Outside Sales Reps Rock

May 22, 2002

During the economic downturn that most of corporate America experienced in 2001, a number of manufacturers decided to go from an in-house to an outside sales force for some or all of their major product lines.

The best available statistics, according to Erin Anderson, marketing professor at INSEAD, indicate that about 50 percent of all companies operating in North America use a contract sales force in some capacity, whether for a piece of their product line, a certain geographic region or a particular application.

Ms. Anderson and colleague Len Lodish, marketing professor at Wharton, have collaborated on research that studies how to get the most out of an outside sales force, regardless of economic climate. What some companies don’t realize, says Mr. Lodish, “is that outside sales reps are often more motivated than the internal sales force. They know more about the market and they are hungry for the business.”

“One of the reasons many companies don’t like to use an outside sales force is because they say they can get market reports from their own people. But a lot of inside people don’t take the time to make those reports, while many outside agencies do,” says Ms. Anderson. Also, “the sales rep can leverage off the fact that he is the trusted source of information for a whole slew of products,” she adds.

Moderator Comment: In general terms, are retailers, better served by manufacturer direct sales groups or sales and marketing companies (aka brokers)? [George
Anderson – Moderator

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