Why is it that many employers will spend handsomely to staff their teams, but when it comes to a function like sales, they opt to go cheap?
Working remotely has afforded me the opportunity to work for companies around the world where it might never have seemed possible 10/15 years ago. Technology is accelerating change like no other time in human history. But despite the world being smaller and more connected than it ever has, I frequently come across businesses who are short-sighted when managing their sales functions.
Commission only based sales are great for cash flow. I get it. For the business owner this appears smart, but when you dig a bit deeper, is this really true?
In the majority of working relationships, a commission only sales person will be working independently, as a contractor of sorts. They have no reason to provide loyalty to your company or funnel every deal your way. This in itself could mean that their “cherry picking” just nets basic deals for you, perhaps it’s those problem clients at the bottom of their funnel. You don’t know and you don’t really have a right to know.
The salesperson has no reason to guarantee you any level of success either. You cannot base any consistency in cash flow around commission only – this type of model does not lend itself well to scaling your business or trying to solidify long-term growth. Although I have seen this happen, in a commission only structure I do not think it is fair for the business owner to try and set targets or specify minimum activity such as daily calls, weekly meetings, social activity etc. Commission only is very transactional – a deal is agreed, parties get paid, the end.
A commission-only salesperson has little incentive to care about the representation of your brand or accuracy in communicating your products and services. Yes, many salespeople will need to be relatively accurate here to actually secure a sale. But what about the promise they made to your new client for advanced features, a discount, or further services six months into the future? They said what they needed to say to complete a deal but you’re left trying to pick up the pieces when their long-term promises become eventual complaints and broken relationships. The damage done to your business and reputation could outweigh the benefit of the original sale.
If you want quality, pay for it.
There is a certain baseline level of work that good salespeople do for their employer which is often overlooked. Yes, it might be directed towards eventual sales or long-term business development but it takes the longer term forecasting of someone who is not just chasing their next commission only deal. This is where the skill of sales comes into play, especially in the modern sales environment.
What does that look like?
Representation of a company
I want to know all about your company, its history, the development of your products and services. I want to meet everyone in the team and I want to see the passion and story behind the business. This is what gets me excited to represent you and sell for you. Never underestimate the value of this. A good salesperson takes this passion and puts it in front of introducers, customers, friends, family, everyone!
Simon Sinek has become a global success because he translated the value of “I believe” into demonstrating how great leaders inspire action. If I’m part of your sales team then I want to believe. Transferring this belief into the right people is what generates the long-term results the great companies are looking for.
Client follow up and retention
80% of sales are made after the fifth follow up. Can a commission only sales person afford to wait this long? Will they still be selling your business to their lead when they get to that fifth, six, or seventh follow up? I have leads that have easily extended past ten follow-ups before they become customers – in one case this turned into an intro I made for them to another client before I could circle back to my sale!
Retention and consistency are important parts of the sales process.
Intimate knowledge of products and services (and the pursuit of this)
Taking a product or service and bringing it to life is what aids the great salespeople in converting sales. Hard to do this if you don’t know or care much about that product or service. In the beginning, I might not know much about your product but the big question is – do I want to know? Do I seek that knowledge? Do I want to get hold of the product and test it myself? Do I want to question your technicians? Do I want to make suggestions about the features, knowing they translate into the benefits?
Perfection of the sales craft
From time to time, I see a LinkedIn article that discusses the merits of salespeople being naturally talented or created. Like many, in my younger days, I thought sales was a natural skill. Talking to people might come naturally. Keeping in touch might come naturally. I’ve not come across anyone that has the many different qualities required to be great at sales from the start. It takes time, practice, repetition, and a willingness/hunger to learn.
In my move back to sales after a few years in marketing, I needed to get back into a vastly different sales environment from the one I left. Would the same habits and work patterns still be successful? No. Be serious about being good at sales, learn new skills and embrace new technology – link here to my previous article on the topic of remote selling.
Searching for new ways to do business
My previous point leads in nicely here – you’ve got to be willing to look for new methods. Does three hours cold calling per day cut it in the modern environment? Could that time be better spread with an hour on social media, an hour writing your next article, and an hour doing calls? Do you need to be face to face to get a deal finalised? Could you save time in the early parts of the negotiation through video conferencing? These are just a few examples but the good salespeople will always be on the hunt for new ways to do business.
In our social media, instant gratification, short attention span existences, the ways to stand out have changed. Many experts in their respective fields remain unknown because they cannot position themselves for a new audience. After a few years of writing I know I am no expert, but I recognise the need to put out authentic content on key subjects to try and connect with my audience. I love to read and I take some inspiration from the writers I love but practice makes perfect.
Will your commission only sales person take the time to write about your products with passion and circulate these thoughts to their communities? Becoming a thought leader and providing authentic content is a great way to connect and show knowledge in a relevant topic area.
Bridging the sales & marketing gap
The old adage of sales versus marketing. Every modern sales book that I have read states the needs for sales and marketing to come together and share a common purpose, yet in so many companies the two departments sit very differently. In a sales environment, I want high-quality content and material that I can use with potential clients. I want the freedom to suggest new ideas and to work with marketing to create innovative solutions to present our company. I want marketing to know that I spend a lot of time engaging with clients and that their feedback is available because of the relationships that I have nurtured.
Whilst it is often true that the commission only salesperson will be directed purely towards maximising their earnings from each deal, a paid salesperson is often able to take a more pragmatic view. And overall, whilst this might mean less initial commission than their commission only counterpart, the security of a base salary and position within a company enables them to take a longer-term approach to each deal. If there is the opportunity for repeat commission and building a solid long-term relationship with the client then this can be considered – and this would be considered a bigger win for most companies.
The sales person’s trust in the company to successfully execute the service or provide the product is often heightened because they know the company so much more intimately. This helps them build those long-term relationships that can be so lucrative.
Personally, I have found that playing a key role in the quoting and pricing process has meant I am more invested in a deal too. If I’ve helped create the sales pitch documents and get a say in pricing it helps me present my solutions with much more confidence. In some roles, I have been instrumental in putting these tools and processes in place.
Do you pay your managers, marketers, designers, technicians, cleaners a share of the money from each deal you make or product you build? No. A salesperson still has the same challenges in their life – monthly rent, bills, food etc. I like incentivizing a salesperson in the same way you might incentivize a manager through increased profitability or a marketer through increased consumer awareness but don’t make that the only way we can earn – the good salespeople bring so much more to the table.
Show us faith and we’ll pay you back time and again!
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