PEO Marketing And Sales In Motion


Virginia G. Frazier



Kenneth A. Polcyn, Ph.D.

Senior Consultant

© Deva Industries, Inc.



Over the past 15 or so years marketing/sales has changed as a result of, among other things, industry maturation, emerging outsourcing models, insurance issues, entrepreneurs and some bad apples in the business. Today approaches are quite eclectic and evolving. There is no single model; what worked yesterday may not today. It’s an evolution! In the early years phone solicitations and field teams were major marketing/sales approaches and companies were competing with each other on a price basis and the “arbitrage.” The PEO was sold primarily as the administrator of administrative functions and saving a company bucks. Today the concept has shifted to a more strategic focus of value for long-term growth for both clients and clients’ customers. Consequently, marketing and sales has begun to focus accordingly. But the major change for a PEO has been from an Administrative Provider to an Outsourcing Provider with a wide range of products and services for meeting client/customer operational requirements in many areas. Some call the new model HRO, ASO and BPO plus others.


Marketing Verses Sales


Through the years the industry has created a variety of approaches to marketing/sales, and there are several I’m sure to which I’ve not been privy, as well as to their subtleties. Nevertheless, the most surprising phenomenon is that some companies still treat marketing and sales as one in the same. Because of this, considerable time and money has been wasted in efforts to capture clients. The primary job of marketing is to create awareness, a positive image, an appeal. Sales primary job, based on marketing opening the doors, is to create a preference for a particular PEO in face-to-face meetings with prospects. Marketing precedes sales; without it every sales call is a cold call!




Relative to marketing and sales planning, there seems to be more emphasis on written plans today than in past years; but, still there are more sales than marketing/sales plans. Even with planning there is a common flaw, not unique to the industry. Once plans are created the monthly or quarterly updating is meager or does not occur in some companies. One contributing factor seems be the lack of a substantive feedback system for both marketing and sales. Information from clients/potential clients about why marketing and sales efforts failed or were successful is required for updating. Another factor may be the lack of strict policies and processes insuring updating. From the feedback information different strategies and tactics could be created to improve results. Of course, there are still some in the industry with no plans or “it’s in someone’s head”, flying by the seat of their pants.


Media Approaches


In terms of using the various media for marketing/sales, across the U.S. television does not appear to be a major communication channel by itself or in combination with other media. Some radio is used, but print and Internet media continue to be emphasized. There are Web sites assisting with the identification of PEOs in particular geographical areas. Print is the norm with brochure and pamphlet information provided via mail or directly by sales personnel. Current client referrals continue to be extremely important. However, there has been a shift to an intermediary for marketing and selling the industry, “The Agent.”


Marketing/Sales Strategies


The agent concept is not new, but it has expanded over the years taking on several forms. (Detailed discussions about the agent concept is provided in another article in this issue.) In the purist sense entrepreneurs have established organizations to service the industry. Here the agent is an entity executing marketing and lead generation functions independent of, but on behalf of the PEO for a fee. They bring potential clients to the table where the PEO generally closes the sale, if the numbers, etc. meet established contractual agreements.


Another flavor of agents came into existence when the insurance industry entered the business, some purchasing PEO companies, encouraging agents to market and sell the concept to current business clients. Other insurance oriented PEO businesses have used investment incentives to attract insurance agents for marketing their clients. Furthermore, some in the banking business and related corporations have attempted to leverage their small/medium sized business relationships to take advantage of the PEO potential for enhancing their bottom line, as we’ve seen in Oklahoma. Furthermore, you name industries that have had, or have leverage on business areas and you’ll find partners/alliances with a PEO, or attempts to create a PEO, such as in the trucking and medical industries.


The larger and medium sized PEOs employ sales teams comprised of coordinated, experienced, highly trained, client savvy personnel pursuing business, along with other approaches. We have found some smaller PEOs tending to rely on a combination of methodologies with the owner, wife or a close relative being the only person executing the marketing/sales functions. An interesting related model we’ve seen appear is the  “Employee Ownership Model.” Every PEO employee is given a shareholder stake in the company and the incentive to excel. They execute their daily job functions plus market/sell the company whenever and wherever possible, reaping a share of the profits. 


Some other strategies for growth, besides the sales force or partners/alliances, include the obvious acquisitions/mergers to obtain growth customers, with focus on their retention. Acquisitions and mergers have dominated in recent years as many companies have become legally, financially, or perhaps risk vulnerable. Others reached the limits of owner capabilities or owners just decided to “cash out” and move on. Of course growth companies and customer retention have been a primary focus over the years, not only because they enhance direct growth, but satisfied customers are great referrals. Unfortunately, customer retention suffered as a result of some sales personnel practices and sales personnel have also suffered!


Sales Personnel Image


We recognize there are many outstanding sales personnel in the industry, but the image of some who promise anything to close the sale whether the company can deliver or not, changed the industry and customer perspective. Of course some problems result from the lack of standards and controls by the PEO management itself. But on the positive side, it has resulted in closer scrutiny of “deals” with proposal controls at headquarters or regional centers. This includes using automated proposal systems tied to the Internet permitting review and approval before release, no matter the geographic location of the sales person, ensuring what has been proposed can be delivered and for the price. No surprises!


Today some PEOs shun experienced industry sales personnel when hiring. Over the past several years we have had conversations with PEO presidents and marketing/sales vice presidents and others, about recruiting sales staff. You would think they would be recruiting experienced PEO sales staff. Nope! Many told us they would not hire an experienced PEO sales person unless they had a proven track record of honesty, integrity and quality production, because typical sales types have too many bad habits. Instead they’ve hired personnel with a sales proclivity or hired sales personnel from other industries, with desired characteristics, training them in the business and related standards. Success? They appear to be doing well, but no solution is perfect. We’ll see. Remember evolution!


The Future


So where is PEO marketing/sales going in the future? Other countries! Yes that’s correct. Canadians have been involved in the industry for several years. Further, the outsourcing phenomenon has brought some India companies seeking PEO back office work. Some functions may support sales. Moreover, Japan has established a national organization to promote the PEO/HRO concept there. September 2004 the Japan Association for PEO (JAPEO) was created. The organization will be interested in partnerships and joint ventures with American PEOs, along with helping Japanese entrepreneurs establish companies, once the PEO business model has been approved by the Japanese government. Additionally, individuals in Central America have expressed an interest in starting PEOs.


So PEO marketing and sales are truly in motion, as we see more models emerge and other nations taking an interest in the concept making it part of the global economy. Continued success is based on industry evolution!



Virginia G. Frazier and Kenneth A. Polcyn, Ph.D. have been consultants to the PEO and HRO business since 1991. Previously, they were outsourcing service provider primarily to the U.S. government. Both are the authors of numerous articles, presentations and products for the industry. They may be reached at 239-540-0388. Ken’s recent book, Outsourcing: PEO to HRO Operational Issues, may be purchased from Xlibris at 888-795-4274 X 276 or online at He is also co-authored with Hiroshi Karibe of a Japanese book, Employment Revolution with PEO/The New Employment Business in the USA available from publisher Toyo Keizai Inc. E-mail:







For more information contact Deva Industries, Inc., Cape Coral, FL 33904; Phone: (239) 540-0388