Commissions for SalesIf we as a sales outsourcing company would charge only commissions for sales, we would have 100 times the number of clients we have now. It seems that everybody out there is searching to find a sales outsourcing company to work on a commission based only scheme, but is that true? I think everyone of us is going to agree that commissions are a vital part of sales. If that is the case where is the controversy? There are several factors to consider when commissions for sales are being offered. The first question is: What is the real intention behind? Someone is going to say, that this is the only way to motivate a salesperson. But is that truth? Partly it is, but to motivate someone you must give him a realistic goal to achieve. If for example you are a weightlifter and your personal record on snatching is 100 kg, it is going to motivate you to set up the standard at 110 kg, to train harder and better yourself. But what happens if I set the standard to 300 kg? Are you then going to be motivated? Or you are not even going to attempt to start training? Or maybe is your intention to start selling your products with 0 risk? Do you really think that by having a product you are going to find someone to take the whole risk of the operation in his back, to sell it and if he doesn’t, well… he lost 1 or 2 months of his life and you lost nothing? If that is what you think and you believe that you are going to convince someone to work under that basis, my answer is: Get down to earth. NO ONE WORKS FOR FREE – NOONE. What is the sales cycle of your product? Are we talking about a product that you can sell immediately or maybe after a couple of days or at least within the month? Or are we talking about an expensive software solution that might take a year to sell? What is the frequency of sales generated? How many products or solutions are going to be sold within a fixed amount of time? 1, 5, 100? And What is the selling price of the product and the % of commissions for you? For me the hardest part as a managing director of a sales outsourcing company is to find competitive salespeople. That is the hardest part even when I pay a fixed amount every month plus commissions, let alone on commissions for sales only. How can commissions for sales really work? Follow the next tips:
- Salespeople (like everyone else) love money, they are motivated by money and they should make money. That is why they are on sales. Make sure that your 5% best salespeople make really good money, make sure that the mediocre ones are winning enough to stay on the game but keep them hungry enough to want to go to the top 5%. The bad ones should make some money but not enough to stay in this work. You want them to leave by them selves within the next months to come.
- Do not expect wonders from your salespeople. Set realistic expectations and achievable expectations so that they are motivated. Do not only count the sales generated but also include other milestones in this process to be celebrated and rewarded. First sale, first key account, best rookie salesperson of the month and so on.
- Be empathetic, listen to their problems and have empathy. They are hard working people, fighters, they bring the money to your company. I always had a tremendous respect for salespeople
- Do not judge too quickly. There are salespeople that sometimes they underperform, that can happen. Relax, give them a holiday, do not be too harsh with them.
- Say BRAVO, say welldone, it counts, it really does. Recognize them, have passion for their successes, do not be emotionless, show interest in what they are doing. It does not cost you nothing and it really makes the difference.
- Differentiate between an intentional bad behaviour and a mistake. For example, I would have 0 tolerance if someone comes late to the office every day. That is something that he does on purpose, is disrespectful and something I can not tolerate. But if someone makes a mistake on the communication with a client, even if a big deal is in stake, DOESN’T MATTER, forgive him, and go forward. Mistakes happen. In our sales consultancy, Vparagon, I even encourage my salespeople in cases of doubt to make the step ahead and potentially lose a customer, instead of getting in a no answer mode. Better to “force” the outcome, even if its negative than to wait for an eternity. In sales there is a WON or LOST case, there are no middle cases.