Ask Steve

Ask Steve: How Should I Manage an Outside Salesperson?

On commission structures, sales systems and holding salespeople accountable.

business women stock image reportsHi Steve,

We’ve grown quite a bit over the years. Our company now does about $1.5 million per year in a very diversified field of higher-priced residential, contract commercial cleaning and quite a bit of water damage mitigation.

Up till now I’ve personally done most of our selling in a more or less regular manner. However, as we grow I find my time is spent more on internal managing.

So I’m thinking it may be time to hand off the sales efforts to someone who can be 100% focused on developing new accounts. Do you have any thoughts on how to do this?

-Growing in Green Bay


Good to hear from you, Growing. And you make me nostalgic! Your company structure very nearly mirrors the business that I owned. I loved the diversified “three-legged stool” of restoration, residential and commercial. One leg tended to feed the other two which definitely helped me sleep better at night!

Now I normally tend to advise cleaning and restoration business owners to do their own selling. After all, you will never find someone more focused on the success of the business than the owner. And up till a million dollars a year or so in sales, the owner’s highest and best use is usually being out there selling (even though many owners argue with me on this since they don’t like selling!).

However, I tend to agree with you that now your “higher use” may be keeping your company on track, strategic planning and looking for great people - which of course includes a salesperson to do business development. So a few thoughts:

1. Most good salespeople already have a long-term career. The real pros are working (with six-figure compensation packages) for IBM, Microsoft, State Farm, etc. So you are probably going to be hiring relatively inexperienced people. So this means you must…

2. Make it easy for them with a sales system. Then once you have developed this system it is possible to hire and train a new salesperson to carry on. But the chances of an untrained and inexperienced employee developing sales skills on their own is virtually nil. After all, if they were such a self-starter that they could successfully do it on their own, they would long ago have started their own business or forged a lucrative career with a Fortune 500 corporation!

Your sales system should include scripts, audio and video sales aids, a proposal template, paperwork for setting up the account and, of course, a pricing guide so your salesperson can write the proposal profitably!

NOTE: Maybe the most common question I hear is, “How much should I charge in commercial work?” For a free Commercial Production/Pricing Analysis Log, just write me at and put the phrase “ICS PPA Log” in the subject line.

Now once you have an entire sales system built that makes it easy to sell for an inexperienced (but motivated) salesperson you must…

3. Hold their feet to the fire! That’s right - we all do better if we are held accountable. (After all, isn’t that why you work so hard? You are under the gun!) And I must tell you freewheeling salespeople can especially waste enormous amounts of time without this accountability.

You add accountability in two ways. First, meet with your new salesperson and jointly (this way you get “buy-in” if they come up with the goals) devise a reasonable quota of new sales contacts and completed proposals. You both should also agree on a goal for signed contracts and profitability. (Don’t set the goal just on gross sales or you may be stuck with some huge jobs for a lot of money that you lose your shirt on! Don’t ask me how I learned about this one!)

The other key is to set up a very generous commission structure - not a salary. Develop your payment structure using “goal-directed behavior.” In other words ask yourself, “What do I want my salesperson to produce?” and then compensate them accordingly.

NOTE: Be careful about tying yourself into a long-term commission package for a new contract. Once you have a regular commercial account I find it better to not be bugging the manager all the time anyway. My philosophy is to blend into the woodwork and just perform good, consistent work. So better to give the salesperson a nice spiff when they close the contract and then 30 or 60 days later (after you have determined the net profit of the new account) is when they really get rewarded.

And finally, even after holding your salespeople accountable you must…

4. Manage your salespeople. There is a reason every car dealership has a position called “Sales Manager.” Salespeople need more hands-on managing than any other employee you will ever have. They will need direction, suggestions, motivation, encouragement… selling is a tough gig!

And Growing, likely at first you will have to be the “sales manager” and meet with your salesperson every morning just to help them line out their day plus weekly to review what they have done. (See point No. 3 on “accountability.”) Don’t ignore this point. Too many times cleaners will hire a salesperson and then ignore them, which never works out well. (I learned this the hard way too!)

P.S. One last warning, Growing. If and when you find a good salesperson - wonderful! But I will caution you that salespeople have one of the highest turnover rates anywhere. By their very nature, successful salespeople are ambitious. And that means the good ones probably will not stay with you long. So plan for succession.

 Steve and ICS want to consult for you! For a personal reply, write Steve HERE with your questions, problems, struggles and challenges!  Your help is on the way! A new “Ask Steve” will premiere in the ICS eNewsletter every Thursday. Register to receive it by clicking here

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