If you’re an upstart and on a tight budget you’re likely considering “commission only” as a route to build your sales team. Having interviewed thousands of commission only sales people we compiled our TOP 6 list of what commission reps seem to hate for you to keep in mind should the occasion arise.
#6 – Perceived lack of ethics
The 6th most reported reason sales people leave commission jobs relates to their former employer’s ethics or that of their immediately manager. Seldom do applicants provide specific examples of this, and in many cases it seems to come down to a feeling or perception of unethical conduct. The recommended solution is plenty of transparency and communication leaving less chance for the sales rep to think the worst.
#5 – Investment required
While some don’t mind the large majority of commission only reps will sneer at the notion of having to purchase something from the company even if the company is 100% justified its requirement for whatever reason.
#4 – Charge backs
Charge backs are the fourth most often stated reason for leaving. A charge back usually occurs when a sales person is paid in advance for a contract which later is terminated by the customer before all fees are paid. For example a customer agrees to pay a monthly fee over the course of one year. Rather than pay the sales person each month the company pays the commission upfront for the entire year. However if/when the customer breaks the contract or is unable to pay the company has now paid out commissions for which no money is collected, resulting in the need to “charge back” those commissions. Some companies choose to eat the costs while others need to charge back. Still another option is to only pay out when the money is collected, virtually eliminating the possibility of charge backs.
#3 – Communication delays
Delays in communication seem to quickly cast doubt in the minds of sales people regarding the company’s intentions. Many (frankly most) commission sales people feel as though they’ve been burned at one point or another. Communication delays are usually the first sign trouble which unfortunately usually leads to pay delays.
#2 – Customer service issues
The sales rep closes a sale and hands it off to the company. Now the customer is emailing and calling the sales rep complaining about poor customer support. The sale rep loses momentum dealing with customer service matters and begins to fear that further sales will be lost. Being the second most commonly cited reason for quitting our recommendation is to assign a specific customer rep to each sales person. This will help the sales person diagnose a bottle-neck and better deal with customer support issues if they come up.
#1 – Commission delays
The big daddy of things commission reps hate is surely this. Sales reps are extremely sensitive to commission delays. As is the case with #3 delays usually leads to further delays leading to no pay resulting in a scorned sales person who is once bitten twice shy. In our estimation the day their pay is delayed that sales rep isn’t working, instead they’re waiting to get paid. And the longer the delay the more likely they’re beginning their new job search.
Ensure timely and frequent pay cycles, make it a priority or lose sales people.