Through his work, Aaron has seen what works and what doesn’t. Here’s snippet of his take, from Predictable Revenue, on sales compensation plans with that include commission-only salespeople.
(Want more? Check out the book on Amazon.)
Should You Consider Commission-Only Salespeople?
- Reduced risk in hiring (there are still time and opportunity costs).
- Salespeople a highly incented to close business.
- If your sales cycles are more than a month or two long, commission-only salespeople will begin starving before they can realistically close enough business. They are more likely to fall out before you can see whether or not they will really work out.
- The company will attract more inexperienced salespeople that can’t get better jobs.
- Commission-only increases the motivation to “do wrong” to close a sale. You do not want desperate salespeople representing your company. They will increase your liability, decrease your customer success and satisfaction, and wreck your culture and morale.
- Erratic compensation and lack of reliable income means your sales people have more financial problems, ironically distracting them from work goals.
If you have a “churn and burn” culture that sells commoditized product, perhaps commission-only sales is a way to go.
If you want to build a solution-selling, high-value sales force, commit the team and company to invest in their success just as much as you expect them to invest in the company!
Aaron Ross is an author, speaker, and managing Director of Predictable Revenue, Inc., which helps companies multiply sales. He is also CEO of PebbleStorm, Inc. Find his newest book Predictable Revenue on Amazon.
About this series: We are proud to present sections of Predictable Revenue. For more about the series, check out our Q&A with Aaron.