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Could adopting a straight-commission system be a good bet for your business?
March 1, 2004
URL: http://www.entrepreneur.com/article/69220

Are you struggling to feed the ever-voracious payroll monster each month while failing to achieve the sales results you need? You're not alone: According to Deloitte & Touche's "2003 Strategic Sales Compensation Survey," 54 percent of sales leaders aren't satisfied with sales force performance. And 52 percent of respondents think that when low performers aren't culled from the sales force, the lack of accomplishment acts as a "drag on aggregate productivity."

If you wish to bolster sales without adding much overhead, commission-only sales reps may be a good option. In the straight-commission model, your reps "eat what they kill," and you pay only for results. As with any compensation plan, it has both merits and snags. To gauge whether a strict pay-for-performance system will work for your sales shop, consider the following issues:

Joe Takash, president of Victory Consulting and a sales speaker and coach in Chicago, adds, "Make a commission structure generous enough, and thy door shall forever be knocked upon."

And since reps working on straight commission tend to be aggressive and self-confident, they "may view themselves as free agents and dislike too much company interference," warns Herman.

Cagnetta has had good luck keeping his reps because he places special emphasis on making Transworld a great place to work: "Our family and team spirit, coupled with growing opportunity, makes reps want to stay."


Kimberly L. Mccall (aka Marketing Angel) is president of McCall Media & Marketing Inc. (www.marketingangel.com) and author of Sell It, Baby! Marketing Angel's 37 Down-to-Earth & Practical How-To's on Marketing, Branding & Sales.