OPEN Forum community member Wayne Cichanski, cofounder and managing partner of Digital Blitz SEO, recently asked: “I am looking to grow our sales staff and haven’t had much luck building a sales team. Are there still people out there who take on commission-based sales?”
Viable Sales Option
If your product is superior and your marketing materials and sales pitch are solid, qualified salespeople will want to work with you on a commission basis, says OPEN Forum community member Bob Nelson, president of POWER Retailing . “Hungry salespeople will work for a performance-based fee, but your company must have a proven track record to show them,” he says. “It’s all about your integrity, products and history of sales.”
When the stars align, commission-based sales are a win-win for you and the salesperson. You pay out your hard earned money only when a sale has been made, and the salesperson gets the opportunity to benefit financially from selling your high-quality, proven product.
Provide Training
In order to be successful, a commission-based sales strategy must provide thorough training to the salespeople, says OPEN Forum community member Marc R. Enriquez, founder of Resonant Advantage Marketing. Commission-based sales will work if “your company’s sales process is solid and you can train them to find and qualify leads and sell your services,” Enriquez says.
The training should include a thorough review of your product or service, as well as an explanation of your customers and what influences them. Also include an overview of how your customers have purchased in the past.
How to Find Qualified Salespeople
Enriquez suggests advertising for commission-based salespeople anywhere you would post jobs, including online venues like Craigslist. When posting the position, “make your application process itself a test as to whether a person can follow directions,” Enriquez suggests. “Don’t make it as simple as allowing the applicant to reply to your Craigslist post. Those who do will immediately disqualify themselves. This saves you a lot of time in dealing with better quality candidates.”
Base Pay Versus Straight Commission
While straight commission is by far the least expensive option when it comes to hiring a salesperson, you may want to consider base pay plus commission or a bonus structure, says OPEN Forum community member Bennett Johnson, a small-business consultant, coach and founder of Arete Business Methods. “There is plenty of research that says a combination of base pay plus commission or a bonus structure is the most effective tool for motivating top sales team performance,” he says.
Because a base pay guarantees the salesperson a salary, it may be easier to find someone to sell your product or service. As an employer, you can also set quotas that must be met in order for the salesperson to keep the job. You can also pay salaried employees less commission than non-salaried ones, but this is offset by the fact that you have the expense of an employee without the guarantee of any sales.
Encourage Commitment
Unless you have a lot of sales to be made, commission-based salespeople tend to work for other companies or even hold full-time jobs, and that can be problematic, says OPEN Forum community member Avi Cyperstein, who oversees public relations for LUX-HAB Services.
“It is definitely very challenging to find the right candidate. I am currently looking for a few commission-based salespersons to promote our company that helps people who struggle with addiction to get placed into treatment facilities,” Cyperstein says. “Most of the staff we have right now on commission work part time, as they have other jobs. This means we become more of a ‘side thing,’ which isn’t that great for us.”
Cyperstein thinks the solution to the non-commitment issue is to find salespeople who believe in their ability to produce, and he also thinks that small-business owners should offer additional opportunities to salespeople once their hard work pays off.
Make signing on as your salesperson exponentially lucrative to potential commission-based salespeople. This is something that Cichanski plans on doing once he finds the right sales team.
“I will pay my salespeople recurring commissions,” he says. “As long as clients remain customers, we will pay out commissions to salespeople each and every month on those same accounts.”
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