Insurance Sales
Using an independent sales force vs. A career sales force produces immediate and obvious advantages. Independent salespeople quickly provide more 'feet on the street,' for a company desiring to expand. They are hungry for a commission, unlike more complacent career salespeople with already established salaries and networks within the company's traditional reach. Independent salespeople bring more diverse experiences and an array of new business networks and sales connections originally inaccessible to the company.
The advantages and disadvantages of using commission vs. career sales are also relatively obvious -- the use of commission sales encourages salesmen and women to use high-pressure sales techniques to secure their salaries. However, this also encourages a high turnover rate and low company loyalty, as salaries are not secure. Fly by night rather than respectable individuals are attracted to the workforce. But career salespeople with built-in salaries tend to stick to their territories, as they are always assured of making some income.
However, there are some problems, as evidenced in this insurance sales case study, with this shift to an independent sales force. The new salespeople were not a part of company culture, nor did their salary and benefit structure encourage them to be. The company has less control over its 'product,' namely how its product was sold, and even was unprepared to fully meet with the level of expansion precipitated by the inclusion of independent salespeople. Furthermore, the different structure caused company hostility within the ranks, as traditional career personnel feel excluded from the new salespeople, and the independent sales force feels jealous of the other individual's built-in financial benefits.
It would be an excellent strategy of JTP Insurance were to pursue a mixed model of sales, focusing on independent sales in one arena of the insurance business, but separating career oriented salespeople and tracking them in purveying a different product, in a different area of the company. This would dampen salary competition between the two sales forces. Although the economy faces an uncertain recovery, recent national natural disasters, from Hurricane Isabel to the California Forest Fires, to an aging workforce, have all highlighted the need for insurance.
The company must stand and meet this challenge. Although the Human Resources conflict remains unresolved, independent contractors continue to be used to meet the increased demand within the industry.
