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August 17, 2004
Why pay sales reps commission?

Dave at B2Blog asks "Why pay sales reps commission?" To which, I submit the following reply. Some of this post won't make sense out of the context of his, so please have a gander at what he has to say as well...

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You can argue this a number of ways, but those in the 'sales compensation' circle will argue that persons in the traditional sales function are, by nature (or nurture?) driven in part by a variable financial elememnt to their work.

Whether or not it is 'bad' for a client to call a rep to ask questions is another matter, and one of role definition and how you've equipped your reps to effectively deal with the customer, and lastly, the customer - the element in the equation over which you have the least control. At the heart of your questions is the question "What is the purpose of the sales force?" To which, I pull an answer from Neil Rackham's "Rethinking the Sales Force" - Your sales force exists to "communicate the value of your offerings to the consumer." Vague, I know, but in essense, they have that direct contact with the customer to do just that.

Typically, sales reps are compensated with variable financial rewards for the value they bring, but that in and of itself is an inssue sustained over time, in large part, to sales' reluctance to engage in a value-driven process approach, leaving us to continuously question what sales is for, how to pay them, and how to quantify their efforts, while in contrast, we wouldn't dare think of challenging our manufacturing engineers and technicians with the same questions because we have relatively quantative answers for those questions.

Your issues, as I see them, are ones of process. Certainly, politics and history trump process if you let them, but if you clearly define and adhere to sales processes, like you adhere to manufacturing processes, you're on your way to answering many of the questions you posed.

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