a competitive selling environment, which is horowitz's conclusion in the article, is definitely part of reason to pay commission, but it's actually larger than

a competitive selling environment, which is horowitz's conclusion in the article, is definitely part of reason to pay commission, but it's actually larger than that. whether you have sales people or not, and whether you pay them commission or not is dependent on all parts of the marketing mix: your product's scope and complexity, its price, its visibility in the market, and how it's delivered. the more complex your product is, the more customization it requires, the more (higher-skilled) people the customer will need involved in deploying your product. that requires more convincing (i.e., sales). the higher the price, the more senior people are needed to be involved in the decision, requiring sales. the more complex your product, the less likely an ad will be effective, and the more likely that the purchase is a big deal. sales is the marketing channel of choice for highly complex, customizable and expensive products precisely because sales is very effective, yet expensive, so it only makes sense for products with high costs (typically at least 5-figures). you'd typically use less expensive account managers for 4-figure sales, and other marketing channels for less than that. and lastly, the percentage of compensation that you pay as commission is directly correlated with the riskiness of the sale. the harder the sale, the higher the commission as a percentage of comp. account managers, who typically do sales via email and phone, usually get most of their pay as salary. outside sales people typically get a large percentage of sales as commission.