5 Reasons Not to Build a Sales Team

Tonight my wife and I were celebrating our YouTube channel reaching one million views. She reminded me about my first residual check from building a referral team.  After working pretty much full time for three months, I received the princely sum of $0.60!  I was able to persevere and build a huge team before shifting my focus to software and training.  But I learned that building a merchant services sales team is time consuming, expensive, and difficult, especially when not knowing what to expect.

I am passionate about helping ISO’s build a profitable sales team.  Most of my time is spent these days solving that problem through our software and training.  I am still a firm believer in the power of 1099 sales teams and the profitability they can generate over time.  But there are five things of which to be aware before taking the plunge.

Issue #1 – 1099 reps are not cheaper or easier to manage than W2 sales reps.  Most ISO’s fail to build their 1099 team due to lack of resources and tools – ones which would be offered to employees.  Without extensive training courses, weekly sales meetings, proactive goal setting phone calls, occasional in-person gatherings, company email, business cards, pipeline and statement analysis software, etc. success will be an uphill battle.  If you are looking for the “easy button,” look elsewhere.

Issue #2 – The more experienced “easy” reps will produce lower margins (when they can be found.)  We all know the saying “Time is Money.”  This is certainly true when building a 1099 sales team.  I often do consulting for ISO’s looking to grow through a national sales team.  An ISO often targets experienced industry reps rather than investing time to help newbies learn the industry.  However, to get these reps requires giving up almost all residuals, not to mention up-front bonus money.  The “super ISO’s” are tough competition.  I recommend providing a valuable service to reps who are new to the industry.  In exchange for the time and coaching, money will be earned in the form of higher profit margins.

Issue #3 – This “nasty reality” must be realized when building a 1099 sales team – you could probably outsell your first ten recruits combined and keep all the money.  For a talented, focused sales professional, a team is unlikely to produce more profit than you alone could until 30+ reps have been recruited.  And that’s assuming that ten of the thirty keep selling!  Run the numbers and see if this really makes sense for you.  Don’t make the decision to build a sales team because you’re tired of selling.  It’s not the easy way out.

Issue #4 – If you only pay for results, you may not get any.  Ever hear the phrase, “you get what you pay for?”  This holds true for sales people.  There are basically three options when paying sales people:

I personally believe the biggest opportunity in our segment of the industry right now is not apple pay or EMV or even cash discounting.  It is creativity in the area of compensation for merchant level sales people.  Ever wonder why our industry recruits thousands of reps a month and only a small fraction stick around, even though many of them are very talented?  It is because everybody pays basically the same way!  Sales professionals either can’t survive the first month financially, or they end up finding a “real job.”

What if a processor decided to treat sales people like people rather than numbers?  Or paid $200 per week bonus for three weeks in exchange for X number of prospecting visits which are tracked in a CRM and reviewed weekly?  Or paid reps $3 for each tri-fold they handed to a business owner the first month, provided they tracked the lead info?  Would this really be a crazy investment?  I know ISO’s who spend thousands of dollars on recruiting, get a top-notch sales professional to sign the agent agreement, and then fail to provide training, marketing materials or software of any kind.  This is a waste of everyone’s time.

Issue #5 – You need to know how to sell in order to build a sales team.  Several years back when I was still building my own ISO, I had a high potential sales rep who wasn’t producing.  When questioned, this rep told me the pitch he was using had come from a support person at the processor.  I then gave him a pitch that would actually work.

A follow-up with management at the processor revealed a person who had never been in the field selling liked to “help” sales people by providing advice.  Her “help” was like me volunteering at my local hospital to perform heart transplants for patients.  It might make me feel good to help.  But my lack of knowledge might not make it the best plan for the patients.

So many ISO’s seem to forget that building a sales team is just as much about “sales” as it is about “team.”  To spend time on the phone and in the field is vital, teaching your team how you successfully sold merchants.  Provide fresh training courses to get reps educated and motivated.  Have regular group discussions to share best practices and role play new approaches to common objections.

If you still think starting and / or growing a sales team is the right path for you, get started!  I would be glad to schedule a call with you to discuss plans and give my insights, as long as you let me pitch you on our software and training!  If that sounds like a fair deal, shoot me an email james@ccsalespro.com