Sales Commissions: Retarded Business Owners' Shortsighted Solution to Increasing Their Sales...

by Tom "Bald Dog" Varjan

...While Destroying Profits, Morale, Teamwork, and Boosting Both Staff and Client Attrition

This is a rather unpleasant page to read for many business owners and sales managers who are trapped in the harebrained and self-destructive concept of compensating their salespeople based on commissions.

Here are a couple articles I have collected from several sources that outline the main problem with sales commission, which, sadly, most business owners are not even aware of. And make sure you check back because I will add more to this. Honest sales folks have the right to be treated the same way as the rest of the company's employees, and belong to the same gang. Commissions alienate people and force them to work for themselves, which often means working against their employers.

In the retail world, to boost their commissions, this phenomenon is called The Cashier Con. Cashiers are trained to trick customers to buy additional products and services at a low price, but first they have to go through all the hoops and loops of filling in and submitting nipple-piercingly complex rebate forms. And since many people give up on the rebate forms, the company keeps the so-called "rebateable" money.

This approach, no doubt, increases the cashiers' personal earnings, but at the same time it kicks the shop's reputation in the arse so badly that it can cost the shop hundreds or even thousands of pissed off customers who will never return.

The essential message is that...

...commission-based salespeople work for themselves not for your company. They look out for their personal success and realistically (and rightly) don't give a damn about your company. You and your company are just a means to enable them to achieve their own ends. And when they leave, rest assured they will take lots of clients with them. And you can't even say a word. Not even a sausage.

Why?

Because they put in the time and effort to acquire those clients, thus they belong to them, not to your company. You paid them once, and they gave you a one-off sale. But the goose that lays the golden egg, in this case the client, belongs to them and lays additional eggs for them not for you. So, just accept it.

So here is a collection of articles from some great thinkers explaining the counterproductive impact of the notorious commission structure.

The Sales Commission Dilemma: There's a Better Way to Reward Salespeople by Norm Brodsky

Condemning Commissions: Interview with human behaviour expert Alfie Kohn by Dan Jamieson

And remember! Don't sell harder. Market smarter. Both you, your employees, your clients and prospects will find it more enjoyable, profitable and attractive.

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