales professionals operating globally, many companies have yet to embrace outsourcing a part of their sales process.
But as Steven Hamm from Bloomberg’s Businessweek notes: “Companies are willing to outsource their back office operations. So, why not the sales force?”
Emerging technologies like CommissionCrowd have also made it much easier for independent sales reps and companies to connect meaning that the industry is now gaining global recognition. While it can be a daunting prospect having a brand represented by someone who works independently of the company, it’s never been more important to embrace change in order to continue growing in these tough markets.