“If you are in business, you are in commission sales. When your product sells, you make money. When it doesn’t you don’t.” – Bob Burg
Commission is an important part of a salesperson’s life, but which type of plan is best for you? And which will allow you to take home the highest reward? No sales commission plan fits all salespeople or all companies and whilst the opportunity is available, there are no guarantees when it comes to achieving financial success through commission. It takes self-discipline and hard work.
There are 3 basic salary/commission plans:
1. Salary Only: Usually used when a new salesperson is brought into an organisation.
With a base salary, you know you’ll always be taking home a steady amount. This type of salary plan mainly attracts security-focused sales people or those who are new to the industry. It’s easy to administer but may not motivate salespeople to reach as high as they can.
2. Straight Commission: This is a great way to motivate competitive selling behaviour.
Straight commission usually offers high commission rates, more freedom and more opportunity. If you’re a highly motivated performance hunter, this could be ideal for you, but beware, earnings and job security can be unstable if you don’t hit your targets.
3. Combination Sales Commission: A basic salary with an incentive based on sales made.
Potentially the best of both worlds – a stable salary with added rewards. Whilst this is a popular choice as it provides the security of a salary but also offers a little extra to strive for, a combination plan can often come at a price – a significantly lower commission rate.
Salespeople need to be motivated and focused in order to make a living, whether on a basic salary or a high commission rate. If your commission plan isn’t right for you, then it might be time to recalculate to see which will give you the greatest reward and look for a new opportunity which will accommodate your needs.
Which commission scheme do you prefer to work with and why?
Hays Sales UK are experts in all areas of sales recruitment. To find out more about how our highly skilled consultants can support you, please visit our website.
