3 ms·

I think it tends to push to the extremes. Either it provides an incentive structure that retains knowledgable salespeople and provides a huge customer benefit,

by dwaite 2y ago

I think it tends to push to the extremes. Either it provides an incentive structure that retains knowledgable salespeople and provides a huge customer benefit, or it winds up being toxic for both the employees and customers.

devilbunny 2y ago
Commissions work best when the customer and sales staff have long relationships and a decent knowledge of their markets. That's rarely the case at retail and pushes more hard-sell types. In B2B, it's about a relationship and trust. My FIL sells clothes. He's the middleman between the manufacturers and the stores. He has a territory and based on what's happening in other stores in the region he can steer them toward the right stuff for their store. I.e., what's this store's target age range, how affluent is the area, and so on. In return, when he does a good job with them, they will learn to trust his advice on what will generally sell well, and he ends up getting better commissions. He sells about a dozen lines from about six manufacturers, though about three or four of the lines tend to make up the bulk of his income. Since he's very good at his job, he can demand higher commissions than other salesmen just to take a line on. He's got the on-the-ground relationships, and a manufacturer will give him a bigger cut because he's not going to have canceled orders, returns, or headaches for them.
- 01HNNWZ0MV43FF 2y ago
  Iterated prisoner's dilemma vs regular Same reason people are mean on the Internet
- harimau777 2y ago
  As I understand it, that was one of the advantages of department stores. When you went to the jewelry section, for example, to buy your spouse an anniversary gift, the person working there was often the same person who recommended the jewelry you bought last anniversary.
  - devilbunny 2y ago
    In theory. Most staff at classic department stores didn't last quite that long. There's a local chocolate shop that has lots of turnover because they hire college girls to staff them most of the time. But the owner is on top of it, keeping good records, and about two weeks before Valentine's Day, they call me and say, Devilbunny, this is so-and-so from Chocolate Shop By You, you bought some chocolate-covered strawberries last year, would you like to order again this year? Yes, here's my credit card, and I'll pick them up after 3 pm on the 13th. Thank you, see you then. I walk up to the window, pick them up, bring them home, and say happy Valentine's. It's really the only thing she wants (I get her flowers but not roses - why be so cheesy when every other flower is like, half-price?) specifically. They make it easy to spend money with them instead of someone else. I don't have to wait more than a minute - they have a dedicated window for prepaid orders. That's service, and it's worth the small premium.
_DeadFred_ 2y ago
In the old world where people knew each other, knew this was a lifelong sales relationship, and we saw each other at the grocery store, church, it worked pretty well. In the modern world where we are as anonymous to each other in person as online it doesn't really. Back when I was a rich tech guy, the local Nordies would hold all the Ugg styles in my daughter's size and the next up for my daughter when the season started because the sales lady that worked with my daughter and wife had a relationship with them. It was an AMAZING shopping experience for my daughter. She was seen by the sales person. She felt special. And my daughter had some issues that made her feel less than special. But here was this beautiful sophisticated sales person not only seeing her, but helping her in areas she felt poor self worth in. And if you make my daughter feel special then I'm coming back to you year after year. But if I go in and am a random person to you, and you are to me, why pay Nordies prices?

by dwaite 2y ago

devilbunny 2y ago

Commissions work best when the customer and sales staff have long relationships and a decent knowledge of their markets. That's rarely the case at retail and pushes more hard-sell types. In B2B, it's about a relationship and trust. My FIL sells clothes. He's the middleman between the manufacturers and the stores. He has a territory and based on what's happening in other stores in the region he can steer them toward the right stuff for their store. I.e., what's this store's target age range, how affluent is the area, and so on. In return, when he does a good job with them, they will learn to trust his advice on what will generally sell well, and he ends up getting better commissions. He sells about a dozen lines from about six manufacturers, though about three or four of the lines tend to make up the bulk of his income. Since he's very good at his job, he can demand higher commissions than other salesmen just to take a line on. He's got the on-the-ground relationships, and a manufacturer will give him a bigger cut because he's not going to have canceled orders, returns, or headaches for them.

01HNNWZ0MV43FF 2y ago
Iterated prisoner's dilemma vs regular Same reason people are mean on the Internet
harimau777 2y ago
As I understand it, that was one of the advantages of department stores. When you went to the jewelry section, for example, to buy your spouse an anniversary gift, the person working there was often the same person who recommended the jewelry you bought last anniversary.
- devilbunny 2y ago
  In theory. Most staff at classic department stores didn't last quite that long. There's a local chocolate shop that has lots of turnover because they hire college girls to staff them most of the time. But the owner is on top of it, keeping good records, and about two weeks before Valentine's Day, they call me and say, Devilbunny, this is so-and-so from Chocolate Shop By You, you bought some chocolate-covered strawberries last year, would you like to order again this year? Yes, here's my credit card, and I'll pick them up after 3 pm on the 13th. Thank you, see you then. I walk up to the window, pick them up, bring them home, and say happy Valentine's. It's really the only thing she wants (I get her flowers but not roses - why be so cheesy when every other flower is like, half-price?) specifically. They make it easy to spend money with them instead of someone else. I don't have to wait more than a minute - they have a dedicated window for prepaid orders. That's service, and it's worth the small premium.

_DeadFred_ 2y ago

In the old world where people knew each other, knew this was a lifelong sales relationship, and we saw each other at the grocery store, church, it worked pretty well. In the modern world where we are as anonymous to each other in person as online it doesn't really. Back when I was a rich tech guy, the local Nordies would hold all the Ugg styles in my daughter's size and the next up for my daughter when the season started because the sales lady that worked with my daughter and wife had a relationship with them. It was an AMAZING shopping experience for my daughter. She was seen by the sales person. She felt special. And my daughter had some issues that made her feel less than special. But here was this beautiful sophisticated sales person not only seeing her, but helping her in areas she felt poor self worth in. And if you make my daughter feel special then I'm coming back to you year after year. But if I go in and am a random person to you, and you are to me, why pay Nordies prices?