Here Shweiki Media teams up with John Lawo, Jr., president of Magazine Media Strategies, Inc., to present a webinar on the pros and cons of using internal sales vs. external representatives.
(To avoid any confusion, from now on, in-house sales staff will be called “staff,” and external, independent ad sales representatives will be referred to as “reps.”)
Advertising revenue continues to be the lifeblood of magazine publishing, and advertising salespeople are among the most valuable employees at a publishing company because it is their job to obtain that revenue.
How one structures his or her sales department can be a difficult and critical decision for the success of a business. It is a decision that should be made with the following assumptions about one’s business in mind:
- The business has a completed budget, and one knows what it can afford for ad sales and what is most economical.
- The business must compete with other media for ad dollars.
- In-person contact with advertisers and prospects is necessary.
Whatever business structure is chosen, one should remember that control and market position are key concerns. There are three directions one can go when it comes to forming a sales team: all reps, all staff, or a combination of the two.
Internal Staff Considerations
There are a number of internal factors that come into play when building an ad salesforce:
- Competitive Position: The competitive position of a business determines the time and effort reps will put in because it affects how they are paid. The strength of one’s competitive position can determine whether one should use internal staff or outside reps. If a business has a strong competitive position at or near the top of the market, then one should consider reps and staff equally. If position is not so strong, then one should stick with the internal staff.
- Compensation Structure: The important things to remember about compensation structure are maintaining control over sales costs, regardless of structure, and knowing costs involved with all combinations of reps and staff.
- Specialized Content: One should think twice about whether specialized training is necessary for the sales team. If subject matter and content of media are of the specialized nature, such as technical content, then it would be prudent to provide specialized training beyond the basic principle of selling.
- Management: Management is more about what one is personally comfortable with. If managers are more controlling, it is best to go with staff, but if they are comfortable with some distance between the “front lines” and “home base” then they should be able to work well with reps.
- Location and Territory Size: Larger media centers like New York City or Chicago have convenient access to pools of talent located internally and therefore should use more of their internal staff. If located in a smaller territory, it might be better to consider external reps. It’s also important to consider the number of ad agencies involved and the number of individual accounts there are to cover.
External Rep Considerations
Here, are some external factors one should consider when structuring a salesforce:
- Location and Territory Size: This is a mutual consideration and follows the same guidelines as stated above.
- Experience and Reputation: One should hire reps they would want on their own staff, because these reps are representing the business. Reps are the face of the company, and clients and potential clients will likely make impressions about the company and the manager based on the rep. One should hire with this in mind.
- Management and Operation: It’s important to make sure there is a shared cultural approach to selling and a dedication to good business principles. It is important for everyone to be on the same page about the direction the business needs to go and that brands are being sold in the same way.
- List of Accounts: Be sure that brands “fit” with reps’ existing accounts. No one wants salespeople handling competing brands at the same time, so one should be aware of other positions reps are holding.