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Working with Independent Sales Reps

How the role of reps is changing with integrated media.



By Matt Kinsman
04/03/2008

With all the talk of outsourcing (production, art direction, even editorial), it’s easy to overlook the fact that the revenue-generating function of the magazine business—sales—has long been outsourced with no one batting an eye. Whether through individual reps or a dedicated rep firm, few external employees are so key to the long-term success of a publication.

But today, as the market emphasizes “integrated packages,” the role of the independent rep may be less clearly defined, even as the internal sales staff struggles to redefine themselves. Should independent reps sell everything on the menu or are they better suited to just print? Or, is there an opportunity for specialist reps to focus on specific media like digital, events or data because the regular sales staff doesn’t possess those talking points?

Folio: spoke with a cross-section of the publishing sector: large consumer, b-to-b and city & regional publishers to determine where the independent rep fits in today and how to best work with them.

Reps as “Part of the Family”

Independent sales reps account for about 40 percent of the total ad sales for American Express Publishing’s Travel & Leisure, according to vice president and publisher J.P. Kyrillos. The magazine uses contracts with independent sales reps responsible for territories such as San Francisco, Atlanta, Chicago and Toronto. The magazine also leverages reps around the world for international sales. “Sales reps are integral to our business,” says Kyrillos. “They are independent reps but to be honest, I don’t think of them differently. Whether you’re a satellite office in Los Angeles or an independent in San Francisco, they’re interchangeable.”

Travel & Leisure reps are selling ad space in the magazine as well as digital with Travel&Leisure.com. “These guys have amazing relationships in their market,” says Kyrillos. “Most are print shops but they’ve taken on digital. The relationships don’t always cross over, sometimes they work, sometimes they don’t. When you’ve got someone who owns a small business, they’ve got to make sales to put food on the table. That’s a motivated salesperson. I want all our salespeople to feel like they’re running their own small business.”

Reggie Lawrence has seen both sides of the equation, working as a longtime independent rep for Penton Media’s Fleet Owner before joining the magazine as national sales manager earlier this year. “Somebody had to step up and Fleet Owner was more than a job, it’s become my life,” says Lawrence. “Our reps really function as employees. To most of our customers, when they call up, they say they’re with Fleet Owner. We’ve had people who have worked for years as reps, and a couple years into the relationship a client is surprised to find out they don’t actually work at Penton.”

Reps for Fleet Owner are selling across the board. “They sell everything—print, online, larger sales that may be package buys,” says Lawrence. “We don’t dissuade them from selling anything. For us, it’s not about whether someone is an independent rep or a direct rep, it’s whether they have talent.”

Fleet Owner has three internal salespeople plus three independent reps. “Independents tend to be better for overall branding campaigns,” says Lawrence. “Those are the guys the customer sees. They’re attached to everything. We don’t want them to just sell print, they need to speak to everything on the menu. Things like list rental we’ll hand off to someone else but still they need to be able to speak about it intelligently, know that it offers, what it costs and be able to endorse it.”

Publishers used to hire reps to cover a territory they couldn’t afford to assign to a full-time employee. “That’s not the case anymore. If there’s a proven track record with a salesperson, we want to work with them,” says Lawrence. “Good reps know their limits. They know not to take on too much because their performance will suffer and then word will get out.”

Reps working with other publishers is typically recognized as part of the deal—as long as the rep doesn’t take on too much or work for a competitor, of course. “If they’re a good rep, they’ll be working with more than one magazine,” says Lawrence. “The biggest thing I see is the pressure to drive revenue. It’s a balance, I’m learning that now. When we hire independents or even direct salespeople it takes a good three years in that territory before that person reaches their stride. Some publishers come in and think that in the next two or three months that needle is going to move. In truth you’re steering a ship and it takes time to turn it.”

Regional title Maryland Life has five internal salespeople and two independent reps selling both print and digital. “Both of these contractors have specific regions of the state although they’re free to broaden horizons as long as it doesn’t conflict with a client someone else is selling,” says co-publisher and editor-in-chief Dan Patrell, who adds that independent reps account for about 10 percent of the magazine’s total sales. “We’re not actively hiring independent contractors left and right. The ones I have now, my magazine is their focus. I have worked in the past with other independent contractors whose plates were so occupied with other contracts, it was hard not to feel like we were an after thought.”

Paul DeGrandis was a top salesperson at Hanley Wood who started his own rep firm. He says publishers should be focused on money, not time. “It’s interesting that the publishers who didn’t engage me were very focused on how much time I could commit to them,” he says. “My response was, ‘It’s not how much time I commit, it’s about how much money I’ll make for you.’ You can have someone bringing in five $30,000 accounts or five $60,000. I’m the guy bringing in five $60,000 accounts.”

Outsourcing Events and Digital

Other publishers are seeing distinct skill sets emerge with rep firms for both digital and live events. Paste outsources event sponsorships with a company called BMF Media. “Our advertising team is used to dealing with media buyers rather than sponsorships,” says director of marketing and events Caren Kelleher. “Selling pages and online takes up so much of their effort that it doesn’t make sense to reinvent the wheel and try to cultivate new relationships when there are reps out there who already have those relationships and can make those introductions for us.”
Event sponsorships can be trickier. “Events can’t be quantified like they can online or in print,” says Kelleher. “You’re selling an idea and asking your sponsors to trust you on whether you can deliver.”

Popular Science, which sees about 24 percent of its ad sales from reps, looks for rep firms that do specialize in certain media. “One of my rep firms has a digital arm and assigned us a different digital rep who clearly had contacts and hit the ground running,” says publisher Gregg Hano.

Online-only publisher ThomasNet has an entire model built on independent reps, with 350 selling across country. “They sell everything: the directory, content solutions, the newsroom,” says director Paul Gerbino. “We’re constantly tweaking and training, and really helping them understand how different offerings we have create a total solution. Every publisher in this Internet age needs to get out from behind the desk and spend time with their reps.”

Sales reps ignore online at their own peril. “I don’t think independent reps can afford to be in the group still getting up to speed on the Internet,” adds Lawrence. “They’re compensated strictly on performance and more and more, that means selling online.”

DeGrandis has worked with publishers where he oversees the print sales while the client handles the digital push. “One of my clients hired an online salesperson and it’s great,” he says. “Digital is more of a technical sale, so we work together and we both get paid.”

Rep Firms as Strategic Partner

But what can the rep offer beyond closing the sale? There are a crop of dedicated rep firms that go beyond just banging the phones and knocking on doors to serving as a strategic partner to the publisher. Rep firm James G. Elliott, whose clients have included Kiplinger’s and National Geographic Traveler, prefers to work with publishers that don’t have a dedicated internal work staff and offers additional services ranging from research to marketing to booking and reporting. “We’ve had publishers ask us to examine their cost structure to see how we could do it more efficiently,” says president Jim Elliott. “My preferred accounts are ones where we’re partners strategically and execute tactically. We don’t want to overload our people. They work on one or two properties at the most.”

Often independent reps aren’t used just for additional sales where it doesn’t make sense to establish a dedicated office but to break new territory or jumpstart a lagging market. “You’re not given big territories, publishers are giving you smaller territories and you have to grow them,” says DeGrandis. “I am strategically involved with all my clients. Some have very seasoned salespeople and I’m just one of the guys. Others, I’ve had to take my experience from Hanley Wood and helped their organization get to the next level.”

Agreements/Compensation

Independent sales reps usually work on straight commission, typically 15 percent to 20 percent (and that range applies for both consumer and b-to-b publishing). “They’re always working on straight commission,” says Lawrence. “If you’re going to turn over an enormous territory to someone and there’s a lot of existing billing, it takes a lot of the risk away from the rep, and it gives them an existing cash flow where they can afford to travel. Other times the commission is 20 percent when it’s a smaller territory with smaller growth.“

Travel & Leisure lets reps out of a contract with three months notice. Reps are also expected to cover all travel and expenses. “They’re generally only getting paid commission unless they’re just starting out. Then we might work out something to help get their business going,” says Kyrillos.

While publishers are quick to say independent reps are “just part of the team,” be careful where the lines are. “If you do impose a lot of demands such as attending constant office meetings, the IRS will set them up as a bona fide, full-time employee,” says Patrell. “You have to remember with a contractor—they are independent. You have to be careful as to how you make requests on a contractor.”

Paste offers its independent reps the same commission rate it offers the internal sales team but is clear about drawing the line. “We’re cautious that a rep firm isn’t impeding on existing relationships our sales team has,” says Kelleher. “If, say, a telecom company is interested in sponsorships and the sales person already has a relationship there, we let the rep firm know we’re giving priority to our sales team.”

By Matt Kinsman
04/03/2008







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