How to Succeed with a Commission Only Sales Plan

Build a business or career through commission only sales or sales agent compensation plan.

In a flat market or when the economy shrinks, the interest in roles that pay only a percentage of order value rises. When salaried jobs are scarce, salespeople are more willing to consider opportunities that are paid on results. In a downturn, more employers would prefer pay higher rates for results rather than carry the risk of hiring people. Pay per sale is much more reliable than pay per click. There is no sense in fighting the tide when profit for both lies in meeting the immediate need.

Successful 'commission only' sales people make more money than those with a base salary. Companies who make such relationships work, have more flexibility, can be more agile, and are more resilient.

Individuals can make a success of 'pay by results' compensation and earn an extraordinary living. Vendors can enjoy the best of both worlds by building a loyal salesforce that is only paid when a sale is made. The following principles and practices work for employers as well as those who only pay for results; they work for employed sales staff as well as those who operate as a sales agent.

As the employer or the salesperson, the requirement is the same – certainty.

Those contemplating a sales agent role need certainty that it will generate sufficient income quickly enough to pay overheads and living costs. Companies who are contemplating an increased reliance on commission only sales need certainty that the those they recruit will generate the required results.

Forethought, planning, and preparation reduce the risk.

At least half of a salesperson’s success lies in choosing what to sell. First, it has to fulfil a need that is significant to the target customers. Secondly, the proposition – a combination of the offering and the terms of supply – must be differentiated and have a unique appeal to a subset of the target customer base. Thirdly, the salesperson must have reasonable access to the potential customers.

Perhaps most important of all, salespeople must be able to meet their minimum income requirements so it is essential to know the average conversion rate or to have evidence that the expected levels of success are realistic.

Most independent agents are not expected to spend on marketing however they may be expected to find their own sales prospects. If this is the case, the process by which they are to find prospects must not be left to chance or individual creativity. It must be defined and credible if a business is to attract the right candidates.

The target market, sector, or niche must be clearly identified and the ideal prospect clearly profiled. Those with talent and relevant experience may work this out for themselves however, such people are few. The employers must sell their proposition if they are to attract those with the right qualities. The discerning candidate who interviews the employer is much more likely to succeed.

Once it is clear which prospects are most likely to be interested in a proposition, the salesperson needs to have the names of key influencers in the target organisation that might be prepared to support the purchase. Once again, our mythical super salesman or women with the right experience would be connected enough and have sufficient skills to find the names for themselves. It is relatively easy to provide help and doing so will increase the attractiveness of an opportunity.

It may be enough to define a reliable method for discovering the right people. Apart from the obvious telephone enquiry, there are many online networking hubs that facilitate discovery. LinkedIn.com seems to be the most widely used in the high tech arena. For a sales agent relationship to succeed, both vendor and seller must work to eliminate or diminish any barriers that exist.

The seller need to provide answers to what I call the top six customer questions, in a succinct and convincing way. The six questions are those that buyers of anything they consider important, think but don’t always ask.

  1. Who are (company)?
  2. What do they do for their customers?
  3. Who are their top customers and what have they done for them specifically?
  4. Others offer the same things, how is this company different from the others?
  5. We have been let down by others. How do we know this company will do what they say they will?
  6. How can we be sure that we are getting good value for money?

It is easy to answer these questions with platitudes and reassurance however; the only truly satisfying responses consist of end to end verifiable facts.

Of those who have participated in the the top six exercise in training or assessments, few have been able to approach a perfect response to all six questions even though they were forewarned.

If an employer can't articulate effective answers, a commission only sales person has no chance accept to make it up. Made up answers can't be verified and inevitably raise resistance.

The only solution is for the seller to gather its best brains, and if necessary, outside consultants to come up with fact based answers to these questions that a customer could verify.

Facing objections is an inevitable part of selling. There are two points in a sale when objections are commonly thrown up, at the beginning and towards the end. The nature of the objections likely to be raised is easy to anticipate.

While superstar salespeople will have their own ways of dealing with all types of objections, most others won't.

This is another area where forethought, planning, and preparation can make all the difference. Employers need to provide credible model responses for all common objections and then have people practise until they can use them fluently.

Not all selling engagements follow a predictable path yet having a sales process framework dramatically improves transparency, predictability, and manageability for both salespeople and their employer. Once a common process is identified, it becomes much easier to address obstacles and choke points that derail some campaigns. Once obstructions are recognised, solutions can be developed.

Many employers have some of this work completed. Those who have a comprehensive understanding of their sales process, the obstacles that disrupt it, and practical solutions for overcoming them are in a position to help their sellers succeed. Compiling this vital knowledge into an accessible oracle or guide, gives salespeople a significant advantage over competitors.

From a salesperson’s perspective, success lies partly in choosing what to sell. Testing potential employers for solutions to each of the aspects discussed above will highlight the best opportunities. Employers who have invested sufficient forethought, planning, and preparation will attract better candidates however they are compensated.

As Tom Peter’s put it, “The only reliable source of competitive advantage, is to get better faster than your competitors.

Watch these short videos for full details of the Sales Success Formula.

Article by Clive Miller

If you need to build a business through commission only sales staff, or if you want to make a career as a sales agent, we can help. Telephone +44 (0)118 983 3887. We will be pleased to learn about your needs and talk through some options. Send email to custserv@salessense.co.uk for a prompt reply or use the contact form here.

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