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by marcus0x62
880 days ago
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A little bit of column a, a little bit of column b. There are industries where sales reps are paid only on commission. The advantage to the company is simple: you don't pay anything to sales reps who don't sell anything. That's where the commission system came from. So, some of this is historical, and, yes the metrics are really obvious. At least the core revenue metric is. But, that's a lagging indicator of performance -- there are endless debates about the leading indicators of sales performance, and none of those are nearly so clear. Second, most people aren't any good at sales and aren't ever going to be good at sales. The performance distribution is as close to a Pareto distribution as I've ever seen. The sales reps you want -- the ones that bring in 80% of the revenue -- certainly are motivated by "incentive alignment." Actually, they're motivated by being paid enormous sums of money, and they know that if you won't pay them, the competition will. Third, the sales reps have more leverage than many back-office workers in that their work is very fungible. Or, at least, sales rep believe and act as if they have a lot of leverage. They don't go to school for years or develop deep domain expertise that might not translate to a competitor. They'll happily take their skills elsewhere if they feel there is a better opportunity secure in the knowledge that if you can sell widget a, then you can also sell widget b. |
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