Tweak Your Biz » Sales » Thinking of Creating a Commission Only Sales Team? What You Need to Know

Thinking of Creating a Commission Only Sales Team? What You Need to Know



We have our business up and running, we are covering our costs, we may be making a profit and now we want to grow that profit. The initial thought is to get a ‘buddy’ to help out and do some ‘commission only’ sales. I know that because I used to be that buddy… “Ah, Tor will ya do a bit of sales for me?” If I had a euro for every time I heard that, well I’d be rather rich now ;) This is asked because it’s a ‘no risk’ option to the business. It allows them to get their name out there and hopefully some sales along the way. So as small businesses (and larger ones) how can we own this “Commission Only” model?

Define Your Customers and Then Your Agents

You may have done this already, but you may be a product that has multiple customer types, so what’s the best way to sell to your customers? Customer behavior will answer this. I buy ice-cream at an Ice-Cream Parlour, concert tickets online, clothes in a department store. But my friend may shop differently.

  • Understand your customer’s relationship with your product
  • Understand your customer’s relationship with how they purchase your product
  • They understand your product and how they purchased it and they have become a repeat customer
  • They are satisfied, because they have repeat purchased, they are now an advocate.

This can now give you an idea of the type of sales agent you need. How your customers have purchased in the past, is how they will purchase moving forward; telephone sales agent, door to door, stand in a showroom, a shop front and so on. From here you can define the best type of sales agent.

There is absolutely no point in a department store phone calling me to see if I’d like to buy a dress with a pink daisy pattern on it as I want to touch it, see it, try it on before I buy it. But as a business owner, if another business rang me to see would I be interested in an offer in printer ink, I would probably think about, or at least take their details for when I do.

Related: If We’re Not Selling When Making Cold Calls, Why Are We Making Them.

The Details That Can be Neglected

Decide on your strategy, targets and commission structure – This defines what they [sales agent] have to do and how you will remunerate. Make sure what you are offering [product & offers] are concise and understandable to the customer. Make sure your agents understand these. Your commission and bonuses need to be clear and fair [only you can decide these] your agents need to understand this, otherwise they will feel duped and used, not good for morale.

Source your team – I know of a company who email their database and let them know of available work. This works for them because their mailing list is full of advocates. Happy users of their product & service, they always get a good response. Avon promote their business opportunities on their brochures and get their agents to talk of the ‘Avon Opportunity’ to their customer base, ensuring thousands of women [and men] world wide, contact them to become agents on a weekly basis.

When advertising for agents be clear in the details:- duties of the job, expectations, commission and bonus offerings – We must pick our sales team carefully, they are our face to the public, they are our advocates. Avon Cosmetics have used this idea to their advantage, their products go directly to the customers at their homes, and 9 times out of 10 their sales agents are housewives or stay at home mums. Their products are priced well and their agents are fantastic advocates as they used the products and believe in their value.

Avon also train and up-skill their managers and agents at every opportunity. The commission structures allow their agents to make a reasonable wage for the time and effort they put in. And bonuses of holidays and designer jewellery are always a treat.

Related: How To Inject New Life Into Your Sales

Training is an Investment

Your team need support; they need tools to sell, be it introductory packs, demonstration samples, a demonstration of the product service in action. These are all things your prospective clients will want to see from your sales agents. It looks professional for them to be able to show and demonstrate what they are selling. They will be excited to show how your product will make their lives better.

  • Train your agents in your product, make them purchase it in the way they are expecting clients to purchase
  • When they know the process the client will go through they can best explain it (you would be amazed at the number of agents who don’t have this training). My husband used to work for Nissan, so he drove a Nissan Company Car. I can see it now, turning up to a Corporate Client to sell a Nissan package in a Range Rover!!!!
  • Train your agent in Best Practices. At this point you may want to hire a Sales Trainer
  • Good rounded Sales Training will help them build the best future for your company. This needs to be initial training when they start and developmental as they progress with you as a company.
  • Reward them for giving their time for training, a lunch goes a long way! Make your team feel special
  • If you are setting targets, follow up on them. Find out why targets are not being met, work together to fix this.
  • If those targets are being surpassed get the agent to share their story, its great to hear how success is being achieved
  • Plan a Gala event for them, take them out for dinner. Again we love to feel appreciated. This also ingrains a feeling of longevity, this is a company that we can stay with. A yearly gala gives an impression of commitment from the company and the agents. This can erase the association of high turnover in sales agents positions.

My 8 Point Checklist

  1. Define and Categorize Customers
  2. Define the Type of Sales Agent(s)
  3. Strategy
  4. Targets
  5. Commission & Bonus Structure
  6. Source Your Team
  7. Train Your Team
  8. Reward Your Team

Follow these 8 points and you can have a successful commission only sales team who enjoy working for you and will help you grow that profitable future you are looking for. If you already have agents in place and are looking at this retrospectively, explain to your existing agents that you are implementing changes that will make their lives easier and more fruitful.

If you are an agent or employ agents I would love to hear your stories or advice ;)

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Image: “Closeup portrait of a successful business team laughing together/Shutterstock



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The Author:

The Training and Up-Skilling of your team, whether it is just you a Sole-Trader or you and a team of 200 is vital in the development of your Business. I have worked for over 15 years in Traditional Sales & Direct Sales spheres; I advanced from being a Direct Sales Agent to becoming a Business Development Manager involved in the Recruitment and Training of other Direct Sales Agents. I have developed Sales Training Programs that are effective and fun, bringing Sales Teams together up and down the country. Because I have worked in a Sales and Customer Service capacity for over 15 years, in both the retail and direct sales environments, I have learned vital techniques that can establish Customer & Sales Agent behaviors. This has allowed me a great understanding of Sales Processes. I have gained valuable experience in all aspects of Sales, Sales Training and Customer Service: Sales Pipeline Establishment and Development, Objection Handling, Closing Sales, Business Development, Networking, Customer Service, Complaint Handling, Complaint Resolution, Training and Education of Sales Agents. http://www.inspiringsales.ie

Add Your Comment

  • http://www.sianphillips.ie/ Sian Phillips

    Great post Tori. For me a sales team always needs to be on commission to give them the drive to sell. A nice bonus and treated well to show appreciation goes a long way too. Thanks for explaining the way it needs to be structured

  • Torihawthorne

    Thanks Sian,I think Salaried Sales Staff have a place, but when Businesses are in their first few years, salaries for sales staff just aren’t there. Sometimes they comm only agents are left to fend for themselves and that’s where the bad reputation for comm only has come from. Sales is an investment to any business and needs to be treated the same way we would treat our printer or web developer; given all the information necessary to do their job and close communication all the way.
    Thanks so much for your comment Sian
    ;)

  • http://smartbusinessguides.net/ Pawel Grabowski

    Sian, I agree, commission system works, although it needs to be properly implemented into the company’s structure. 

    I have seen many sales teams on salary doing only the base minimum to keep their jobs…. At the same time, I have also seen companies with commission structure organized so badly that the rotation of the staff was practically ridiculous. 

    I guess the middle ground will be different for every company, but the key is to actually find it and implement it.

    Oh and you’re right, showing appreciation is a must too :) 

  • Torihawthorne

    So True Pawel,Thanks for your comment,
    But, I also know salaried Sales Teams who have worked exceptionally hard to ensure they keep their jobs and receive no bonus, no commission and not even a yearly pay rise.. It comes back to ensuring we have the right sales people for the right sales job.I really truly believe the middle ground is ensuring we train our sales teams from the start. We have to train them in effective sales and customer service techniques.

    Business in general can be nervous of sales people, and with the snaky slimy portrayal of sales people on TV etc I can see why. But with the right direction, training and appreciation our sales teams can be the best investment to any business.

    Thanks again Pawel
     

  • http://www.smartsolutions.ie/blog/ Elaine Rogers

    Your 8 step plan is ingenious in its simplicity – it’s getting the balance right as you say in your article. I think as business gets more social, the snake oil will slime away to the hole where it belongs, and transparency, respect and honesty will shine through.
    Yesterday I heard a comment that it doesn’t matter what sales people “think” of the product they are selling – this goes against my gut judgement – I personally feel more inclined to buy from someone who is genuinely passionate about the product or service they are selling, and not just a good liar. I feel this works the other way around too and I should feel my agents are excited about my products/services. 

    I love this post Tori! And I love the idea of advertising to those who are already advocates :)

  • Torihawthorne

    Thanks so much for your comment Elaine,

    I truly agree with you.It really does matter what your sales team think, and its really ok for them to be honest too. A long time ago I knew a product I was selling (1 in a range) wasn’t the best, so when asked, I was honest, but tactful to my employer and tactful to the customer. She appreciated my honesty, spent a fortune and promptly recommended me to her friends as I was trustworthy in her eyes. We must give our sales teams, the tools and confidence to build honest relationships.. They have strength and longevity in comparison to snake oil slime techniques (or lack there-of) ;)Thanks again Elaine

  • Daryl

     45 years selling, managing sales US and North America, muscle building teams, writing comp plans, building 5 companies from year zero(two public), and a multitude of accolades for ‘making it happen’……I have never seen such oversimplified touchy-feely commenting passed off as business advice.  The only part of your article that makes sense is the knowing that a well constructed compensation plan drives business.  Note that any seasoned salesman will see a 100% commission pay plan as a disguise of outsourced labor.   It means you as an individual are financing the sales side of the business 100% for your semi-employer.  Furthermore, straight 100% plans cause the smarter ones to focus on hunting elephants and ignore smaller (perhaps faster, more profitable sales).  Then they quit.  The cost of turnover for sales is easily 3X annual $$ target income for poor salesmen and 5-7X for good ones.  Hire right and pay them to stay.  Hire wrong and make your competition stronger.

    Straight commission doesn’t work in long sales cycles.  Straight commission won’t work in  true consultative or enterprise type business models.  Straight commission tends to ignore margin control.  For perspective; the more times you say “if” and “when” in discussing my pay…the less I sense I really make….you come off as if you want to control my income instead of the other way around.  If you have a consumer product, what is clearly a fast turnaround sale, your ‘one call close’, you may get a few good people to work for you…but not for long.

    Daryl Lucien
    http://www.linkedin.com/pub/daryl-lucien/3/25a/150

  • Torihawthorne

    Hi there Daryl,
     
    Thanks so much for commenting. It’s an interesting insight, thank you. I would not suggest it as a long term or permanent option for a company’s sales team (unless the business suited that model as some can). And I am not advocating that any commission only sales agent should finance the activities they undertake. I was looking at the planning, training & support aspects.

    I will take on board your points, its great to see sales from another persons perspective. Thanks again, much appreciated.

    Tori

  • anumalik81

     Yes, Sian. If you want to increase sales activity, you need to have experts sales team. They must be smarts and industrious. Also you should treated well with a better bonus.

  • http://www.seo-writer.com SEO writer

    This was a great article with truly useful points. However , the title should read “Already

    Have a Commission Only Sales Team? What You Need to Know.”

    I have been looking on and off for a commission-only salesperson, and I just can’t find one. The commissions would be big, but nobody seems to want to work on a commission-only basis.

  • THE NEW MAINSTREAM

    Any ideas about where to find this type of salesperson?

  • Ali Nshakirahe Mfitundinda

    Some companies face challenges dealing with commission agents whereby they end up fighting for one client.so i thing for the company that are just growing Bonuses and good salaries can do better in order the company to grow first.Because when most of staffs get to know that sales team is getting too much commission all the departments will love to fight for selling and at the end of the day the whole company will be in mess.

    Best regards
    Ali