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What is being discussed is all about incentives for sales people, to motivate them to do what's in the company's best interests. If it were in the company's bes
by jmduke 14y ago
What is being discussed is all about incentives for sales people, to motivate them to do what's in the company's best interests. If it were in the company's best interest to simply get a sale no matter what, regardless of how much damage that sale does to the company, then the standard commission based approach makes perfect sense. But what do you do about the deals where the salesperson does the normal "used car salesman / snake oil pitchman" act, scores the sell by promising a lot of shit that's not realistic, and then it ultimately costs the company more money than the sale price, to fulfil the deal?
This argument isn't against sales commissions, it's against bad salespeople. Obviously any sales approach that values get-rich-quick over providing long-term value for the company is going to be dangerous. Smart salespeople recognize that a relationship with the customer is the most important thing -- not despite commissions, but because of commissions. There's a sales cliche that goes along the lines of treating the customer like a cow to be milked instead of a cow to be slaughtered: if you're trying to optimize the lifetime value of a customer as a business, then that also means maximizing the possible commission from that customer, no?
(And, furthermore, the point I'm raising is -- are those smart/good salespeople going to be disinclined to work at a company without commission? I really don't know.)
- mindcrime 14y agoThis argument isn't against sales commissions, it's against bad salespeople. OK, I can buy that, but I think it's creating more of a binary situation than exists in reality. Surely the "goodness" or "badness" of salespeople, in this regard, is on a continuum? If so, wouldn't choosing the best incentive structure be most important to the ones who aren't solidly at one end or the other?
- jmduke 14y agoOh, definitely. It's just hard to mentally conjure a spectrum of fitness for the company without having more specifics. I guess in my mind, what the author is doing is creating a structure that minimizes damage done to the company by bad salespeople: and I wonder if an unintended consequence of that is limiting the abilities of great salespeople as well.