Sales compensation is a tricky thing for some companies, who’re reluctant to give away profit. But sales commissions can benefit your company in a number of ways.
Commission is motivating
The idea that staff should prioritise the company above their own interests is a nice one, but it’s simply not grounded in the facts. Motivation is essential if you want staff to perform at their best. Remember that for a lot of people, more money is a strong motivator.
And, naturally, your sales staff are the team you want to motivate the most. Without them, your business can dry up fast.
Commission means more revenue
Companies that object to a commission-led environment usually see the size of commission payments from their industry and wince. However, they’re not thinking in terms of what those commissions really mean.
Imagine paying out $100,000 a year to your top salesman. Now that’s a LOT of money, for sure. To a small business, it’s a massive payment. Nigh impossible. But now imagine that this salesman has made you $2,000,000 in revenue; then, $100,000 is just his cut of 5%. Would you get rid of that salesman? Of course not!
Don’t think of commission… think of just how much bigger the revenue will be to the company.
Commission gives more certainty
Measuring results gives employees and companies more certainty. It’s motivating for staff to know exactly what they’re contributing to the company. This motivation is intrinsically linked to the company’s success.
Reviewing staff performance for many businesses is too subjective. They grade staff according to how they ‘think’ they’ve performed. This can be awkward for the company, and frustrating for the staff member who’s put in years of extra work but doesn’t get rewarded because ‘subjectively’ the company isn’t sure how their work is paying off.
Commissions require specific tracking, which lets everyone know where they stand.
Commission attracts the best staff
The best salespeople thrive on competition and measured performance. They want to excel, and to be rewarded for excelling.
In a commission environment, you’re giving your staff everything they need to thrive and reap the rewards. The best salespeople will go where the rewards are, so you give yourself a better chance of attracting them. Commissionly is the first step.