So, you’re ready to get business rolling again and you’re wondering if a commission only sales compensation plan will get you a good seller who can make a difference to your business without bringing additional financial risk into your world. The simple answer is a resounding…maybe, but probably not. It really depends on what type of business you have and whether you are comfortable with a high level of turnover.
Let’s first look at your particular business. Has anyone ever made a living selling your product or service on a straight commission basis? Is there someone you can point to in your organization about whom you can say “see Alan over there? He made $204562 last year.” If you cannot answer yes to both of these questions, you probably cannot continue down the commission only path. Seeing a path to good income is absolutely an essential element of getting a serious seller to consider your commission only offer.
An additional element of a company that can use a commission only compensation plan is that they make an ongoing investment in the success of the commission only salesperson. An example of this would be that the company will set up appointments for the salesperson, in effect, doing the cold calling for the salesperson. Home improvement companies will often have this compensation strategy and can indeed show people who are really making a lot of money doing what they will ask new sales reps to do.
Bottom line is that this compensation strategy will not work for the vast majority of business types we’ve worked with. And if it does work, as in the example of the home improvement business setting appointments for their salespeople, you will need to understand that you’ll always be in the recruitment business as turnover will be very high.