Question on Commissioned Sales People

Make them responsible for everything.

The most important thing is to provide training to him/her on the various things that you do in your business and the services that you offer.

Give them tips on the types of businesses to approach
Give them tips on how to get past gatekeepers
Give them a healthy commission percentage
Give them opportunities for bonuses
Give them promotional material - brochures, price lists, etc
Give them a loss leader to increase conversions - free consultation etc
Give them a direct line to YOU for any questions

You will generlly go through 8-10 sales people before you find one worth actually keeping - But, if they are getting commission only, and as long as they are representing your business appropriately, even if they don't make any sales, still gets your name out there

Also, try to force them to keep a "contact log" that they have to turn in weekly - name of company they visited, decision makers name, and reason that they couldn't write business that day...

Commissioned salesguys are pretty craven and for want of
a better word, lazy. Most are totally unskilled at lead
generation and are looking for a high profit product that
is "easy" to sell. Considering the tough economic times
perhaps you may find some who will be willing to actually
work a bit. The more weight you take off them and make
it McDonald's simple, the easier it will be for them to make
their first sales and then they'll be more motivated. Until
they see their first money from the job, their motivation
to do any work at all, much less go through your training
or apply themselves to learning marketing skills will be
feeble.

It's the nature of things. You've got to go through a lot
of guys before you find one or two who will even make
a 100 calls.

Hi Carla,

In my area (I'm in a large city) there are LOTS of web businesses selling online/IM services to offline businesses & they're on Craigslist advertising for commission-only salespeople. And many other types of businesses have started to advertise that way now too (many that always used to pay a salary). So many businesses are looking for these folks - cuz it's free to them.

You may want to advertise that it is a "part time" position & something they can do to "supplement" their current income. That way if it doesn't work out, they're no good or they feel they've wasted their time, they won't be too upset with you because they didn't rely on this job to pay their bills.

Cynthia

While Jeremy and Loren have both apparently had bad experiences with salespeople, I think it's a mistake to lump all salespeople into the two broad categories that have been offered in this thread.

Sure, you'll hire a few people that will ultimately waste your time, but I challenge anyone to name a single profession where everyone does the job expected of them. Just as there are superstars in all walks of life, there are also lousy doctors, lawyers, chefs, actors, you name it.

You have a great opportunity to build a team that will go the extra mile for you, but you're going to have to treat them with respect if you want your business to reach its potential. I've seen numerous bosses and sales managers try to lead by fear; that works out great if you only want fearful people to work for you. You don't want fearful. You want fearless.

Be extraordinary. It's easier than you think because the bar has been set so low by so many. Treat your people with respect. Part of that respect is letting them know upfront what you expect of them, giving them the proper tools to succeed, and then getting out of their way so that they can do their jobs while representing you and your company appropriately.

Hire experienced salespeople. Whenever there's a bad economy people who've never sold anything in their life (or even wanted to) get into sales, thinking it'll be an easy way to pay the bills until things turn around. Chris Lytle refers to these folks as accidental salespeople, and at this point in your business you may not have the time or energy to train an inexperienced person. There are good people looking for jobs right this very moment, especially in Houston.

Good luck,

Will

I would suggest finding the right person (reliable, entrepreneurial, etc.) and training them in the specifics of what you want done. In my experience, the personality and the chemistry is more important than the skills. Skills can be learned, personality is static!

As a career salesperson with over 30 years of business experience I can tell you that most of the statements made in the IM world by non-salespeople are insulting and quite frankly remarkably uniformed.

Professional salespeople are the most highly skilled, highly paid and most important component in business. The vast majority of CEO's, owners, and Sr. Executives are salespeople or have a sales background. The saying "nothing happens until a sale is made" is true and is a direct statement on the importance of salespeople in your business.

Salespeople (good ones, professional ones) are not lazy, craven or any other of the other pejoratives used in this thread. In-fact as a percentage of the population I would estimate that we are far better than non-sales employees. We understand that keeping the lights on depends on what we do everyday - that a paycheck isn't a gift or a given - that in business the customer rules, not unions, rules, or employees.

Bryan Kumare wrote an entire excellent WSO about this insanity of people thinking offline people are begging to give you their money - no sales skills needed. Know what's missing in the whole "offline" frenzy - the ability to sell. For every hundred IM people I interact with - from copywriters to coders to graphics artists - perhaps 1 even has significant people skills let alone the ability to persuade and sell. So perhaps greater reflection is needed on the very profession that keeps everyone's business alive (or the single biggest reason they fail).

Here is a reality check: no good salesperson I know makes under 6 figures. The best are salaried at that level with commission, bonus and benefits on top. I made $50k a year 25 years ago selling Fuller Brush door to door. So thinking you're actually going to find a good salesperson on the cheap waiting for your 'commission only' offer is hilarious.

In sales perhaps more than any other profession you get what you pay for.

Know why the hottest products are on lead generation and selling offline people? Cause you are clueless on how to do it! Know why you get titles like "sell without cold calling" and "list blast without human contact"? Because the one skill you can't duplicate, automate, computerize or outsource to the Philippines is eye ball to eye ball human relations and selling. And if you were being honest you would rather slit your wrists than spend 2 hours with me cold calling or pounding the pavement. I've seen adults sweat, tremble, and break down on just the thought of cold calling.

You cannot desperately want to outsource selling while at the same time fundamentally disrespecting it!

Like copywriters here I could put my finger in the air and get 100 offers of work for free 'performance' based deals - and do this day in and day out. Every broke, cheap or greedy business owner wants me to sell their goods on the come - and then fight me for commissions afterward. Read Robert Ringer's book on the subject. Crazy. Good salespeople with a track record, resume and the chops to sell big aren't looking for your offer.

I could go on forever. I have made people tens of thousands of dollars in an hour simply by teaching them the basics of influence and human interaction. I have saved more businesses from bankruptcy than any SEO expert or web designer that I know of. Salesmanship - whether in print or in person - is the single factor between failure and success. The best product doesn't win - the best salesperson does. And if you think they're out there cup in hand "will work for food" is like saying pro athletes are replaceable by high school varsity squads. Good luck with that.

Ask salespeople what would work for them and what they need in order to help you out. CMA - believe me much of the advice you're getting is downright silly if not destructive. Seems like a lot of non-salespeople are willing to speak for us. Perhaps I'll write a WSO on the subject

PS: rereading this thread was painful. Let me get this straight - you're expecting me to not only to work for free, pay my own expenses and get paid only and if you do, but now I have to keep an activity log, keep all my data in your CRM and justify why I didn't get an order that day? Too funny. Those kind of ideas come from people who think they know how things "should work" but clearly have never done them. Hey - do you work for the government?

J - I agree 100%. The key words are lucrative and opportunity, ideas noticeably absent in the previous posts (or at least understated and under-appreciated).

Insurance agents, real-estate agents, stockbrokers, Manufacture's Reps all work on a commissioned basis. Your point actually emphasizes the point: Rainmakers expect higher upsides; commissioned salespeople expect better overall rewards than those of us who sacrifice some upside for security and benefits.

For example - an IM deal would have to give me a %50 upfront split (based on rates of $500 to $2000 initial fee) and then a minimum of %25 residual split. I've had IM guys almost choke on their lunch when negotiating those fees.

Look at Real Estate. A house sale generates 6% split 50/50 with the broker. The broker absorbs all costs except for gas for the most part. So the agent on average makes $3k. Is your IM commission deal sweater than that?

Also much of the advice here is a direct violation of US law. An independent contractor must have 1)multiple sources of income 2)spend their time with multiple clients and 3)not be directly under your control, supervision, or subject to your management. Violoate those terms and you will be subject to payroll tax and other employer liabilities/responsibilities.

I would not sign a non-compete unless it was extremely narrow. I would not give you my records, in-fact if you did me dirty I would move to another vendor with the same book of business. You are replaceable (just a flip through the yellow pages) - I am not. Successful companies keep and appreciate their sales talent.

Please - I'm not posting to be argumentative or arrogant. I'm simply trying to inject some reality into the situation. J is absolutely right - with the right offer, the right support and with the diligence needed in every business activity you will find a good salesperson. However you won't get this done by making draconian demands, weak offers, or having an poor attitude about them as professionals.

Russ,

As I mentioned in a previous post, I sold real estate for 10 years which is straight commission. I haven't had a job that I was "on the clock" and paid wages since I was 21. Since then I've been paid solely for doing, not just for showing up and being there.

When we were relocated with my husband's job and were fairly certain that we would get transferred before too long, I decided it was time to make a change and do something other than real estate, because as joshril said, it takes time to get established and get sales going.

So I started my own business and built it up in an area where I was new and had no contacts. This site that I am selling ads on started from an idea, I built the site, the content and the traffic and I've been tweaking the ad packages that I offer for several years. I look at what businesses need and I structure it around that.

I'm not sure why you are so offended by this thread. I'm not asking someone to do something that I wouldn't and haven't done myself. That CRM platform that has a bee in your bonnet, it saves me TONS of time following up with potential advertisers. That is what I use, why wouldn't I have someone that is working for me use it? Would you expect me to make them come up with their own tracking system?

Some people can create something out of nothing and figure everything out for themselves, but other people need a structure to operate in. Look at WSO's. Ninety percent of them aren't new information, they are systems that people have developed that are successful . . . a structure that others can follow.

I am really good at creating that structure.

I developed a sponsorship and advertising structure for a nonprofit organization that I volunteered for and laid out exactly how to get the advertisers when I handed it over to my successor. All they had to do was EXECUTE. The person that handled the ads after me was able to sell all the spots in two hours using the list I had developed and the materials I left.

I created amazing sponsorship packages for a fundraising event that I help organize. Businesses would call for a standard exhibitor spaces and I was able to upsell many of them to sponsorships because I could spell it out for them why they would benefit more from the expanded exposure.

The reason for my post was not to disparage sales people. I've done sales and I do sales. The reason for my post was to get input on the best way to structure it. I sell my own ads, but I haven't sold ads on anyone else's commission schedule and I was wondering what the standard was.

Hmm . . . so does the base commission reset each month and they have to keep making that quota to get the higher rate? I guess I'll have to research a little more.
This is what I'm hoping. I actually don't think a 30 year sales veteran would work well for this. I'd like to find someone who has some "snap," as my husband would say, is teachable, and who is looking for an opportunity.

(BTW joshril, I'm originally from your neck of the woods.)

Actually, that isn't right. The commission is split 50/50 between the listing and selling offices. It is then split again between the broker and the agent, which can vary depending on the agent's sales volume and agreement with the broker.

Brokers do NOT absorb all the costs . . . believe me. Realtors are like mini businesses within their offices. If you're in a good office, they may provide you with some marketing materials and signs. The office may offer some sort of advertising coop where you don't have to pay as much. They may give you free copies, but a lot of offices charge you for every copy you make.

My friend is with a "100%" office where she pays a desk fee and used to keep all of the net commission after paying the E&O insurance and a transaction fee. Since the real estate market is in the toilet, the office is now taking a percentage of the commission on top of the rest.

She's paying $1,200 a month desk fee for an office that is probably not any bigger than 100 square feet. She pays for her MLS, showing service, signs (which people are always stealing), cards, flyers, phone, car, gas, every copy she makes, and any graphic design or administrative help from the secretary. Then she pays E&O, a transaction fee, and a percentage of every commission she makes. She probably has $3,000 a month in fixed costs before she even walks out the door.

CMA - I didn't say you were negative towards salespeople, I simply mentioned that others were. I'll bow out now since the point has been made and the rest is arguing over nuance. For example I assumed the selling agent was also the listing agent.

I was trying to help by correcting some bad information - like the assertions that you can control an independent rep.

It's interesting how quickly people are to pick up offense and then blithely pass over the larger issues raised. Again, I didn't mention anyone by name but terms like lazy and craven where mentioned - and multiple times. At least the IRS point and legal aspect was accepted.

If I was too strident and over stated the case I apologize. I simply have read too much in the 'offline' gold niche that is pure nonsense and find IM people to be both negative and unrealistic in their attitudes towards salespeople. Much smarter people have made this observation, such as Byran Kumar.

Aside from that it looks like we agree on far more than we disagree: offers and reimbursement must be good; the overbearing controls suggested by some have IRS and legal consequences; salespeople are professionals worthy of respect.

Good luck in your efforts.

Russ

Yes but being a good sales person face to face is an exceptional skill. It has nothing to do with technology. In fact they are opposites. A people person, socialites are unlikely to want to spend 12 hours a day learning about SEO, list building, links etc...

I couldn't agree more Russ. I know some exceptional sales people and to say some of the above remarks is a little naive. Top sales people are making a lot of money...

It's an exceptional skill to have.

P

My bet is (maybe it's a little harsh) but a lot of people hiding behind their screens sellnig are doing so beause they can't or do not have the confidence to give face to face selling a go. Not all but a good %.