Written by Sean McPheat |
With competition becoming fiercer, the economy sending fuel prices through the roof and buyers becoming more reluctant to telephone sales calls, more firms are choosing to employ their own in-house telesales staff to set appointments for the field sales teams. The immediate question that arises is what and how do you pay this inside sales force?
Commission on the Sale
The most obvious and seemingly logical answer is to pay the telesales representative (TSR) a percentage of the order when the field sales rep (FSR) closes the sale. However, I caution you. While this idea appears reasonable, attractive and cost effective…it is the exact opposite.
First, let me expose a few of the serious problems that arise when the TSR is paid via commissions from the sale. Then, I will give you a much better idea of how to compensate the TSRs.
#1: TSR Tries to Make the Sale Rather Than SELL the Appointment.
The biggest and most detrimental problem that occurs when the TSR’s income comes from closed sales, is that the TSR tries to look for sales on the telephone rather than appointments. The TSR must think about appointments that he or she believes will close, since that is how they are paid. Now you have people who are trying to determine if the prospect will buy rather than just setting a qualified appointment.
You do not want the TSR to be making judgements about who will buy and who will not. All they should do is set qualified appointments!
#2: The Lay Down Prospect Does Not Buy
You have a TSR that has no choice but to consider if the prospect will buy or not. They seek out the easy sale, the prospect who sounds as if he or she is just waiting with check-in-hand for the FSR to show up. The TSR finds what he or she believes is just such a lead, sets the appointment and mentally spends the commission before the ink is dry. However, the FSR does not close the sale!
Although as a true professional, you know that the prospect that sounds like the easy, lay down, is the one most suspect and usually presents a major problem. However, this will create severe feelings of animosity and resentment between the two teams. The TSR feels the FSR threw his or her money away, and no longer wants that sales person to run his or her appointments.
Additionally, as the TSR continually tries to judge and pre-qualify prospects as BUYERS, they will lose countless amounts of qualified prospects.
#3: FSRs Become Reluctant to Run Appointments
In the #2 scenario, the TSR felt the appointment was a sure sale. Conversely, the FSR felt the same appointment was a pure waste of time with an apathetic prospect. The FSR now becomes less than enthusiastic to run appointments set by the same TSR, and the same bitterness grows within the team.
#4: Both Have Feelings of No Control
One of the most positive and alluring aspects of selling is that you can have some control over your income and your destiny. However, with the above pay scenario, both the field sales and telesales people feel a distinct lack of control.
Personally, I would never consider working in a situation where my income was so dependent on the sales prowess of someone else! (Unless of course, I trained them myself) The TSR feels as if he or she has no real control over their income, and the FSR feels much of their income depends largely on the TSR’s skills.
A host of additional problems arise when you pay the telesales staff by commission on sales, but I think you get the idea. Often sales management chooses this compensation set up in an effort to save money. I assure you however, this plan could cost you more money than you can imagine. Worse still, is that it can cost you a lot more than just money.
Since the TSR does not close the sale and is not responsible to close the sale, why pay them on closed sales? The TSR is responsible for setting qualified appointments. More specifically, the TSR is responsible to SELL the appointment! Pay them for just that!
Posting December 7, 2011
How To Pay Your Telesales Team To SELL Appointments
Originally published: 5 December, 2011