Better hiring, smart pay and active management will detemine the competitive advantage of an outsourced salesforce
Outsourcing of a sales-force was a novelty five to six years back. Most field personnel were directly recruited by companies. Then some lean banks like Stanchart and Citibank stepped into consumer banking. Need arose for more feet. Stanchart, for one, began by appointing a direct sales agency. A DSA took a contract to sell, say, credit cards by employing its own sales force.
Now look at the FMCG companies. As they yearned to expand reach (at reasonable cost), distributors were asked to recruit salesmen who peddled a particular company's products. This was always on. But by the mid-1990s, this system had to be modified. Companies paid outside salesmen a percentage of sales. But as sales rose substantially, the payout jumped as well. That, when the distributor kept working with the same number of salesmen. So now, most firms pay a fixed subsidy or each salesman.
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Yet, the technique of outsourcing a salesforce is far from perfect. With salaries, attracting even reasonably good candidates is a problem. The problem begins at the recruitment stage itself. How do you get people? Remember, we are ta about anyone who is a graduate to even a non-matriculate. Taking the recruitment-ad route is an expensive proposition.
Referral is the only way out. Even if you do find people through referral, you have to spend considerable amount of time and money on training them. At present, firms are using local (to a region) trainers for getting the outsourced field-force into shape. it costs less as the company does not have to consider expenses like travel of its own employees. Plus, there is an added advantage of the trainer be' well-versed with the local lingo to demonstrate selling skills in five situations.
I But a lot of this too goes waste. Reason: high attrition rates (3540 per cent). You may have to contend with a new s