In ancient Rome the highest compliment was to call someone a Citizen. Conversely, the worst insult was to call someone an Idiot. Someone who put their own short-term interests above the good of the community was seen as an Idiot.
I’m seeing some pretty idiotic behavior these days. I’ve numerous friends who are looking for work. Many of them are in sales. The trend today is to ask people to work for commission-only. No draw, no base plus, just “we’ll give you a percentage of what you bring in.”
Commission-only positions are not new; the concept has been around forever. They particularly thrive in hard times. The idea is that I as a business owner am “giving” you, the salesperson, the “opportunity” to make some money. Seems Darwinian, the fittest will survive, the cream will rise to the top, the best man/woman will win.
The problem is that the relationship, if there can be said to be one, is based solely on the transaction. Close the sale and management pays. Period! The salesperson has no investment in the relationship between the company, its brand and the customer. The salesperson only gets rewarded for making the sale and then s/he is on to the next sale.
There are few businesses that don’t benefit from repeat business. And even those who offer one-time services still profit from good word of mouth. The reality is that commission-only salespeople are not rewarded for service; they have no incentive for building/nurturing sustainable relationships; they’re only paid for closing the sale.
Now, you may be thinking, I’ll monitor their behavior, I’ll make sure my customers (the reason my business exists) are looked after. Upon what evidence am I supposed to believe that? If your customers are no more valuable to you than to put them in the hands of someone you’re not willing to invest in even a subsistence salary why do you expect that person to look out for your relationship with them? After all, you don’t care enough about your salespeople to provide them with the peace of mind of knowing their basic needs are taken care of so they can concentrate on building sustainable relationships with your customers.
People only take commission-only jobs when they have no alternative. The overwhelming majority will jump ship first chance they get. And why not the company has made no investment in its “relationship” with them; why should they feel any allegiance to the company? There is one exception and that’s where people are offered a piece of the business in return for the sweat equity investment they are making. Those situations are fairly rare outside of the MLM (Multi-Level Marketing) arena.
My Dad used to make some of his sub-contractors revise their estimates up. He would say, “You can’t make enough money on this job at this price. As such, you’re not going to give me the attention I need.” He used to tell me it was a lot more expensive in the long run to have to keep looking for new subs than it was to pay a living wage to people he could depend upon.
The same holds true here. You depend upon your sales force to take care of the reason you’re in business, your customers. It’s only enlightened self interest to invest in your relationship with your salespeople.
Commission-only positions might look good in that you’re not risking any of your cash on hand; the only problem is you’re risking the entire enterprise’s future cash flow and that’s just pure idiocy.
><(("> Gayle Turner
Gayle is a ><(("> Team Member at Catch Your Limit, a consulting firm headquartered in Richmond, Virginia. To learn more, visit www.catchyourlimit.com.