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Here's a good article on why Fog Creek does not pay sales commissions: http://blog.fogcreek.com/why-do-we-pay-sales-commissions/ http://blog.fogcreek.com/why-d

Here's a good article on why Fog Creek does not pay sales commissions: http://blog.fogcreek.com/why-do-we-pay-sales-commissions/ http://blog.fogcreek.com/why-do-we-pay-sales-commissions/ We don't pay sales commissions at my company, and it works well for us. It does help the sales department to work more as a team.

mpdehaan2 11y ago
Love the idea of sales not working on comission, as it also ensures more directness with the customer, and looking after their interest and what products are best for them. I still remember some calls with a software company back in the day and I really liked how they told me when a product wasn't for me, and when I should use the competition. And it was good advice. It increased my loyality to that brand a lot and I shared that story a lot. Plus, you don't get things like the sales people making more than others for closing leads they didn't generate, which isn't a great feeling either. The whole team is responsible for the sale, and the sales guy may or may not have put more sweat into it. Enterprise sales folks making 2-3x what senior engineers make - especially - isn't right - and it happens a lot. Pay should be equal to work expenditure, at risk of sounding somewhat communist. (let's not even start on 8 figure CEO compensation).
kwindla 11y ago
I'd definitely be interested in knowing more about your company, davideous. I have no doubt that not paying commissions can work for some companies. And getting comfortable with paying commissions to salespeople took me, personally, a really long time. (Too long, from the perspective of being a good CEO and doing what needed to be done to move my company forward.) The arguments in the Fog Creek post sound right, and really resonate with those of us who are engineering/product people. But they don't match the reality of my own experience. At least for the high-cost, high-touch, long sales cycle stuff that I have the most experience with, the best salespeople all want their compensation to be heavily weighted towards commissions. So if you want to hire the best sales reps -- and, just as with engineers, you really, really want to hire the best -- you have to recognize and understand that preference. But I'd be happy to be wrong about this! In addition to Fog Creek, I remember reading another blog post about a startup that doesn't pay commissions. Maybe a Foundry Group company: Moz? I can't find that post now, though.
- porker 11y ago
  ThoughtWorks dropped paying commission: http://www.thoughtworks.com/news/zero-commissions http://www.thoughtworks.com/news/zero-commissions
- davideous 11y ago
  We sell enterprise email server software. It's high-touch and sometimes a long sales cycle. Lots of demos of the software via screen-share. Right now we have two people in sales. They are collaborating multiple times a day on Skype and help each other out on basically every sale. Much of your concern seems to be about the ability to hire the best people, given the preference for commissions. I've been fortunate here: I've been able to hire my sales reps through personal connections, based off of reliably knowing their prior performance -- and I know I have really good people. Perhaps it would have been harder to start the sales organization without commissions without these connections. But it's working for us right now.

mpdehaan2 11y ago

Love the idea of sales not working on comission, as it also ensures more directness with the customer, and looking after their interest and what products are best for them. I still remember some calls with a software company back in the day and I really liked how they told me when a product wasn't for me, and when I should use the competition. And it was good advice. It increased my loyality to that brand a lot and I shared that story a lot. Plus, you don't get things like the sales people making more than others for closing leads they didn't generate, which isn't a great feeling either. The whole team is responsible for the sale, and the sales guy may or may not have put more sweat into it. Enterprise sales folks making 2-3x what senior engineers make - especially - isn't right - and it happens a lot. Pay should be equal to work expenditure, at risk of sounding somewhat communist. (let's not even start on 8 figure CEO compensation).

kwindla 11y ago

I'd definitely be interested in knowing more about your company, davideous. I have no doubt that not paying commissions can work for some companies. And getting comfortable with paying commissions to salespeople took me, personally, a really long time. (Too long, from the perspective of being a good CEO and doing what needed to be done to move my company forward.) The arguments in the Fog Creek post sound right, and really resonate with those of us who are engineering/product people. But they don't match the reality of my own experience. At least for the high-cost, high-touch, long sales cycle stuff that I have the most experience with, the best salespeople all want their compensation to be heavily weighted towards commissions. So if you want to hire the best sales reps -- and, just as with engineers, you really, really want to hire the best -- you have to recognize and understand that preference. But I'd be happy to be wrong about this! In addition to Fog Creek, I remember reading another blog post about a startup that doesn't pay commissions. Maybe a Foundry Group company: Moz? I can't find that post now, though.

porker 11y ago
ThoughtWorks dropped paying commission: http://www.thoughtworks.com/news/zero-commissions http://www.thoughtworks.com/news/zero-commissions
davideous 11y ago
We sell enterprise email server software. It's high-touch and sometimes a long sales cycle. Lots of demos of the software via screen-share. Right now we have two people in sales. They are collaborating multiple times a day on Skype and help each other out on basically every sale. Much of your concern seems to be about the ability to hire the best people, given the preference for commissions. I've been fortunate here: I've been able to hire my sales reps through personal connections, based off of reliably knowing their prior performance -- and I know I have really good people. Perhaps it would have been harder to start the sales organization without commissions without these connections. But it's working for us right now.