“On commission only, it’s one week you got it, one week you don’t.”
“Commission only is more about luck…”
“With a commission only…YOU CAN WRITE YOUR OWN PAY CHEQUE AND BE YOUR OWN BOSS!”
You have heard all of these sentiments before and the question arises as to exactly what is correct? Is it insane to work commission only in this today’s modern, post boiler-room era? Or is a straight commission still a realistic and viable option in this day of the sophisticated consultative sales professional?
The Good and The Bad
To the question, do commission only job positions still make sense in today’s modern era of professional selling, the answer is YES…and NO. The truth is that in some cases commission only is a good thing, and in others it could be a horrible thing. The trick is to know the difference. So allow me to slightly depart from the norm as I give you my take on this.
The difference is a commission only position is often still the best way to reap the largest pay-offs and tap an unlimited earning potential. However, today there are many sales organisations out there that cannot deliver what they promise. While some sales companies simply do not understand that their sales numbers and the science of what they do, does not add up; others deliberately USE and ABUSE innocent, unsuspecting sales people for profit.
Let’s face it, besides one-day-would-be actors and actresses, inexperienced sales people are the most exploited group of employees in the world. The key is to know when you are being told the truth or when you are being sold a line of poppycock.
Keep in mind the following 5 key points when considering a commission only position.
#1: A Proven Sales Process
First make sure the company already has a PROVEN and DOCUMENTED sales process that works. The firm should be able to show you a plan of action that if followed, will result in success. In other words, if you do exactly A, B and C, you will make sales. Then be sure they can produce someone who has personally done exactly that.
#2: The Numbers Add Up
Once you have a step-by-step sales process, then calculate the numbers, the science and data and make sure it all adds up. As an example, let’s say they told you that 40 cold calls, on average, will result in 10 appointments, and 10 appointments will give you two sales. So you run 10 appointments and close 2 sales every day. They said that the two sales average yields are £125 each in commission. Therefore, the perspective is that if you follow the plan, you will EARN £1,250 per week. Ok, sounds good.
However, as you begin to add up the numbers, you note that the average sales presentation is nearly 1 ½ hours long. If you close the sale, it is closer to 2 ½ hours. Add in travel time between appointments, prospecting time and other sales activities, and you find that there is not enough time in a day to possibly run 10 appointments. In fact, you would be hard pressed to complete 5 appointments in a single day, resulting in a weekly income of closer to £400 to £600.
Also, figure how long it will take for the money to actually begin to come in. How long after the sale do you get paid? How long does it take to end up as cash in your pocket? What problems can arise after the close that can kill the sale? Figure out how long it will take before you begin to earn money. Then figure out if you can afford to wait that long without an income.
#3: Pre Sales Support
Adding to those numbers above is the amount of pre-sales support the organisation affords. Is there an active and effective marketing campaign that will precede you? Does the company have a professional quality web site and sales literature? How is the company’s professional reputation in the marketplace? Take into consideration the amount of pre-selling you may have to do yourself and the time it will require, if these things are not in place.
#4: Post Sales Support
Likewise, figure into the equation how much time you may have to spend on post sales support and follow up. Does the company provide for customer service or is that you? Do you have to handle all of the paper work, financing, set up and installation? When a customer has a problem, do they call the office or you? Think about it; if you have to handle customer service as well as sell, how much less time do you have to sell? And you will only get paid for when you sell.
#5: The Product or Service
Finally, and perhaps the most important thing to think about when considering a commission only job, is that you truly believe in and trust the product or service that you sell. Selling anything that you are not honestly enthusiastic about is not a good idea. However, working on a straight commission strictly for the money is a catastrophic mistake.
This tip also goes out to those in management and hiring positions for companies who believe that gathering a bunch of unsuspecting rookies, promising them the world, and then throwing them to the wolves on a commission only basis, is the cheapest and most risk-free way to go. The fact is that this scenario often creates people who are out there representing your product and name, and they are desperate.
The situation creates sales people who are at the point where they are willing to say and do almost anything to close a sale. This can and always will cost your firm far more than the small base salary you could have given up.
So, does working on a commission only basis still make sense today? Not when dealing with a company that does not have the proper foundation, history and infrastructure to offer a direct commission. Such companies basically want you to TEST MARKET their products for them, at YOUR EXPENSE.
However, for a company that has the foundation of an established and successful sales process, exceptional pre and post sales support, and a great product or service, a direct commission compensation plan could literally make you rich.
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We all heard the old adage, “Sell the sizzle, not the steak.” However, I often wonder if some sales people truly understand the concept, or feel that it is still relevant when dealing with today’s modern buyer.
In a word, YES. From the beginning of time until the end of such, you must understand how to present the benefits, results, outcomes and problem solving solutions of what you sell. You must know how the VALUE of what you sell is worth far more than the sum of its parts.
In today’s high tech, futuristic era, it is tempting for sales people to concentrate too much on the makeup and “nuts and bolts” of a product, and less on what the product DOES for the buyer. Below is a quick Water Cooler style story that demonstrates why you must still sell the sizzle!
What Does It Do?
Just after the invention of the telephone, sales people took to the streets around the world selling this marvelous new invention. You would think that to sell telephones when they first came out would be extremely easy. Yet, many sales people had problems closing door-to-door sales for this new and advanced product.
However, one sales person consistently outsold everyone else, with sales nearly 300% higher than average. So, a wise sales manager set out to find out why.
The manager first rode along with some of the average sales people and found they had essentially the same sales presentation at the door:
“Hello! What I have here is a new invention called the telephone. Unlike the telegraph, this telephone takes your voice and breaks it down into electronic signals. It then takes those signals and transmits them across town via those wires overhead. The signal arrives at what we call a switching station miles from here, where the operator connects your electronic location with another location via a switchboard. Then, people miles away can hear you and you can hear them!”
The manager noticed that the sales people had vast knowledge of the product, but saw minimal results. He then went out with the super sales person whose presentation at the door went more like this:
“Mum, what I have here will allow you to talk to your friends and loved ones who are hundreds of miles away, and speak with them just as if they were sitting right here next to you in your home!”
Too Much Knowledge
As you gain expert knowledge of your product, be careful to remember that much of what you know is for YOU and you alone. Most people could care less about exactly HOW their car works. Rather, they want to know that it will transport them to where they want to go and do it in the style for which they desire.
While some products do require mechanical or technical explanation and selling, be careful not over do this. Think of those technical aspects and equate them to their beneficial counterpart.
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(Image by Brian Holm)
I talk and teach constantly about “buyer traits” and how to recognise and deal with different types of buyer personalities. However, over the years I have noticed that sales people also have some distinct traits or selling styles as well.
So, I thought I would share this educational, Water Cooler titbit about a few Sales Personality Styles and some of the potential drawbacks of each. Which one of the sales styles below most resembles you?
The Doctor sales style has become quite popular as more sales people attempt to become true advisors to their clients. The Doctor style is one where the sales person not only asks continuous and pertinent questions, but also listens with empathy.
The Doctor thoroughly examines the patient (prospect), carefully diagnosis the illness (needs) and prescribes a remedy (solution). And, hey…how often do you argue with your doctor?
Potential Drawbacks for the Doctor
The Doctor sales style is only effective when the sales person has captured the total trust of the prospect. The sales person must be a bona fide expert and the prospect must BELIEVE that he or she is. If the sales person fails to gain the faith and conviction of the prospect, the Doctor style comes across as a facade and backfires.
While the teacher sales style does more talking than asking questions, the teacher is quick to ascertain the problems. Most Teacher sales people sell products or services that require less discovery, as most qualified prospects have identical needs.
The Teacher is a great educator and is able to enlighten the prospect and demonstrate capabilities and benefits perfectly. Think about it…if the prospect knew and understood your product the way you do, wouldn’t they buy it?
Potential Drawbacks for the Teacher
First, the Teacher needs to refrain from OVER TEACHING. When the prospect has too much information, it complicates the decision making process. Also, the Teacher must be very careful not to ONLY teach. Often the Teacher uses too much knowledge and logic and not enough emotion. This results in very educated prospects who buy from someone else.
“Your wish is my command.” The Genie sales style is exactly what it sounds like; the sales person who is able to convey to the prospect that anything they ask for, anything they need, the Genie will provide. The Genie is an expert in after-the-sale customer service and building client loyalty.
The Genie’s unyielding commitment to satisfy the customer eliminates competition and makes price a non-issue. By the way, these Genies always grant more than just three wishes!
Potential Drawbacks for the Genie
The Genie has to be careful not to become just an ORDER TAKER, and remember that contrary to popular belief, the customer is NOT always right. Also, the Genie has to be weary of some of today’s modern buyer negotiation strategies. Often what appears to be an interested buyer who is asking for a little more; is actually a scheming prospect, playing companies off each other.
Which Are You?
You may see some of these traits in yourself, or perhaps you directly relate to one particular sales style.
Wait; don’t tell me…you are a teaching, doctor who happens to live in a magic lamp, right?
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For a quick break from the norm, here is another one of those witty water cooler stories I thought you might find amusing. As always, what follows is just a story I heard from a sales person, who will remain nameless.
Also as before, I do not sanction, verify, agree, or approve of the follow scenario, nor am I suggesting that you do anything like this. So, lighten up. It’s just a witty story.
Thank You Very Much
The sales person had unfortunately run across one of those absolutely horrible, rude and obnoxious prospects. The prospect was so unbearable that not only did he hardly allow the sales person to proceed with her sales presentation, but he made it clear that he was doing it on purpose. The prospect deliberately USED the sales rep as amusement while having no genuine interest or need in the product and services.
When the sales person finally realised the situation was hopeless, she began to pack up her sales material to leave. Just then, the prospect, who was a very large man, stood over the sales rep; a petite woman, and with a snide, sly, almost evil grin said…
Prospect: “Ha. Not a good day uh? Well I’m sorry I wasted YOUR time.”
Sales Person: “Oh NO! Not at all. You didn’t waste my time. In fact I’d like to thank you. So thank you very much!”
Prospect: “Oh, yeah. Why’s that?”
Sales Person: “Well, my statistics tell me that if I show this presentation to five business owners; I will meet four idiots and one sharp business person…”
The sales person extended her hand to shake and the prospect shook her hand as she concluded…
Sales Person: “…And I’d like to thank you because I know that I only have three left. Thank you.”
Prospect: “No problem, you’re welcome.”
About five minutes later as the sales person was driving off, the prospect came running out of the business…
Prospect: “Hey!! Hey! Did you just call me an idiot?!”
Sales Person: “Have a good day…”
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Most of us work so hard and are so serious about our profession, that I thought, every once in a while, I’ll take a short break from the norm, and expose a bit of the lighter side of our business. Watch for a few short Water Cooler Stories every now and then, beginning with this one.
Handling the Abusive Prospect
If you have been in the world of professional sales for any length of time, then you have probably run into the impossible, insulting, horrible prospect.
I am talking about the prospect that is abusive, unreasonable and simply impossible to deal with. The famed motivational speaker and sales trainer, Zig Zigglar used to say that there are only about six or eight really, bad, horrible, terrible prospects in the whole world. That’s all, just six or eight. But they move around a lot, so you are bound to run into one of them every once in a while. Here is a story I heard from and sales person and how he handled just such a prospect.
A Water Cooler Disclaimer
Before I share this story, I want to make it clear that I do not agree, disagree or sanction anything that happened in this incident in anyway. Nor am I giving advice on how to handle such situations. This is simply a story I heard and thought you might find amusing.
Incoming Cold Call
The sales person answered the incoming call, only to find one of those six or eight prospects on the line. The prospect immediately demanded a price for a combination of products and services that was impossible for the sales person to quote.
The sales person patiently tried repeatedly to explain and get more information, but the prospect would not listen and began with the abusive, foul language. After what must have seemed like hours, the call ended like this…
“Look! I told you what I want! Just give me the price for the one XYZ tool, right now!”
“As I said, Mr Abusive, they are not sold in that way, so I cannot…”
“I said I want a price now! Answer me!”
“I said, Moby Dick. You know, the novel? It’s the last book I read.”
“SO!! WHAT THE %^^#&*!!!bleep87! bleep* DOES THAT HAVE TO DO WITH ANYTHING?!”
“Well, nothing really. But I simply cannot answer the question you are asking me. So to be polite, I thought I would answer a DIFFERENT question instead, like what is my favourite book, answer, Moby Dick.”
Sean McPheat MTD Sales Training
One of the main questions I get from sales people is what to do when trapped under ineffective, negative, de-motivating or otherwise, bad sales management. Being a sales director myself, I hesitate to align myself with unfounded complaints about sales management. However, being, first and foremost, a sales person myself, I must address this issue.
Let’s face it; there are some, unethical, under-trained sales people out there that often make things harder for all of us. However, if you know me, I never blame the sales person or the sales team. As far as I am concerned, if you are in a position of leadership of a sales team, then almost anything that happens is the responsibility of the sales management.
I believe even the individual failure or success of the sales person is ultimately the responsibility of the sales manager.
Yet, the sad fact is that often people in positions of sales leadership are those with little or no practical experience or understanding in the field for which they manage. If you happen to be one of those unfortunate sales people (who keep writing me) under the control of a slipshod, inexperienced, micro-managing, penny-pinching, self-serving sales manager, then the following three ideas will help you better manage your sales manager.
#1 – You Are Involved
The bad sales manager will usually have a fragile self-esteem and thus, have a need to be involved in everything and anything that happens to the point of hampering you from doing your job.
To handle this micro-management, try to keep the manager involved. Send an email, a text, say something as you move on to get done what you know you need to do. The key is to keep the micro-brain involved JUST enough so that he or she will FEEL involved enough to stay out of your way.
#2 – You Are Responsible
When you achieve success, the big sale; let the manager know that, in some way, he or she helped make it happen. Don’t misunderstand me, I am not talking about lying or appeasement; it is the truth! (Just not the way he or she may think.)
#3 – I Thank You
As good sales person, you will eventually begin to demonstrate high levels of success and surpass sales goals. However, an egotistical sales manager will often view your accomplishments as a threat.
Find a way to thank the sales manager for the opportunity he or she gave you to enable you to reach such success. Once again, this is not misleading; it is true.
What’s Good For the Goose…
As a good sales manager manages sales people, sometimes, good sales people need to manage the sales manager.
Sean McPheat MTD Sales Training
Have you downloaded my latest report “The Sales Person’s Crisis”? Over 10,000 sales pros have.
Click on the image below to find out why your very existence as a sales person is in doubt…
Ok, when the sales person started with your firm, you thought that he or she was a prodigy. You then invested the time and money to get the sales rookie up to speed. You eventually established difficult, yet achievable goals and quotas.
A Big Deal
Finally, the sales person began to hit the mark. The first few times that happened, you where ecstatic! You clearly demonstrated appreciation for the hard work and dedication of the sales person with congratulatory statements, awards and spiffs. When the sales person began to achieve the numbers, it was indeed a big deal, as you know the work it requires.
The Uncommon, Common Place
Then, after the sales person begins to hit the mark over and over, week in and week out, and even with you constantly raising the bar, you know you have a winner; a superstar.
When that understanding sets in, you must be aware that often you now begin to EXPECT RESULTS that are above the norm from this person. You begin to lose the excitement and appreciation you once felt. The sales person’s uncommon sales results, now become a common occurrence.
The Thrill Is Gone
At this point, usually in sales meetings, the admiration and congratulatory recognition dissipates and it is simply the same sales star doing what he or she is expected to do. It becomes very easy to begin to take this person for granted.
You have to remember, that while the reaching that high-standard of achievement has become common place for the sales person, the effort and hard work remains. It is true that many parts of the sales process may have become easier and more routine for the sales star, continuing to deliver exceptional results, still requires exceptional effort.
Appreciate Every Drop
You have to take precaution about beginning to become lethargic in your appreciation of the achievements of those who constantly achieve. Usually management spends so much time working with and pushing those who fall short, that those sales team members that are exceeding, get little attention.
You must continue to pay attention to, recognise and truly appreciate the achievements of the superstar sales person just as if he or she achieved such success for the very first time.
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For some reason, many sales people still feel that they and the prospect are on different sides of the issue. Many sales professionals today still suffer from the outdated thinking that selling is a battle; a contest.
The whole though of “winning the sale” is an obsolete concept. Yet, you hear it all the time, sales people and management talk about winning or losing the sale. The thought is that if you close the sale, then YOU won. However, if you do not close the sale, then the prospect won.
The inherent problem this type of old-fashioned, smile & dial era thinking is that someone HAS to lose. The sales person and the prospect are on different sides of the fence. The prospect does what he or she can to NOT buy, by offering objections. The sales person in turn, does what he or she can to overcome those objections and WIN the debate.
To reach a level of true success in the world of professional selling, you need to understand you and the prospect are not on different sides. You are on the SAME side. There is no debate
A Shared Goal
You and the prospect want the same thing: for the prospect to make the best decision. When the prospect objects, it is not a problem just for you. It is an issue for you BOTH. Approach the objection with the understanding that you need to help the prospect deal with the issue so that you can BOTH get what you BOTH want. Be careful not to think that you want different outcomes. When you do so, you create an adversarial attitude in your mind that becomes evident to the prospect.
You Either Both Win OR Both Lose
There is no win-lose situation in professional selling. Either you both win or you both lose. When you view the close as a win-lose scenario, it affects how you think. If you believe that only you lose and the prospect wins if the prospect does not buy, then you can only think in terms of yourself.
As you are closing, beginning to persist and overcome objections, in the back of your mind you will be thinking about your paycheck. You begin to think of your commission and pride and not the loss to the prospect. This is only natural if you are thinking that you must WIN. This feeling comes through loud and clear and the prospect feels that you are pressuring them for your own good and not for their benefit.
Persistence Is Welcome
However, when you believe that if the prospect does not buy, THEY will suffer even worse than you will; then your persisting takes on a different tone. When the prospect feels that you are persisting because you genuinely believe that it is in THEIR best interest, they then understand and appreciate your persistence.
The sales process is not a fight. It is a dance, where you must gracefully LEAD your partner across the floor.
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