Three Agreements For Hiring Sales and Lead Generators Posted on Oct 28, 2016

Many successful business owners have learned to focus on sales as their number one priority. When setting up relationships with sales consultants and lead generators, careful attention should be paid to both incentivize sales efforts and protect the company. The three sales agreements every solar company needs are: Solar Sales Commission Policies, Referral Agreements and Origination Sales Broker Agreements.  

1.  Solar Sales Commission Policy: For employees and independent contractors selling solar for a company – for eg., used with an offer letter, employment agreement or independent contractor agreement.

All solar companies should have well-written, comprehensive Solar Sales Commission Policies. This type of policy can be attached to employment agreements, offer letters and independent contractor agreements or simply issued by the company as its policy for paying sales commissions. Most companies do not realize how complex creating these policies can be and find themselves owing unintended commissions.  Since commissions are considered “wages” by law, any failure to timely pay commissions triggers interest and penalties. The policy needs to artfully craft terms like commission clawbacks, when and how the commissions are deemed “earned,” and what happens at termination of the sales relationship. 

2.  Referral Agreements: For business partners that provide leads in exchange for referral fees.

When a company wants to pay an individual or company a referral fee to receive leads, a Referral Agreement can be used. Care should be taken as to what qualifies as a "referral," how long the obligation to pay referral fees lasts, whether there are any restrictions on territories and/or a maximum amount of fees, and any other important details that will trigger when the fees are owed. Payment of referral fees is not illegal absent bribery, fraud or a statutory prohibition. Prior to entering these agreements, companies should ensure no statutory prohibitions applies to the referral situation.  

3.  Origination Sales Broker Agreements: For sales originators who generate leads, manage relationships with customers and source sales prospects – for e.g., companies look to originators to have a broad network of contacts and good reputation.

Solar companies that want to hire sales originators who will bring the company business should use Origination Sales Broker Agreements. Agreements with these individuals or companies cover many key details that protect the company from a variety of risks and obligations. For instance, these agreements provide the sales originators with authority to distribute a company’s sales materials, present the company’s products to customers, obtain executed contracts and even participate in sales calls. Sales originators are not a company’s employees and the relationship is often non-exclusive.