Media Sales Rep Agreement by xgi19712


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									             Working with
             Sales Reps                                                                                 by Matt Kinsman

              The independent sales rep is a staple of                                                 That’s a motivated salesperson. I want
                                                                                                       all our salespeople to feel like they’re
              magazine publishing (and all media for that                                              running their own small business.”
                                                                                                            Reggie Lawrence has seen both
              matter). But is their role changing along with                                           sides of the equation, working as a
              the demand for integrated packages?                                                      longtime independent rep for Penton
                                                                                                       Media’s Fleet Owner before joining
                                                                                                       the magazine as national sales man-

                        ith all the talk of outsourcing   Reps as “Part of the Family”                 ager earlier this year. “Somebody had
                        (production, art direction,       Independent sales reps account for           to step up and Fleet Owner was more
                        even editorial), it’s easy to     about 40 percent of the total ad sales for   than a job, it’s become my life,” says
              overlook the fact that the revenue-         American Express Publishing’s Travel         Lawrence. “Our reps really function
              generating function of the magazine         & Leisure, according to vice president       as employees. To most of our custom-
              business—sales—has long been out-           and publisher J.P. Kyrillos. The maga-       ers, when they call up, they say they’re
              sourced with no one batting an eye.         zine uses contracts with independent         with Fleet Owner. We’ve had people
              Whether through individual reps or a        sales reps responsible for territories       who have worked for years as reps,
              dedicated rep firm, few external em-         such as San Francisco, Atlanta, Chi-         and a couple years into the relation-
              ployees are so key to the long-term         cago and Toronto. The magazine also          ship a client is surprised to find out
              success of a publication.                   leverages reps around the world for          they don’t actually work at Penton.”
                 But today, as the market emphasiz-       international sales. “Sales reps are in-         Reps for Fleet Owner are selling
              es “integrated packages,” the role of       tegral to our business,” says Kyrillos.      across the board. “They sell every-
              the independent rep may be less clear-      “They are independent reps but to be         thing—print, online, larger sales that
              ly defined, even as the internal sales       honest, I don’t think of them different-     may be package buys,” says Law-
              staff struggles to redefine themselves.      ly. Whether you’re a satellite office in      rence. “We don’t dissuade them from
              Should independent reps sell every-         Los Angeles or an independent in San         selling anything. For us, it’s not about
              thing on the menu or are they better        Francisco, they’re interchangeable.”         whether someone is an independent
              suited to just print? Or, is there an op-       Travel & Leisure reps are selling ad     rep or a direct rep, it’s whether they
              portunity for specialist reps to focus      space in the magazine as well as digital     have talent.”
              on specific media like digital, events       with Travel& “These guys             Fleet Owner has three internal sales-
              or data because the regular sales staff     have amazing relationships in their          people plus three independent reps.
              doesn’t possess those talking points?       market,” says Kyrillos. “Most are print      “Independents tend to be better for
                 FOLIO: spoke with a cross-section of     shops but they’ve taken on digital. The      overall branding campaigns,” says
              the publishing sector: large consumer,      relationships don’t always cross over,       Lawrence. “Those are the guys the cus-
              b-to-b and city & regional publishers       sometimes they work, sometimes they          tomer sees. They’re attached to every-
              to determine where the independent          don’t. When you’ve got someone who           thing. We don’t want them to just sell
              rep fits in today and how to best work       owns a small business, they’ve got to        print, they need to speak to everything
              with them.                                  make sales to put food on the table.         on the menu. Things like list rental

52 FOLIO: April 2008 |
                                            “Both of these contractors have specif-           can online or in print,” says Kelleher.
                                            ic regions of the state although they’re          “You’re selling an idea and asking
                                            free to broaden horizons as long as it            your sponsors to trust you on wheth-
                                            doesn’t conflict with a client someone             er you can deliver.”
                                            else is selling,” says co-publisher and               Popular Science, which sees about
                                            editor-in-chief Dan Patrell, who adds             24 percent of its ad sales from reps,
                                            that independent reps account for                 looks for rep firms that do specialize
                                            about 10 percent of the magazine’s to-            in certain media. “One of my rep firms
                                            tal sales. “We’re not actively hiring in-         has a digital arm and assigned us a
                                            dependent contractors left and right.             different digital rep who clearly had
                                            The ones I have now, my magazine is               contacts and hit the ground running,”
                                            their focus. I have worked in the past            says publisher Gregg Hano.
                                            with other independent contractors                    Online-only publisher ThomasNet
                                            whose plates were so occupied with                has an entire model built on inde-
                                            other contracts, it was hard not to feel          pendent reps, with 350 selling across
                                            like we were an after thought.”                   country. “They sell everything: the
                                                Paul DeGrandis was a top sales-               directory, content solutions, the news-
Travel & Leisure sees about 40 per-
cent of its ad sales come from inde-
                                            person at Hanley Wood who started                 room,” says director Paul Gerbino.
pendent reps selling print and online       his own rep firm. He says publish-                 “We’re constantly tweaking and train-
in the U.S. and internationally.            ers should be focused on money, not               ing, and really helping them under-
                                            time. “It’s interesting that the pub-             stand how different offerings we have
we’ll hand off to someone else but still    lishers who didn’t
they need to be able to speak about it      engage me were                                     “When we hire independents or
intelligently, know that it offers, what    very focused on how                                direct salespeople it takes a good
it costs and be able to endorse it.”        much time I could                                  three years in that territory before
    Publishers used to hire reps to cov-    commit to them,” he                                that person reaches their stride.
er a territory they couldn’t afford to      says. “My response                                 Some publishers come in and think
assign to a full-time employee. “That’s     was, ‘It’s not how                                 in the next two to three months that
not the case anymore. If there’s a prov-    much time I commit,                                the needle is going to move. In truth
en track record with a salesperson, we      it’s about how much         Reggie Lawrence        you’re steering a ship and it takes
                                                                        national sales man-
want to work with them,” says Law-          money I’ll make for          ager, Fleet Owner     time to turn it.”
rence. “Good reps know their limits.        you.’ You can have
They know not to take on too much           someone bringing in
because their performance will suffer       five $30,000 accounts or five $60,000.              create a total solution. Every publish-
and then word will get out.”                I’m the guy bringing in five $60,000               er in this Internet age needs to get out
    Reps working with other publish-        accounts.”                                        from behind the desk and spend time
ers is typically recognized as part of                                                        with their reps.”
the deal—as long as the rep doesn’t         Outsourcing Events and Digital                        Sales reps ignore online at their
take on too much or work for a com-         Other publishers are seeing distinct              own peril. “I don’t think independent
petitor, of course. “If they’re a good      skill sets emerge with rep firms for               reps can afford to be in the group still
rep, they’ll be working with more           both digital and live events. Paste               getting up to speed on the Internet,”
than one magazine,” says Lawrence.          outsources event sponsorships with                adds Lawrence. “They’re compensat-
“The biggest thing I see is the pres-       a company called BMF Media. “Our                  ed strictly on performance and more
sure to drive revenue. It’s a balance,      advertising team is used to dealing               and more, that means selling online.”
I’m learning that now. When we hire         with media buyers rather than spon-                   DeGrandis has worked with pub-
independents or even direct salespeo-       sorships,” says director of marketing             lishers where he oversees the print
ple it takes a good three years in that     and events Caren Kelleher. “Selling               sales while the client handles the digi-
territory before that person reaches        pages and online takes up so much of              tal push. “One of my clients hired an
their stride. Some publishers come in       their effort that it doesn’t make sense           online salesperson and it’s great,” he
and think that in the next two or three     to reinvent the wheel and try to culti-           says. “Digital is more of a technical
months that needle is going to move.        vate new relationships when there are             sale, so we work together and we both
In truth you’re steering a ship and it      reps out there who already have those             get paid.”
takes time to turn it.”                     relationships and can make those in-
    Regional title Maryland Life has five    troductions for us.”                              Rep Firms as Strategic Partner
internal salespeople and two indepen-          Event sponsorships can be trickier.            But what can the rep offer beyond
dent reps selling both print and digital.   “Events can’t be quantified like they              closing the sale? There are a crop of

                                                                                                           | April 2008 FOLIO: 53
              dedicated rep firms that go beyond
              just banging the phones and knock-
              ing on doors to serving as a strategic
                                                              Checklist for Selecting a Rep Firm
              partner to the publisher. Rep firm               p Can the rep firm’s capabilities deliver on your
              James G. Elliott, whose clients have              actual expectation?
              included Kiplinger’s and National Geo-          p Do you like and trust them?
              graphic Traveler, prefers to work with          p What is their turnover like?
              publishers that don’t have a dedicated          p Have former employees ever sued them?
              internal work staff and offers addi-            p Are they financially sound and can they weather a downturn?
              tional services ranging from research           p What is their Dun & Bradstreet rating?
              to marketing to booking and report-             p How long have they been in business?
              ing. “We’ve had publishers ask us to
                                                              p Do they have established banking relationships?
              examine their cost structure to see
                                                              p Do their office locations reflect the prestige you would want
              how we could do it more efficiently,”
                                                                to project to your customers?
              says president Jim Elliott. “My pre-
                                                              p Is there a plan if the owner retires or meets an
              ferred accounts are ones where we’re
                                                                unexpected emergency?
              partners strategically and execute
                                                              p Does a big player dominate them? What happens if the
              tactically. We don’t want to overload
                                                                player goes away?
              our people. They work on one or two
                                                              p Do you have an understanding of how the rep company
              properties at the most.”
                                                                is set up?
                  Often independent reps aren’t
                                                              p Do you have an understanding of how that firm
              used just for additional sales where
                                                                makes money?
              it doesn’t make sense to establish a
                                                              p Have you examined the systems that the firm has in place?
              dedicated office but to break new
                                                              p Does the rep firm have a history of adapting to new systems,
              territory or jumpstart a lagging mar-
                                                                if that’s important to you?
              ket. “You’re not given big territories,
                                                              p Is it understood what other services you might need in the future
              publishers are giving you smaller ter-
                                                                and whether or not this company can provide those services?
              ritories and you have to grow them,”
                                                              p Do you understand what resources the firm has from a
              says DeGrandis. “I am strategically
                                                                marketing standpoint, such as SRDS, Advertising Database, PIB,
              involved with all my clients. Some
                                                                research capabilities and other assets?
              have very seasoned salespeople and
                                                              p Do you have a clear idea of what the firm’s hiring policies are
              I’m just one of the guys. Others, I’ve
                                                                and what their employee behavior tolerance is?
              had to take my experience from Han-
                                                              p Do you need a rep firm that can adapt into all of your systems
              ley Wood and helped their organiza-
                                                                or are you flexible enough to work with their existing systems?
              tion get to the next level.”
                                                              p Do they sell print or other media, like online? Do they have
                                                                an online growth strategy?
              Agreements/Compensation                         p Do they have internal sales contests and programs to
              Independent sales reps usually work
                                                                motivate sellers?
              on straight commission, typically 15
                                                              p Do they provide sales training?
              percent to 20 percent (and that range
              applies for both consumer and b-to-b            Source: James G Elliott Inc. “Ads & Ideas,” Fall 2007

              publishing). “They’re always work-
              ing on straight commission,” says
              Lawrence. “If you’re going to turn           ally only getting paid commission un-           have to be careful as to how you make
              over an enormous territory to some-          less they’re just starting out. Then we         requests on a contractor.”
              one and there’s a lot of existing billing,   might work out something to help get                Paste offers its independent reps
              it takes a lot of the risk away from the     their business going,” says Kyrillos.           the same commission rate it offers the
              rep, and it gives them an existing cash         While publishers are quick to say            internal sales team but is clear about
              flow where they can afford to travel.         independent reps are “just part of the          drawing the line. “We’re cautious that
              Other times the commission is 20 per-        team,” be careful where the lines are.          a rep firm isn’t impeding on existing
              cent when it’s a smaller territory with      “If you do impose a lot of demands              relationships our sales team has,” says
              smaller growth.“                             such as attending constant office meet-          Kelleher. “If, say, a telecom company
                  Travel & Leisure lets reps out of a      ings, the IRS will set them up as a bona        is interested in sponsorships and the
              contract with three months notice.           fide, full-time employee,” says Patrell.         sales person already has a relationship
              Reps are also expected to cover all          “You have to remember with a con-               there, we let the rep firm know we’re
              travel and expenses. “They’re gener-         tractor—they are independent. You               giving priority to our sales team.” p

54 FOLIO: April 2008 |

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