|
Author: Paul Johnson Article source: http://www.agora-business-center.com/. Used with author's permission.
The temptation to use straight (100%) commission plans never goes away: "Let's put our salespeople on 100 percent commission. Then, if they don't perform, we're not out any money." For small, start-up organizations, the lure is irresistible, especially when money is tight and the company or the products they sell have no track record in the market.
Straight commission appeals to salespeople because of the freedom that comes with it. Because they receive no salary, these salespeople are unwilling to allow management to prescribe how they do their work. That includes hours kept, effort made, methods used, or product lines sold. The only real rules they must abide by are ethical. When salespeople are willing to give up salary, management must be willing to give up control.
For someone new to sales, finding a straight commission position may be a way to establish themselves as a salesperson. For a proven, effective salesperson, 100 percent commission may be the road to making loads of money by making lots of sales for their company. Unfortunately, most small companies with straight commission plans hope for the latter and wind up with the former. These inexperienced, undisciplined, babes-in-the-woods carry a high likelihood of failure, costing their companies untold sales opportunities during the "experiment".
If you choose to use a 100 percent commission plan, you must find salespeople who bring their own motivation to work every day. Each morning, the salesperson must have their own target to shoot for and a solid plan to get there. New sales people may have the enthusiasm, but it's unlikely that they have a plan that works. Conversely, many experienced salespeople know how to create a plan and go through the motions, but are no long turned on by the thrill of the hunt. They may be content with a level of sales performance that allows them to satisfy their lifestyle requirements, but underperforms the sales goals set by management.
The net is there's no way a company cannot invest resources in their sales team. Either you pay a salary and then plan on actively managing and developing your salespeople for success. Or, you pay straight commission, save the salary, then pay big dollars to replace unproductive personnel while you forfeit sales opportunities lost by ineffective sales people.
When you shift risk to salespeople by adopting a straight commission plan, you may in reality be risking your business. Think hard about what's really important to you when you design your sales compensation plan, and control your urge to use 100 percent commission.
© 2005 Paul Johnson. All rights reserved.
Note: This article is NOT available for reprint without advance written permission. Paul Johnson of Panache and Systems LLC consults and speaks on business strategy for systematically boosting sales performance using Shortcuts to Yes™. Check out more salesforce development tips at http://panache-yes.com/tips.html. Call Paul direct in Atlanta, Georgia, USA at (770) 271-7719.
Stress - A Modern Cause of Disease
Ever wondered exactly what stresses we are facing today? This article will help you understand why people get sick, why it is a combination of many factors of m...
Lesson #2: Different (and Profitable!) Ways to Use Smart Autoresponders
Seven-lesson email course that will power up your email marketing and profits...
Change Your Thinking -- Change Your Life!
The only thing in life we have direct control over is our thoughts and our thoughts determine how we experience life. Master the art of reframing your thoughts...
Is Congress Going to Lay the Groundwork to Include Education with the Steroid Legislation?
They have to assume that young athletes are aware of steroids and some perhaps use them. Then move forward accordingly and educate the youth on what they are an...
Safe Cyber Dating
Cyber dating is one of the most popular dating venues these days. No longer is it necessary to go to the bar down the street to find a date. No longer is it nec...
Stop Drowning: Nine Strategies For Managing Your Priorities
Learn 9 powerful ways for sales managers to gain control over their time and their life.
Cellular Phone Service
You can select the cellular phone service of your choice from one of the many cellular phone companies like AT&T, Sprint PCS, T-Mobile, Verizon Wireless, Cingul...
Sending Samples With Your Press Release-- should you or shouldnt you? Heres a guide…
When you begin to send out your press releases, you will
start to get calls and emails from the editors requesting
samples of your product. What do you do? We...
Paternity Testing Regulation: Help or Hindrance?
The French legislation has passed a law which prohibits testing for paternity without the involvement of the court system. Article 16-11 of the civil code state...
Jobless? You Stand To Be Rich!
Learn how a homeless man became rich without a job. How much money have you unknowingly missed out on?
Rent Control Rehab for the Well-Heeled
Property values have risen an average of 425% in California since 1980 and 115% in Los Angeles since 2000. If you have the means, escape the "perpetual tenant s...
Application Methods For Aromatherapys Essential Oils
There are many ways to use Aromatherapy's Essential Oils for therapeutic benefit for yourself and your family.
Increase Sales - Overcoming Barriers
Sales are hindered by three major types of barriers. Leaders who understand these barriers can deal more effectively with each of these issues and guide their ...
Warts and All - the HPV Virus
HPV affects up to 6 million new people each year in the US. This number is even higher than the infection rate of HIV aids.
Pay-Per-Click Search Engines – The Basics
Search engine optimization can take a long time to show results. The Google sandbox alone can delay optimization results by 6 to 8 months. So, what can you do t...
Our Guide To The Astragalus Root
This article talks about the Astragalus root for nutrition.
Internet and Network Marketing Works
Why the Internet and network marketing is the best home based business.
Finding The Perfect Diet for You
The perfect diet should be combined with a healthy weight management or activity program. Weight management may conjure up that dreaded "exercise" word. And exe...
Age Old Question: Buy New or Remodel Existing Home?
Your house doesn't have enough storage space, bathrooms, or counter space! Now you are trying to decide between remodeling your current home to address some of ...
Build Your Marketing Muscle
During a saxophone lesson the other day I realized how much regular practice can help a part time internet marketer. My teacher taught me a long time ago to jus...
Long Term Care Insurance
Long Term Care Insurance is needed in the event that a person becomes physically disabled, terminally or chronically ill. Healthcare will pay for doctor bills,...
Debt Reduction Program - Finding The Right Program For You
Here are some tips to finding a good debt reduction program for you.
The First Step and Most Important Thing in Learning Guitar
The secrets of learning guitar are base on the strong foundation. 1. Listening (Through ear training) 2. Daily practice(Both fingers and ears) 3. Look for the...
Christmas Gift Ideas
Christmas is such a special day. It is a day of giving and receiving love, joy and happiness. The Christmas spirit is very pure; just like the immaculate conc...
|
Print this page