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If you didn't pay commissions sales people would start coasting once they made their numbers. Imagine you have to make a million on sales per quarter, and thre
by gozur88 9y ago
If you didn't pay commissions sales people would start coasting once they made their numbers. Imagine you have to make a million on sales per quarter, and three weeks in you strike gold in the form of a $1.1m contract.
Sure, you get bonuses for exceeding your numbers, but you could spend the next two months slacking off, which would probably be worth the lost income.
Worse, from the company's perspective, you might try to make sure your new prospects don't close until next quarter, just as a little bit of insurance in case it turns out to be leaner than this one. You're already drinking the coffee - what's the rush?
Sales is a tough job. It's a lot of travel, a lot of rejection, and a lot of stress. If I had to do sales you can be damn sure I would expect a lot of compensation.
- caf 9y agoWorse, from the company's perspective, you might try to make sure your new prospects don't close until next quarter, just as a little bit of insurance in case it turns out to be leaner than this one. This has a name in sales - "sandbagging".
- tptacek 9y agoThe theory of not paying commissions is that salespeople will be incentivized the same way other employees are. You don't code on commission and tend not to coast once a revenue number is hit.
- gozur88 9y agoI've met quite a few software developers who pad their estimates heavily and then coast when the job is complete.
- arximboldi 9y agoWhich is great for everyone. The company gets predictable estimates, the developer gets a stress-free life. A shorter but unmet deadline is worse for everyone, specially the company, even if the product is still delivered sooner than the padded deadline.