Some companies complain about the high cost of face to face sales. However, if you need a direct field sales presence to end users but really want to keep costs down, outsourcing to sales specialists is the answer. It will move the fixed costs of employing sales people (found on the P&L account) to variable costs (found on the balance sheet). Here are some telling statistics you may not know about –
a) Any company needs sales revenue of at least 5 times a field sales executive’s salary to cover that salary.
b) The cost of the average field sales force accounts for 40% of a company’s revenue.
c) The total salary package of the average field sales employee is only 38% of the total cost of that sales employee.
d) To get the average cost of running a sales employee, multiply their salary by 2.6.
The 13 reasons for the high costs of running field sales employees are –
- Basic salaries.
- Income tax.
- National insurance.
- Holiday pay.
- Sick days.
- Cars or car allowances.
- Office space.
- Office equipment.
- Recruitment and/or redundancy.
- HR support.
- Management support.
- Pension plans.
- Health insurance.
It’s also important to bear in mind that some sales employees will want to move into management eventually – successfully or otherwise. This means the loss of field sales people. However, outsourced sales specialists stay as they are.
How serious are you about keeping your sales costs down?
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