You can have a great reputation and great marketing on the one hand, great products and installation on the other, but you need an effective salesforce to make the critical link between them. Whether “W-2” employees or “1099” independent agents are best for the job is an open question among home improvement contractors.
Pros and Cons Sales personnel who are employees generally cost more than independent contractors, but for Accent Windows, Westminster, Colo., the benefits outweigh the costs. President and co-owner Richard Roeding cites stability, predictability, and longevity as key benefits. A salesforce with low turnover is more likely to be productive, he says. “If you have reps that have been with you longer, they probably have better closing ratios and maintain a better relationship with former customers as a base for referral business,” Roeding points out. “You have to extract all that value out of the additional cost of employing somebody,” he adds.
Probably the leading reason that many home improvement contractors prefer to have salespeople as employees is management control. “We feel like our control is better and that they feel more connected to the company,” Roeding says. “Obviously, being employees, we can tell them where to go and when, without legal ramifications.”
Aaron Westmoreland, general manager of Wood Windows in Boise, Idaho, agrees. “Salespeople are hard enough to control as employees,” he says, “let alone as independent contractors.”
Independent Reps as Partners At Invincible Associates, Largo, Fla., where all salespeople are independents, owner and CEO Steven Field finds that independents bring a high level of professionalism to selling his company's products.
“They're not just independent sales reps, they're independent business people,” he points out. “They view each other as partners. It creates a more professional and productive relationship.” There are financial benefits too, Field says. Invincible doesn't pay reps benefits, and as independent business operators, the reps get the expense write-offs and other tax benefits of owning a business.
Field says that the arrangement has given him at least as much salesforce stability as would sales employees. “My core reps have been with me for 5 to 10 years,” he says. “I don't think the issue is whether they're employees or independents. It's whether they're successful or not.”