Why hiring a commission only sales rep could be an expensive recruitment mistake

[David White]

Hiring a commission only sales rep seems to be the number one idea in the mind of every startup or new business owner looking to increase sales and grow on a budget. It is easy to understand why. With the zero up-front investment and no sell, no fee business terms it seems like a no brainer, but does it really come at no cost?

I’ve been working with quite a few start-ups and sme’s over the past 10+ years and spend a lot of time speaking to and reading about others. The funny thing is, that although the topic of hiring commission only sales reps comes up so often, I can honestly say that I have never heard any success stories from it.

If you put the challenge of hiring sales people into perspective then any recruiter, small business owner or sales manager will agree that finding the right candidates is always a bit hit and miss. This is for a number of reasons, but mainly because of the lack of available sales talent that is around, especially here in Europe.

When companies take the decision to hire a commission only sales rep, they are not only running the risk of failure, but also run the risk of losing good potential sales as well as damaging their reputation too.

If you look at some of the key skills of any top sales professional then you will quickly see that they will be very difficult to find in a commission only sales rep. They don’t fit into the company culture, they don’t believe in or even care about the product, and they don’t really care too much about customer satisfaction either. In short, they are new business commission junkies.

So before you consider if you want to allow an unknown commission only sales person to sell your products or services you should consider how expensive they could actually be in the long run. It is very likely that if you are desperate enough to be looking for them then you are probably not too clued up on how to spot a good sales person. This means you might even be letting some sales rookie loose on your potential clients who knows very little about how to sell, but is good at convincing people that they are (which is not selling by the way).

Should you consider hiring a commission only sales rep?
Commission only sales reps are very often attracted by selling high value products and services. This is naturally because they need to make less sales in order to make a decent commission. The problem is that the higher the value of your product or service, the higher the cost of failure is when sales are lost.

If you are running a startup or small business and have an easy to sell, low value product or service then hiring commission only sales people might just work out for you. The challenge is that most of them stay far away from such opportunities due to the number of sales needed in order for them to make any money.

All in all, I would say that your time and money would be much better invested in a passionate sales intern who will grow with your company and can be developed into a trained professional over time. They have hunger, they are low-risk and if you invest in their sales development then you will generate the kind of employee loyalty that no commission only sales junkie will ever give you.

 

[businessfunding]

I can give you success stories.

In fact my commission-only sales force always outperformed those on salaries - and the salaried ones always asked to go commission-only once they had found their feet

It isn't easy, but it can be highly effective.

 

[telemax]

The problem is that the majority of Companies recruiting comms only salespeople either have no money to employ anyone because their product or service is unsaleable.

 

[XLIN.Ltd]

I think offering Salary plus performance based commission should be a good option, with a quarterly or half-yearly reviews.

This may allow the start-up businesses to arrive at an equilibrium which keeps the sales people interested in the employment.

 

[beasty]

One of the posters on here 6 months ago said he had 1000s of good cvs for commission only sales people maybe he will post

I am pretty much switched off to the possibility of finding people of quality

1. In my view most sales people actually suck
2. The genuinely good people sales people generally get called entrepreneurs

I would be much more likely to do something with someone who set up as a business with a view to expanding, sure it might be 1 guy but he is more likely to be the type of guy you want and if you are paying into HIS business then you are not going to be left high and dry later.

I do not believe the commission only sales guy has anything like the 1000s he claims, I think he may have had some, but in 6 months people move on.

Anyone who is going to set up as a sales agency, I want to know, anyone that is claiming to be commission only sales.. not really now....

I could do with someone, but they better blow my mind with their abilities for me to listen

 

[Billmccallum]

Personally, I don't think there is such a thing as a good salesman (person), you cant sell a £50,000 boat to someone who cant pay for it, or a £5 cup of coffee, unless the customer is a fool.

We (as we are all salesmen/women) facilitate the sale of goods or services to our customers, except for the people who are less than ethical in their business dealings (conning people into sales/contracts they don't want or can't afford).

A good representative will research the market, identify potential clients and present an offer to them, working on communication and building relationships for the long term rather than a sales pitch.

Just one opinion.

 

[beasty]

Disagree

People in general operate on automatic pilot, like this, need this, not sure, get later etc

Hit with marketing messages over time moulds people to what they should or should not buy (Lets not go into the messages do not affect me nonsense) they do, positive or negative a bad coke advert makes you more likely to buy pepsi.. anyway

PEOPLE can have features and benefits explained to them by other people, connect with those people and agree that YES actually having now woken up and considered this properly it is more a priority than x, y and z

Good sales people sell anything and they are few and far between

That 50k boat is within reach on finance no doubt, what colour works best for you? White is traditional and Black is modern, which category are you?

 

[businessfunding]

Personally, I don't think there is such a thing as a good salesman (person), you cant sell a £50,000 boat to someone who cant pay for it, or a £5 cup of coffee, unless the customer is a fool.
.

We all have value points & priorities

In ethical selling, the good salesman is one who can elevate a product in your priority list and put price low down the shopping agenda

No, you can't sell a £2.50 cup of coffee for £5, but you can probably make it worth £3 by adding personality and a little biscuit..

 

[Billmccallum]

Just one opinion.

Don't want to get into a debate with anyone, we will all have our own opinions, which we will all think are right.

 

[Leather Briefcase Company]

In the leathergoods business, most importers and wholesalers have agents. These guys know the shops and who pays and who's a risk. They often advise the importer about fashion trends and new designs that the retailers want.
So a good agent can really make all the difference to a start-up, and you can find it very difficult to find one with all the right connections. He will be judging you and your products, not the other way round!

 

[Ryan000001]

I have worked with a huge number of highly successful self employed sales agents over the past few years and it is all too often that companies who can't find good self employed sales agents write negatively based upon their experience of failing to find the right candidates.

Granted it can be frustrating and expensive to invest time in an inexperienced sales rep that has never been self employed, can't support themselves while building their pipeline, can't motivate themselves to work from home unsupervised or has no existing database of contacts under their belt.

However, a successful self employed sales person usually comes from a long background in sales, has a database of industry contacts they can utilise effectively, and ultimately chooses to work on a self employed basis in the same way that any business owner chooses to become their own boss.

 

[Ryan000001]

David,

I'm just curious... you own your own sales training business, you are self employed and have to sell your training courses to your clients. Does that not make you a self employed sales person in your own right?

 

[Daxo]

Might only be me but it just seems like the OP's post was one long sales pitch.

 

[businessfunding]

The problem is that the majority of Companies recruiting comms only salespeople either have no money to employ anyone because their product or service is unsaleable.

In my case it allows me to build a sales team more quickly than I could otherwise afford

The key point is that you are building a business partnership, not getting free labour

 

[Ryan000001]

The key point is that you are building a business partnership, not getting free labour

Absolutely spot on!