Sales and Selling


Commission Only Sales Team

Commission Only Sales Team - Unlike fixed wage employees, commission only sales teams are motivated by an unlimited capacity within an organization to earn income. These position are often attractive to alpha type individuals who feel that the rewards of success and being well paid are what they desire.  

Recruiting and motivating these Alpha individuals can be delightful when they achieve sales goals and objectives. It can also be challenging, since classically Alphas are individuals who don't enjoy completing paperwork or being bound by procedures.  

Understanding the equilibrium that managing commission only sales teams require can produce revenue that meets or exceeds targets, while allowing these sales agents to earn a handsome living.

Former EDS Chairman and One Time Presidential Candidate H. Ross Perot was so motivated by exceeding his quarter that his goal was to exceed his annual quota at some point in the company's first quarter.  

Many methods for creating a compensation plan are available and vary widely and often reflect industry-specific standards. However, many ground rules cut across industries and they can provide a way to establish your company's sales incentive package.

Brad Sugar from The Action Coach makes the following points:

One of the greatest burdens on any business is that of team costs.  Holiday pay, insurance and sick days, are all examples of wasted money that comes with paying wages. 

By employing sales people on commission only, you can avoid many of these unnecessary costs.  You have the added benefit of knowing that your team has to perform to survive.  If they don’t make sales you don’t pay them. 

This way you can be sure that your company is not carrying any unwanted passengers.

Hints and Tips:

  1. This is the safest way to run a business – pay on performance.
  2. The commissions need to be terrific.
  3. It’s a great way of testing people who usually leave voluntarily if they don’t perform.

Provide Team Training:

By ensuring that your team is multi-skilled you can cut down on costs.  Team holidays become less of a concern as other team members are then able to cover for them. 

You may also find that you need to outsource less of your work and can better utilize the time of your existing team.

Hints and Tips:

  1. Training team members is one of the best investments you can make.
  2. By developing multiple skills in your team, you become far less reliant on individuals who may get sick or leave.
  3. Constantly encourage team members to broaden their skills base.
  4. Make sure at least two people within your organization know how to do any given task.

Team Incentives Based on Margins:

Why should you be the only person concerned with margins?

Your team can assist you in boosting your margins, particularly if you make it worth their effort.  So, offer them an incentive based on margins. 

An example of this would be if you had standard and discount prices.  Simply pay your sales team a higher commission on anything they sell at the full price.  This will allow you to fix your margins, not just your commission percentages.

Hints and Tips:

  1. All team members need a clear understanding of what the margins are.
  2. Offer a larger percentage reward for sales made at full margin.
  3. Spell out the numbers … your sales team need to know at what level their commission stops.

Budget: $250 - $1,000 weekly