Wednesday, April 20, 2011

Commission Sales Debate

The bosses of this new business met with us to discuss an arrangement to earn commission on sales. I was very excited that this was going to be offered, since I’m not comfortable with outside sales, I was glad to have a reward and incentive for extending myself in this capacity. Afterall, it is a small business, so we all need to be involved in sales.

But the structure of the arrangement was very disappointing. Handing someone a business card does not constitute earning a commissionable sale. Any leads resulting from the signage on my personal vehicle do not constitute commissionable sales. Since my job description requires me to promote our products online, those sales are uncommissionable. Prospecting must be done on our own time and any orders that we collect while on the customer site will be paid out at 10% commission. They will not pay commission on any sale under $100.00. If they assign us to prospect during a business networking event, we may collect our regular wages, plus 2% commission on a qualified sale. Also, each of us would be responsible for tracking our own commissionable sales, by documenting and justifying how we earned each sale.

The root problem is, they want to create an incentive without actually having to pay out commission. Who is going to walk into a place of business and stay until they complete a sale? Prospecting is more casual than that. If I do any prospecting, I’m going to simply hand the customer a business card, tell them a sentence or two about what we do, and suggest that they contact us when our services are needed. According to these rules, any resulting sale would not be commissionable.

Sadly, the entire policy was created after this incident: I over-heard the bosses lamenting that they would not be able to attend the Home & Garden Show due to another obligation. I assumed that it was a business networking opportunity, and decided to take the inititative (they are always preaching about how they encourage their employees to take the initiative), sacrifice my weekend to attend and network. I passed out 50 business cards to prime members of our target market, and returned with several solid leads. When I asked how to record my time, I was told that I would not be paid for the time spent prospecting, since the owners had not requested that I do so. They were thrilled that I took the initiative and was so successful, and they hoped that I might earn enough in commission off of the sales to compensate for the time spent. The problem with that is I can’t use work time to work the leads or my commission rate will drop from 10% to 2% and I have no free time to spend outside of work for this. Not much of an incentive, huh?

After the new commission policies were explained, the other employee remarked that she would be happy to have 2% of a sale now and then and would view it merely as a little bonus. I pointed out to her that their objective of offering commission was to incite us to do more than we usually would do, to generate real, substantial sales--which view neither of us had adopted. And even if I could somehow achieve a “qualified sale,” I certainly have no intention of having to argue why I should be paid out commission on each sale.

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