Common Mistake #275: Wanting Salespeople to Work for Free
Having trouble finding a salesperson to work for your company on a commission-only basis?
Its probably because you’re just being a cheapskate, and no one should be working for your company on commission-only.
Yes, salespeople should get paid based on their performance, but performance-only pay only makes sense in a few cases.
Here are the evaluators with which to judge the type of commission plan you should use. You will score each one for your company from 1 to 5.
1. How proven is your product or company? If you have a new product or start-up company, it’s tough to recruit the right people and the right customers. Yes, people could get excited about you and jump on board, but someone with a wife, mortgage, and kids may not want to jump in bed with an unproven product and company that can’t offer them any security. If you or your business have been around for 3 or fewer years, give yourself a 1. The longer your lifespan, the higher your score (up to 5).
2. Who are you selling to and how do you get to them? A clearly defined and documented business development plan will answer the preceding question. When you have a plan completed, you will give a potential hire more confidence to work for you for free. No biz dev plan = 1. Clearly documented and proven biz dev plan = 5.
3. Do you know which specific activities lead to sales, and in what quantity? These are your KPIs (Key Performance Indicators). This is your recipe for sales success. If you know how many leads, phone calls, appointments, and proposals lead to sales, you’ll have a much easier time recruiting someone for nothing. One for ‘no’, 3 for ‘maybe’, and 5 for ‘oh yes’!
4. How long does it take for you to close a sale? This is called your sales cycle. If it is 6 months or longer, give yourself a 1. If it is 6 weeks or shorter, give yourself a 5. When someone sees they can start selling and turn revenue around quickly, their confidence rises in their ability to make money fast.
How did you score?
If you have a low score, you have a couple of things to do. You need to start doing some selling yourself, prove your product, create a business development plan, and define your KPIs. Or, you need to consider coughing up some cash in order to pay the right person who can stomach the risk and figure this stuff out for you.
Jamar Cobb-Dennard is a sales and marketing expert who helps companies without a sales force have a sales force. To receive your free trial of a software that will track your referral revenue, centralize social media updates, and automate email/text/postcard marketing, click here.