Why Must You Pay Sales People Commissions? (a16z.com)

An anonymous reader shares an article: Sales is highly competitive work. That word -- "competitive" -- is the key to a high-performing sales organization. In order to be great at sales, you must outsell the competition. The competition might be a product from another company; it might be an internal project at the target company; or it might be the undying desire of the target customer to do absolutely nothing, which is often the toughest competitor of them all. At the end of the day, it's all a fight. And how do you get the most fight out of an organization? By offering a prize. As the old boxing saying goes, "This is prize fighting. No prize, no fight." Prizes and competition are critical to building a healthy sales culture. So what's an unhealthy sales culture? One that's governed by politics. Sales people must sell into highly political environments to succeed and that's why they don't want to live in one. If you do not evaluate and pay on what sales people sell, then what do you evaluate and pay on? Getting along with others? Kissing the boss' butt? Talking a big game but delivering nothing? Sounds like politics and sales people instinctively know it. When a CEO says, "we're going to evaluate you on things consistent with the culture" the sales person hears: "we are going to toss out objective financial metrics for the subjective will of the king." Great entrepreneurs are great innovators, and innovators love to innovate. But before you innovate on sales compensation, make sure you understand the strengths of the old system.

Comments

Because they see the money

[gurps_npc]

When you hire someone to write code, they have no idea how much profit you are going to make off of them. Same thing when you pay someone to cook/wait/do carpentry/be a reception/ or do 90% of other jobs.

But when you pay someone to be a salesperson they know EXACTLY how much income they generate. It's not that hard to estimate how much profit they are earning for the company. This puts them in the single best employee/employer bargaining position.

So bosses HAVE to give sales commissions. Otherwise all the good salespeople quit and move to the competition who is willing to do it.

Salespeople have the best leverage, so they get the best deal. In exchange they have to give up safety. It's single most capitalistic employee job.

Re:Because they see the money

[szy]

A good product almost sells itself.

A product that almost sells itself is simply priced too cheap ;)

Re:Because they see the money

[tomhath]

High volume/low price tech can get away with advertising rather than a sales staff.

But semi-custom products that sell for hundreds of thousands or even hundreds of millions of dollars (e.g. Epic Electronic Medical Record) are always sold one-off to very cautious buyers.

Re:Because they see the money

[phantomfive]

In tech on the other hand, commissioned sales is stupid. A good product almost sells itself.

You've obviously never done B2B, on either side.

Re:Because they see the money

[Anonymous Coward]

Is that the business side or the business side?

LOL, nevermind... captcha: "backside"

Re:Because they see the money

[Maxo-Texas]

99% of the products on the market beg to disagree with your position.

Sales people sell a very restricted range of products.

Usually, as you allude, over priced by relying on emotions or sex to trick you into spending too much.

Re:Because they see the money

[whoever57]

But when you pay someone to be a salesperson they know EXACTLY how much income they generate.

That's true, but not the complete picture.

In general (VC funded startups excepted), what is important to a company is profit, not revenue. A sale person who increases revenue simply by agreeing to lower prices and hence at reduced profit is not so valuable to the company.

This is a very important concern in software companies, where the cost of manufacturing is zero, yet, customers must pay enough to support future product development.

Re:Because they see the money

[HornWumpus]

Actually I have.

I quit that job after a goddamn salesman fell into a trap question (we could report data we didn't have). The client knew he was lying, he knew it, the boss knew it. But we had to produce an empty report with columns of 0s. So he could pretend.

Nobody in the B2B world has 'good products', it's all SAS, Oracle apps etc. Of course they have to pay sales critters to push that shit. Our product wasn't great, but our competitor was an EDS division. So we sold a lot of systems, based on the fact they actually worked, albeit imperfectly.

Re:Because they see the money

[phantomfive]

Nobody in the B2B world has 'good products', it's all SAS, Oracle apps etc.

A lot of that stuff is good. Good as measured by: will having this product save money on the bottom line?
It doesn't have to be good, it doesn't have to be pretty, it has to let you fire more people than the product itself costs.

Re:Because they see the money

[Killall -9 Bash]

Captcha: "gofuckyourelf"

Re:Because they see the money

[parkinglot777]

I agreed that salesman/saleswoman should get commission as a motivation to do the job. If there is no motivation, why would a person try to do his/her best for her job? However, I am not going to get into abuse of the model though (for both not enough commission and overly promises) because that would be a completely different topic.

I actually agreed with the other poster that TFA is a troll. Just because TFA has the word "engineering" in it -- comparing engineering with sales job -- it should not be posted here at all.

Re:Because they see the money

[goose-incarnated]

Captcha: "gofuckyourelf"

My poor elf!

Re:Because they see the money

[Anonymous Coward]

uh, no shit sherlock, which is why the GP said "how much income" not "how much revenue." Obviously you don't let salesmen sell at whatever price they want.

Re:Because they see the money

[shaitand]

"A product that almost sells itself is simply priced too cheap ;)"

It can be, by an entire sales commission worth. Just offer the sales people a variable salary that ranges from minimum wage to what your marketing people make depending on performance. People who have a knack for sales aren't everyone but they aren't uncommon like those with the raw capacity to learn to be talented in STEM. Pretty much anyone who was popular in high school has what it takes. There is no reason the performance based incentive has to scale to a major chunk of the deal.

Re:Because they see the money

[rickb928]

Ditto. Double Ditto.

Re:Because they see the money

[war4peace]

Those pointy ears though... mmmmm....

Re:Because they see the money

[HyperQuantum]

A product that almost sells itself is simply priced too cheap ;)

Like toilet paper?

Re:Because they see the money

[Anonymous Coward]

I've had salespeople sell things that I'm convinced cost the company money in the long run. They should have negative commissions.

Re:Because they see the money

[Anonymous Coward]

I agreed that salesman/saleswoman should get commission as a motivation to do the job. If there is no motivation, why would a person try to do his/her best for her job?

Salesman: Our product does X, Y and Z.
Buyer: Deal! I wanna buy!

So you're proposing that a person who just lists the features of a product should be paid a commission. However, the software developers/engineers should not be paid commission even though they did the bulk of the work in implementing those features. What a ripoff! Now we know why companies are so rich.

Re:Because they see the money

[nine-times]

Salespeople have the best leverage, so they get the best deal.

It's not just that. As you mention, you can easily see how much money a salesperson is bringing in, which provides a simple metric of job performance. Providing incentives for job performance is generally difficult because there aren't good metrics.

If you were to pay a programmer based on the number of lines of code they write, then their incentive is to write a bloated program with a lot of lines of code. They can game that metric, which isn't good. If you waiter simply based on how many tables they serve, then their incentive is to serve a lot of tables, even if they don't do it well. That's why it makes sense to have a portion of their income tied to tips, which incentivizes them to focus on customer satisfaction.

But with sales, there's a great job performance metric for how well a salesperson is doing. It's not an easy metric to game. The amount of money they make in sales is generally going to be proportional to the benefit they provide to the company.

If other roles had such a direct metric that was equally hard to game, I think you'd see more economic incentives being tied to those metrics. For example, I might expect that factories have some kind of incentive based on the number of units a worker can produce that pass QA. It's a pretty good metric of performance that's hard to game.

Re:Because they see the money

[Altrag]

TP isn't selling itself. It's being sold by assholes.

Re:Because they see the money

[Durrik]

You also have to structure the commission right. I worked for a company that bought another company that had just straight gross commission for the the sales people. That company was losing money which is why they were bought. It turned out a lot of the problems were caused by that commission structure, where the sales people did everything to get the sale together, including marking the product down so that it was sold at a loss and offering free support. They didn't care about the profitability of the company, only their own bottom line.

If you structure the commission based on the profit on a deal then the sales people will only push the high profit margin products and newer products that are still working off their R&D costs get neglected and may never become profitable.

While I agree you have to provide commission to encourage your sales force, you have to do it in such a way that is of value to the company. Ideally it would be of value to the customer too, but Wells Fargo proved that isn't usual.

Re: Because they see the money

[Anonymous Coward]

If sales people want to keep commissions, they need to commit less fraud, which is why Wells Fargo and such let its sales staff commit do much fraud, they were very likely driven by commissions with penalties for not meeting a Quota.

Re:Because they see the money

[Shotgun]

And dirty assholes at that.

Re:Because they see the money

[Anubis IV]

By that logic, wouldn't Apple be considered underpriced?

After all, they don't pay commissions, so the products have to sell themselves, but they have also had the highest retail sales in the world for the last several years running (the second place retailer has been Tiffany's, but at last I heard, Apple had annual sales around $6000/sqft to Tiffany's $3000/sqft, with the margin growing each year). As such, the only reasonable conclusion we can reach from what you've said is that Apple is pricing their wares too cheap, which may mean that you're the first person ever on Slashdot to suggest that Apple is pricing their stuff for cheap.

Of course, the summary is bunk as well. After all, it would suggest that Apple's retail sales are failing outright because they don't pay commissions, despite the evidence to the contrary.

Re:Because they see the money

[sfcat]

And dirty assholes at that.

I think you mean shitty assholes.

Re:Because they see the money

[Anonymous Coward]

I managed, as an engineer, to bargain for a percentage of sales on the product lines I'm responsible for. Gross, not net ("Net is for suckers"). My skill set is rare, so it was easy enough to show that my contribution to the top line would easily exceed my commission. Not only for this year, but for years to come. That's right, I even managed to get a trailing commission that lasts up to 10 years after I leave.

Re:Because they see the money

[sfcat]

If other roles had such a direct metric that was equally hard to game, I think you'd see more economic incentives being tied to those metrics. For example, I might expect that factories have some kind of incentive based on the number of units a worker can produce that pass QA. It's a pretty good metric of performance that's hard to game.

Its easy to game. Most systems are. In this case, its about promising the impossible and giving away freebies on the backend to make up for it. I've worked at many places where many specific customers went from being profitable to unprofitable due to sales people trying to increase sales but not giving a shit if the entire sale ended up being cash flow positive to the entire company. I've seen it more places than I haven't see it.

Basic rule, if you don't know how to game a system, you probably just don't know enough about that system yet. All systems that manage humans have fraud and gaming in them, its more a question as to what the rate of gaming the system is. And for salespeople, in my experience its a very high rate of gaming.

Re:Because they see the money

[Ryanrule]

Yeah bullshit. I've seen sales sell things that cost the company money, yet they get the bonus and the Hawaii trip. Fuck sales.

Re:Because they see the money

[Pinky's Brain]

If they were truly cautious they wouldn't be talking to a confidence trickster, they'd ask to talk to engineers.

They are sold one-off to very hesitant buyers.

Re:Because they see the money

[Anonymous Coward]

Why should they get a commission?

Why shouldn't purchasing guys get a commission on everything that they buy "as a motivation to do the job"
Why shouldn't engineering guys get a commission on everything that they build "as a motivation to do the job"
etc.

Re:Because they see the money

[Darinbob]

I was at a place that sold business software. I was seriously underpaid but I was hungry and this was the first job offer after leaving school. There are literally Ferrari's in the parking lot though, most belong to sales. We had a cheap product that we sold for a ton of money. After I left I sort of learned that despite being crap, the competition was actually worse. The sales people were selling features that didn't exist, and one even admitted doing it, and they do it because they're caught up in all the sales fervour and dollar bills are dancing in their vision. One time in three years, and one time only, one of the Ferrari driving guys bought a single large pizza for the developers.

Re: Because they see the money

[Anonymous Coward]

Yeah, its pretty obvious that most people commenting here are pretty low on the totem pole of responsibility in their respective work places. Sure, the business world is no longer in need of salesmen for consumer products. Good thing too, because I can't think of any non-scammy situations where a role like that even exists for a salesman to fill(outside of those legally required, like cars). On the B2B side, though? Its an entirely different, and much more complicated ball game. The most successful salesmen of today need to have a working knowledge about their offerings, the behaviors of their market, and their positioning in said marketplace. Every single new deal is a tailor-made solution that requires, at minimum, an understanding of a profit & loss statement, and in which direction the company is trending. No, those aren't too terribly difficult to get a handle on....if you're reading the latest from your brother-in-law's towing company. Try discerning one for even a mid-sized business with more than one location and several ops managers coding expenses to the wrong fucking place. Look into the forecasting techniques that companies of today use for the year end budgeting process. You can't be a halfwit. A comprehensive understanding of balance sheets and cash flow statements becomes critical during renegotiations too, especially when the stakes are high. A bad salesman whose getting the squeeze from a major client will be the difference between solvency and insolvency. If all you can really come up with are some examples of guys you know who make "sleazy moves," (ones you don't even understand) to get ahead, or how marketers can accomplish these things alone, then I'm inclined to believe that you've never been in charge of ensuring the financial success of anything. Pretty much, you have no clue...and you probably overvalue your own role. Now, I know plenty of bad salesmen, but there are many more engineers, with great products, who are filling up the business graveyards, because they assumed a great product could sell itself. That ain't how life works, folks.

Re: Because they see the money

[Anonymous Coward]

nope... got that in the wrong order... it is sold TO assholes

Re:Because they see the money

[Anonymous Coward]

This though is part of the problem. Nearly everywhere I've worked sales is compensated based on the value of the sale and not after taking into account any/all increased costs. For example, the sales guy comes in and says "I just committed us to delivering a solution for Acme in 30 days that gives us a chance at a $100m market". In order to deliver that in 30 days we have to put new systems in place, new code that isn't as tested or optimized as needed and increase the support staff load. The sales guy gets his commission on the sale, but 3 months later not only has the projected revenue not appeared, the expenses reported by the IT department have gone up and the tech debt has been increased. And that same sales team pops up again with their next $100m deal. And now it is budget time and finance is pushing back on what we need.

This exact situation has been occurring where I work for most of the last year. Our leadership is trying to broaden our product offerings so they keep turning over sales and marketing folks, each new genius comes in with his or her ideas saying that unless IT changes everything to exactly what they want they just can't be successful, and so our dev/testing/support teams have been in fire drill mode since before last October. And none of these grand ideas has made a blip in the company's overall revenue compared to the core business line we started with 10 years ago.

Re:Because they see the money

[Bender0x7D1]

People who have a knack for sales aren't everyone but they aren't uncommon like those with the raw capacity to learn to be talented in STEM.

I think your bias is showing through. A good sales person is RARE and not only doesn't make the process painful, but makes it ENJOYABLE. In fact, they make it so enjoyable, and make you feel like you got such a good deal, that you look forward to going back - sooner than planned.

Re:Because they see the money

[nine-times]

In this case, its about promising the impossible and giving away freebies on the backend to make up for it.

That only works if you give your salespeople the discretion to give away freebies.

Re:Because they see the money

[shaitand]

Rare? Hardly. I suppose there are really lonely people out there who follow this methodology. Me, I tend to buy a stapler because I need to bind paper together. It doesn't matter how friendly the sales guy was, I'm not going to buy more staplers than I need. Office depot has better and more friendly sales people than Amazon's non-existent sales staff but Amazon crushes them because they have better marketing, they are more convenient, and they are cheaper.

Re:Because they see the money

[Anonymous Coward]

But when you pay someone to be a salesperson they know EXACTLY how much income they generate.

but these leads are shit, John!

Re:Because they see the money

[ebvwfbw]

Some of it is obnoxious though. Take when AOL went with SGI years ago. That sales chick through NO effort on her part received 10s of millions of dollars in her "commission". WTF? It was so much that they cut her territory down to just AOL. It was like winning the lottery for her. What about all the other people at SGI that made that possible? NOTHING! No money for them from that!

I didn't work for SGI, I was working in Northern Virginia when it happened and it made a lot of people mad. Inside and well outside of the company.

Re:Because they see the money

[Anonymous Coward]

So true. Also when you run the number on what generates revenue that pays everyone's salary, the quality of the sales staff is utterly critical. The difference between an expert and a mediocre is radical to the top line and bottom line. You want to hire the best and make sure they close sales as well and quickly as they can. You CAN NOT SKIMP on this because it's life-or-death for your company.

Re:Because they see the money

[Anonymous Coward]

I've worked for two companies in a row where I know for a fact that this was/is a regular occurrence with certain sales people and I wish they would have done such a thing. The only way to fix the problem would have been to charge their expense accounts against their commission and give them negative commissions for sales that lost money. I would love to see a situation where salespeople actually had skin on the up and downside risk, instead of simply on the upside (which allows them to write contracts that screw the company and engineering over completely).

Re:Because they see the money

[Anonymous Coward]

I have worked in R&D, as a software engineer, and now I am a travelling salesman. No pun intended.
As an R&D engineer you are a cost for the company, during good times they tolerate you and during bad times you will suffer.
In sales you are the savior of the company during good times and during bad times you are the only hope. Both ways they will throw money at you.
I learned my lesson and stay in sales.
You might wonder how that is possible but B2B sales is different from selling vacuum cleaners door to door; I don't get commissioning since it definitely is team work and if your numbers aren't right there will not be any deal. On the other hand the pay is not bad and nobody questions your initiatives to travel somewhere.

Re:what is this garbage?

[olsmeister]

I was wondering the same thing. I'm not sure this belongs here.

The nice thing about a sales job is only 1 metric

[Anonymous Coward]

$$

What does this have to do with tech

[Anonymous Coward]

I don't understand this site anymore.

How is sales any different?

[Anonymous Coward]

How is sales any different than anything else? People work for money, if you want loyalty get a dog.

Why pay them at all?

[Anonymous Coward]

If you are paying salesmen to sell, then your products are shit.

Re:Why pay them at all?

[Anonymous Coward]

Why yes, it is shit. But it sells.

Re:Why pay them at all?

[Anonymous Coward]

That's not sales, that's marketing. Do you understand the difference? Sales is paying people to stand in line for your new cell phone announcement. Marketing is not having to.

Sounds like whining to me

[mamono]

Just another example of stodgy people trying to hold on to antiquated business models. I agree people should be compensated for their work. However, there is a plethora of available information out there now. I heavily research most everything I buy and already know what I want when I come in to the store. By the time I pick my product I'm more interested in the best price.

Re:Sounds like whining to me

[Anonymous Coward]

By the time I pick my product I'm more interested in the best price.

And then it's time to talk to a sales person, who's going to see if he can cut you a deal.

Re:Sounds like whining to me

[Anonymous Coward]

This goes beyond the store model you discuss. There are lots of people who may not know everything about a car, a new software system for their enterprise or new hardware and the support models involved. This is not about iPads.

Re:Sounds like whining to me

[HornWumpus]

And is going to be disappointed as I'm just 'showrooming' his employer. Internet vendors, not having to pay commish will almost always have the best price. Shipping is covered by no sales tax.

Re:Sounds like whining to me

[Anonymous Coward]

Sorry brotendo but the money in sales isn't in retail and consumer sales. That's the kind of crap they relegate to high school students and other low-to-no-skill people.

The real money in sales is business to business sales. And those people positively earn any commission they make.

Re:Sounds like whining to me

[barc0001]

> I heavily research most everything I buy and already know what I want when I come in to the store.

Great, you, I and many people like us all do that. What about the other 90% of the population? Many people buy many things they know little or nothing about in part because they have no idea how to do that research themselves. That's the segment of the market that salespeople are useful for. And many of those salespeople are experts in the application of their product, especially in niche stores. You walk into a high end store looking for a suit, the salesperson is going to be able to tell you what will look better on you than you will, guaranteed.

Re:Sounds like whining to me

[barc0001]

> 'showrooming' his employer. Internet vendors, not having to pay commish will almost always have the best price

Some day we will be trading inconveniences and costs. Already starting to see it. With companies like Wayfair, it's practically impossible to get a feel for what their products are like in reality, so while it's nice they have free shipping, if that couch you order from them isn't comfortable or clashes with the rug or whatever and you want to exchange it, you still need to box it back up and arrange shipping back. How much of your time will be eaten by that? And if it's a straight return, you pay shipping.

Many times I don't mind going to a brick and mortar store for something when I can pick it up/sit on it and then walk out the door with it. Even if it means a premium over online, I get it today, and I know if there's a problem it won't be a massive production to deal with.

Re:Sounds like whining to me

[JohnFen]

That's the segment of the market that salespeople are useful for.

That's the segment that salespeople will heavily exploit. Commissioned salespeople will exploit them even more energetically.

Re:Sounds like whining to me

[MerlynEmrys67]

And is going to be disappointed as I'm just 'showrooming' his employer. Internet vendors, not having to pay commish will almost always have the best price. Shipping is covered by no sales tax.

It is cute that you think you can get multi-million dollar enterprise software at a discount on the internet

Re:Sounds like whining to me

[barc0001]

Sure, but what's the alternative? People buying shit at random and hoping for the best?

Re:Sounds like whining to me

[Anonymous Coward]

That's amazon and ebay :) So one day the sales positions you mentioned will be eliminated, given time.

Re:Sounds like whining to me

[shaitand]

Absolutely and you seem really well informed on your choice of phone. But hey, did you know they developed a new type of case that will never break and are on sale for $10 vs $20? And we match those other guys price PLUS you can get a $300 smart watch on a promo right now for $5 if you get a $30 microsd card with your phone and you need one anyway right? Oh hey, did you know the manufacturer warranty doesn't cover the screen? You did need a screen protector ($10), right? Oh and a protection plan because water damage isn't covered either. Oh and if you do it as a package we'll give you that phone for just $200 instead of $399 with a 2 yr commitment.

$250 today.
$2765 total = $10+$5+$30+$200+$480($20/mo because the smart watch requires an additional line)+$1920($80*24 contract)+$120($5mo protection plan)

If you'd done it on your own you'd have paid $720 $399 + $30/mo + $10 screen protector and case and probably never wanted or needed the microsd card or watch.

$409 today
$720 total = $399 + $30/mo + $10

Of course that assume they didn't get you for VR headgear, service add-ons, chargers, etc.

Having sales people hasn't lost all point in all industries. The industries where those people should be paid commissions on the size of the deal are getting fewer and farther between.

Re:Sounds like whining to me

[shaitand]

"Shipping is covered by no sales tax."

You mean back in the day where the best prices weren't found at like 3 mega sites who all charge sales tax in pretty much every state?

Re:Sounds like whining to me

[Rakarra]

Just another example of stodgy people trying to hold on to antiquated business models. I agree people should be compensated for their work. However, there is a plethora of available information out there now. I heavily research most everything I buy and already know what I want when I come in to the store. By the time I pick my product I'm more interested in the best price.

The submission is desperately trying to justify a business model that customers actually hate and work counter to their interest. We're not likely to buy that shit, but the VC is certainly trying as hard as he can to argue that everyone from the customer to the employee is actually happier with the sales commission model. Here's the reality:

Employees hate the sales commission model, because your 'employees compete with each other' leads to a low salary, high stress job for the salesperson.

Customers detest the sales commission model, because they know employees are there with a "sell at any cost" mindset. They financially benefit directly from each sale, which is a true conflict of interest with what the customer wants the most: getting good advice to be able to pick out the product that they really need, or even no product at all. Your commissioned salesman is a lot less likely to admit that the products they have won't meet the customer's need.

Upper management likes the sales commission model because it means the employees work for less money, and they're undercutting each other far more than the "political" model that the blurb says everyone hates and is inferior, meaning there's less of a chance for them to organize, to actually get a stable salary and stability in life. Keep the employees busy working against each other, and they won't help each other.

Re:Sounds like whining to me

[HornWumpus]

100% discount!

Re:Sounds like whining to me

[Anonymous Coward]

That is where the skill and the commission based pay comes in. If you go in wanting to buy a specific car for a specific price, then walk out with the next model up or an extended warranty, etc. that was value added to the sale that a clerk who just processes your request would not have generated.

Besides there is a lot more to sales than retail. B2B sales that take months and deal with millions of dollars is a different sort of thing.

Re:Sounds like whining to me

[sfcat]

Sure, but what's the alternative? People buying shit at random and hoping for the best?

Sure, its essentially what we have now anyway. And it would encourage people to get better at researching products which will over time improve engineering and product quality.

Re:Sounds like whining to me

[HornWumpus]

The worse the product they sell, the higher the commish as a % of gross.

I don't know of any industry that pays commish anywhere near what the boneyards pay plot salesmen. About 25% of gross for plots, up to about 60% for the truly stupid shit like mausoleums and bronze caskets.

The successful plot peddlers make seven figures, selling at 'retail'. Most goto 3 or 4 church services every sunday, that's where the chumps congregate.

Re:Sounds like whining to me

[HornWumpus]

Buying at random or buying the garbage the salespeople are incentivized to move?

Neither gets you what you need.

If you need advice, find someone you can trust.

Re:Sounds like whining to me

[Darinbob]

Yes, and you won't see a typical sales person. The article is talking about selling products to an organization (a company, hospital, government, charity, social club, etc). They don't walk into the local computer store to buy a networking solution, and they don't shop online for a payroll system, and they don't search Amazon for new drug delivery system, and they don't head to Crazy Freddy's Auto Emporium to buy a fleet of delivery vehicles. Even for consumer goods, they're most oftennot being sold to individuals, they're being sold to stores, chains of stores, big box stores, etc.

a16z looks like a junk site

[xxxJonBoyxxx]

The source of the paid article is a16z.com, which sounds like a phishing site but it's actually some crappy VC's blog.

Re:a16z looks like a junk site

[Anonymous Coward]

If Slashdot is going to start posting paid shill articles, the least they could do is mark it as such.

Re:a16z looks like a junk site

[Anonymous Coward]

Not really a "paid" shill article, they just paid a homeless guy five bucks to give msmash a bj in a back alley.

Re:a16z looks like a junk site

[Anonymous Coward]

They do. There's a dollar bill and a suit to indicate both "paid" and "shill".

Re:a16z looks like a junk site

[Anonymous Coward]

euh, where have you been? 90% of slashdot posts are now shill articles.

Re:Must?

[Anonymous Coward]

So you subscribe to the 'if you build it, they will come' philosophy? Good luck with that.

Like other commissions

[sanf780]

How about we compare sales commissions to a common one in the US that is paying the waiters and waitress with tips? After all, the costumer is paying either directly through tips or through sales commissions. I imagine it will put a lot of stress not to have a steady income like I have. Also, I do not get hefty bonuses either.

Re:Like other commissions

[drinkypoo]

This is the ideal example. There are restaurants even in the USA which do not permit tipping. But in order to retain employees in such an environment, you have to offer them something else, like decent pay and maybe even benefits.

If you pay salespeople sufficiently, then you can probably retain them. But then again, if your competitor is offering a percentage of the action... I'd say competition for the most competent sales people is half the reason why you have to pay salespeople a commission. The other is that lots of them will wine and dine on your dollar if you don't tie their compensation directly to their performance.

Re:Like other commissions

[angel'o'sphere]

And how exactly would it be lawfull to prohibit tipping?
When I worked (on minimum wages) in a bar, I usually made more money from tips than from the wage.
And in Europe as a part time worker you hardly get more than minimum wage. To have a decent (not big, nut ok) wake you need to be sallary employes. And even then, no one has any leverage about tips. The worst that can happen is that the tips are pooled, shared with the kitchen and guys on the tap, and redistributed to the 'walking force'.

That a boss can deny employees to accept tips is absurd, what a fucked up country you live in, it makes me sad ...

Re:Like other commissions

[Gilgaron]

Same deal all over, pretty much any "all inclusive" resort or cruise is going to have a policy to fire staff that accept tips.

Re:Like other commissions

[thegarbz]

And in Europe

As in Europe the country? Which part of Europe is that, that bit in the middle where it's customary to tip 10%, that bit a few hundred km in one direction where it's customary to tip just enough to not get spare change, or that bit a few hundred km in the other direction where people are paid a living wage and tips are not only unheard of, you get strange looks if you offer them usually followed by getting your change back.

Re:Like other commissions

[shaitand]

"But then again, if your competitor is offering a percentage of the action..."

They'll stop the moment their major competitor isn't doing so because not paying that commission means you you can take the difference as profit and beat them on the stock market or undercut their prices aggressively thus increasing sales while maintaining the same profit margin which increases profits and beats them on the stock market (stock price is what companies care about, not profits).

This is how every major industry works and why you get burned in more or less the same ways by all the major "competitors" as a consumer. You get the same result as active collusion and monopoly behavior without need for any of it because the competitors in a given industry have common interests.

Re:Like other commissions

[jader3rd]

And how exactly would it be lawfull to prohibit tipping?

Worker protections. When tipping exists, employers can abuse employees by offering criminally low wages. In addition, it's false advertising as it misrepresents the cost of the product/service. If gratuity was made illegal, employers would have to pay their employees better wages, and in addition, prices would reflect the real cost of the product.

Re:Like other commissions

[stephanruby]

Companies will only pay sales commissions because they have to. I've seen a mortgage company try replacing its sales staff that with much cheaper salaried employees, but the salaried employees completely failed to sell anything during a peak market (probably because those salaried employees were too afraid to break the law with the puny salaries they received).

On the other hand, when Kinkos decided to stop paying commission to its sales force, all the enterprise relationships had already been established by that sales force, so Kinkos didn't lose a cent cutting them out. Plus, Kinkos didn't even need to pay them unemployment benefits because their base salary was something like $8 an hour, so it just transferred them to work in their shops until they'd quit on their own (those sales people later sued, but lost).

If we compare this to the job of waiters and waitresses, it's the same underlying principle. If restaurants could keep the tips for themselves without increasing wages, they would. Or if restaurants could avoid using waiters and waitresses altogether, they would.

Re:Like other commissions

[angel'o'sphere]

Sorry, don't get your words.
What has tipping to do with wages?
And prices?
The price is on the menu, either it includes VAT, or it goes extra. Either it includes service or not.
Tips have nothing to do with that.

Re:Like other commissions

[angel'o'sphere]

I never heard about such nonsense.
I give tips everywhere.

Why would you fire one who got tips? It is obviously one of the better workers, otherwise he would not get the tips, sounds plain stupid.

Considering that the USA not so long ago did not pay waitresses but they had to rely on tips as 'income' I really wonder where that attitude/impression is coming from.

Re:Like other commissions

[angel'o'sphere]

Germany, and we don't have 10% rule.
That is an american thing.

I round up to the next or second next Euro, only in case we are plenty of people and I pay for all, I give an about 5% tip, sometimes more.

Anyway, interfering with tipping is illegal. If a customer pays tips to the "host" that is his own decision and it is a privilege of the "host" to accept it.

Contracts about tips would be void, getting fired for accepting tips would be a slaughter for the employer in court.

No idea why you live in a fucked up country with fucked up laws and even think that your way of doing it is 'normal' or 'natural' way of doing it.

If one here would be so stupid to say loud: I fired her/him, because she/he accepted tips, he basically can close his business.

Re:Like other commissions

[david_thornley]

Employees work for money. If the customers tip more, the restaurant can get by with paying them less. The IRS will assume a certain minimum number of tips, and servers owe income tax on that.

Most places in the US expect tips, and hence servers are seriously underpaid if not tipped. If you do tip, that's money you paid for that meal that wasn't included in the price on the menu.

Re:Like other commissions

[angel'o'sphere]

You want to tell me, if the restaurant owner knows people give tips, because they like the nice face/ass of the waitress he starts to reduce the wage?
And how should that work? Hu? He writes in a newspaper: seeking service people, paying only 5$ instead of the usual 9$ because instead of the usually 10$ tips per hour you get 20$ here, because of your nice face and you are working your ass off?

Sorry, your economics 101 is not working, In comparable establishments the prices for meals are the same and the wages for employees are the same.

Tips have nothing to do with that.

If you do tip, that's money you paid for that meal that wasn't included in the price on the menu.
No, it is a gratitude for a service well done.
If I have to wait for attendance, for the bill for what ever, if he/she is un polite: no tips.
That has nothing to do with the price on the menu. You Sir, are an idiot.

But, fetch me a job where I'm not 'allowed' to receive tips, and get fired because of receiving them. I will sue the owner of the establishment into oblivion, just for the fun of it.

Re:Like other commissions

[jader3rd]

You want to tell me, if the restaurant owner knows people give tips,...he starts to reduce the wage?

Yes, 100%. Well documented, and well known. That's why in the US restaurant owners are allowed to pay wages less than minimum wage.

Re:Like other commissions

[Gilgaron]

For the "all inclusive" resorts, part of the relaxing atmosphere is that you don't have to carry money with you. If tipping was allowed then you'd end up tipping for better service instead of just always getting the best service. After dealing with the borderline aggressive solicitation for tips elsewhere in the Caribbean it does actually feel more relaxing not dealing with any of it.

Re:Like other commissions

[thegarbz]

No idea why you live in a fucked up country with fucked up laws and even think that your way of doing it is 'normal' or 'natural' way of doing it.

Huh? Maybe check who you're talking to. There's more than two people on Slashdot. I live in a country where tipping is both legal and never done since people generally earn a living wage and we don't play with pointless cash.

You should direct that comment to drinkypoo. I'm just pointing out that the EU isn't one country, and within the EU there are widely varying customs when it comes to tipping and paying for services, the least favourite of mine being "service charges" listed on the bill (looking at you Eastern Europe)

Re:Like other commissions

[david_thornley]

Sorry, your economics 101 is not working, In comparable establishments the prices for meals are the same and the wages for employees are the same.

My economics is fine. People typically work to get money (we'll leave volunteer work out of this). Suppose a server is going to earn $3K/month. Does it matter how much of that is salary and how much is tips?

In comparable establishments in the US, the prices for meals are similar, and you're expected to leave similar tips. The wages for employees will be similar, and the wages for people who get tips will be lower compared to people who don't get tips.

No, it is a gratitude for a service well done.

Not in the US, it isn't. You seem to fail to understand that. In the US, servers are expected to get tips, and diners are expected to provide tips. These are normally based on the cost of the meal times a certain fraction. A server must report a certain amount of tip income or justify it to the Internal Revenue Service. Restaurant operators pay servers less than you'd expect for the job, because they're expected to make it up on tips. There are special minimum wage laws for servers.

I'm not saying this is a good thing, but it's how it works in the US.

That has nothing to do with the price on the menu. You Sir, are an idiot.

In the US, it does. Add 15-20% to the menu price to get the expected tip amount. Vary from there, depending on service. I'm a citizen and resident of the USA; you'll have to decide for yourself whether that qualifies as being an idiot.

Re:Like other commissions

[angel'o'sphere]

The wages for employees will be similar, and the wages for people who get tips will be lower compared to people who don't get tips.
Sorry, I doubt that.
Who would work under such circumstances?

In the EU you would only get illegal workers to take such jobs.

I'm a citizen and resident of the USA; you'll have to decide for yourself whether that qualifies as being an idiot.
Well, no an literal idiot, but idiots that you accept such "laws".

In Germany tips are even tax free, no idea about the rest of Europe, though.

Re:Like other commissions

[david_thornley]

Suppose you're willing to work as a server for $20/hour. The restaurant owner could pay you $20/hour, or if you expect to make $12/hour in tips, the owner could get away with paying you $10/hour. Tell me why these circumstances are so undesirable. You get roughly the same competition. Some nights you're stiffed and some you collect unusually generous tips. It's not like you can go across the street and get a $20/hour job doing the same thing (assuming you're working in the same class of restaurant), because all the restaurant owners work the same way. You could get a $15/hour job, but it wouldn't come with tips. You could ask to be paid $15/hour as a server, and unless you were unusually good, nobody would hire you.

Re:Like other commissions

[angel'o'sphere]

Suppose you're willing to work as a server for $20/hour. The restaurant owner could pay you $20/hour, or if you expect to make $12/hour in tips, the owner could get away with paying you $10/hour.
No he would not, at least not in Europe.
I would politely decline his offer.

You could get a $15/hour job, but it wouldn't come with tips.
Of course it would. Because if my customers give me tips, I accept them.
If the restaurant owner fired me, I sue him. Simple, in Europe at least.

Re:Like other commissions

[david_thornley]

Okay, we've established that you lack clue zero point zero zero one about how restaurant pay works in the US. I'm not surprised it's different in at least some European countries. However, you do not seem to realize that money is, in fact, fungible, and an income stream that consists of wages and tips is, in fact, an income stream.

whipslash, can you please replace msmash?

[Anonymous Coward]

whipslash, if you still read the comments here, can you please seriously consider replacing msmash?

Time and time again we see msmash responsible for truly awful submissions ending up on the front page. This current one isn't the worst by any means, but it's totally irrelevant managerial gibberish.

As I look through the Firehose, there are several submissions that are far better than this one. They should be on the front page of Slashdot instead of this submission.

Then there are the frequent typos and other really basic editing failures we've seen in past submissions associated with msmash.

Can we please go back to getting submissions about stuff like software, computer hardware, Linux, programming, programming languages, science (real science, not politicized "science" like climate "science"), and technology on the front page?

Can we please go back to having submissions that don't have typos and other glaring errors in them?

Having somebody other than msmash do the editing here would likely help achieve those goals.

Re:what is this garbage?

[Anonymous Coward]

Agreed. The summary sounds like some kind of libertarian think tank manifesto written for car dealers and other places that like to screw over employees by using a commission system. Not sure how this fits under "News for nerds" or "stuff that matters".

Motivation

[Thyamine]

Isn't it really just about motivation? Every role has different motivation. Some benefit from additional compensation. Think about bonuses for meeting certain goals, or for being utilized a certain percentage of the quarter, or make a certain number of sales. A good organization understands what motivates their employees and matches it to business needs. Would it be great if we could all just be paid a nice wage, do our jobs well, and go home? Sure. But there are people who will slack and do the absolute least, and there are people who will see a bonus/commission/etc as a great objective to shoot for.

Coming from an engineer background, I think we often harass sales people since they are the non-technical ones in our teams, but we all have our own version of this.

Re:Motivation

[tomhath]

Isn't it really just about motivation?

No, it's about metrics. You can't reliably measure how much value most engineers or teachers add to an organization. But good salesmen are like star athletes.

Re:Motivation

[Thyamine]

They go hand in hand. Everyone has metrics to measure their performance. Those metrics are used for compensation for some roles. In bad situations those metrics are subjective or poorly chosen. Hopefully they are well chosen, with good milestones, and not arbitrary (lines of code) or subjective (you didn't try hard enough).

Re:Motivation

[Anonymous Coward]

Isn't it really just about motivation?

No, it's about metrics. You can't reliably measure how much value most engineers or teachers add to an organization. But good salesmen are like star athletes.

It's exactly that inability to "reliably measure how much value most engineers or teachers add to an organization" that leads to organizational decline (and eventually death.) E.g., ATT, IBM, ...

Re:Motivation

[Anonymous Coward]

Isn't it really just about motivation?

Yep. This is why many paper-pushing gov't employees sitting in offices are really unmotivated, as there is generally no incentive to perform. You get your yearly pay-bracket increase regardless of output. In my office we have occasional "gifts" given out to high performing employees, but this equates to picking an item worth $100-$300 from a cheesy online boutique (knife blocks, suitcases, watches, golf clubs). If an employee doesn't enjoy their work I can't see why they'd bother to do anything but the minimum. The main way to get a better salary is to get promotions, which doesn't require being good at your current job and also only works for people who want to manage. Thankfully I actually enjoy my job.

Re:Motivation

[shaitand]

"and there are people who will see a bonus/commission/etc as a great objective to shoot for"

Sure, but you can tie a variable salary or bonus to performance for sales without paying out massive commissions scaled to the deal. In reality marketing is doing more to bring you those sales than the actual sales people.

Re:Motivation

[shaitand]

"No, it's about metrics. You can't reliably measure how much value most engineers or teachers add to an organization. But good salesmen are like star athletes."

Bogus metrics. Star athletes are rare. Pretty much anyone with social skills and poor ethical radar has the talent to qualify as a sales star. The problem with sales goals and commissions is they credit the salesman with the sale. The top sales people simply didn't fuck up the first few deals, so were given bigger leads and/or had those first few clients dedicated to them, which means law of averages their sales figures were higher, the higher they move up the warmer the leads get like big dedicated accounts buying more of what they need or other big accounts referred by people on those accounts or over lunch with contacts on those accounts. Tada. Rockstar sales guy with great numbers that put the other sales guys to shame... except none of it had anything to do with some special talent unique to that guy.

Re:Motivation

[Altrag]

You could put the same argument toward the star athletes though -- they get some early goals so they get played more giving them more chance to score goals in future and so on.

Being a professional athlete in general obviously takes enormous amounts of practice, talent, skill and simple willpower. But the biggest difference between the "star" of a team and the next guy in line is often just the amount of play time. Sure there are exceptions where the star is truly leaps and bounds above everyone else not only on the team but in the entire league, but that also applies in sales as well.

Re:Motivation

[Altrag]

That depends entirely on your business. For consumer-facing products that are marketed in brochures, giant in-store billboards, TV spots, internet ads, etc then sure -- the marketing has done the lion's share of the work and the salesperson is really just trying to sell you extended warranties and other add-ons. Of course, their commissions tend to reflect that fact (so they might get a decent percent commission on an extended warranty, but a small or zero commission on the base product.)

With the push-back against junk add-ons like extended warranties though, we're starting to see box stores like that advertise that they're not commission-based. Of course instead they replace it with monthly quotas which are just as bad if not worse and less visible to the customer.

But for non-consumer products.. typically there is no advertising. Sales people just cold call until they find someone who might be interested (obviously they don't make blind calls -- they know what their product is for and try to identify people who at least would have a use for it before wasting their time making a call!) In that type of scenario, the salespeople are often the only form of marketing involved beyond maybe a trade show booth (usually run by the same sales people anyway) or the occasional magazine ad but nothing on the scale of consumer-level advertising.

Re:Motivation

[aktw]

It doesn't work that way in practice. All you end up doing is getting people to game the metrics needed for their commission, often at the expense of both the customer and their company itself through returns or bad experiences. A pretty interesting comparison is CompUSA vs Best Buy about 10-15 years ago. CompUSA did the sales commission route, including a heavy push on "TAP" (their cover-everything extended warranty). The best sales associates made bank by abusing the system, pushing products that customers didn't really need, and figuring out ways to process returns under another person's account (so it didn't count against their sales). Best Buy was across the street, didn't pay commission, didn't push warranties (offered, but not pushed), and there were no metrics for the employees to fuck around with in order to get their commissions. I worked for both, and it's absolutely no shock that CompUSA struggled for years before finally closing shop.

Re:Motivation

[shaitand]

Sure, but we look at more statistics with regard to athletes. Look at baseball, we look don't just look at the total number of hits a batter gets or home runs, we look at how likely the batter is to hit a run when at bat to determine their batting average. Getting more opportunities will increase your at bats but won't increase your hits when at bat except in the sense of getting more practice but you can do that outside the game. You don't just get a position on a baseball team, get a few lucky hits and have your play time increased. You go through several layers of lower level teams first and had to be that exceptional person who truly leaps and bounds ahead of everyone else, including the "stars" of other teams at all those levels. At the lower level teams you don't get more playtime as the star. And your stats count for the same amount as the people you play against for every achievement.

The comparison breaks down very quickly with sales. Comparing to a batter for instance, in order to correct for assigning clients after a single successful at bat with a pitcher every time that opposing pitcher comes up from then on the pitcher has to be paired with that same batter and signal the batter on what they are going to pitch. Also, the pitcher has to choose the slowest and easiest pitches and either be neutral to or prefer the batter hit the pitch because he needs someone to hit his pitches. Also, we need to assign the pitchers scores based on how many pitches they throw a season (to account for size of client and deal) and build a total, every time a batter hits the ball he gets the pitchers score added to his score.

Re:Motivation

[Altrag]

Most people don't just jump into the #1 sales job at the biggest companies either -- they start at the bottom as well just like baseball players.

Basically, you say there's no single number that matters in baseball, and then you lay out the single most important number: batting average. That's the one that everyone talks about, and its the primary measure of how good you are at batting, and thus how likely the coach is to put you on the plate.

Or take hockey. If you score a high number of goals, of course you'll get played more. But if you score few goals while getting a high number of assists, you'll also get played more because the metric they use isn't "number of goals" its "number of goals+assists" and maybe a few other factors like interceptions and whatnot.

To bring it back to sales.. would they benefit from a metric beyond pure "total dollars?" Probably.
  Customer satisfaction (measured by say, the number of return customers) may be something they look at. Some places probably track any interaction the customer has with the operation and thus could reward "assists" rather than just closes. Or track support calls later if you're in a business that has such so that you can get a long-term measurement of the sales' overall profit rather than just the immediate amount that might be lost to future costs. And so on. And I'm sure some places do these things (and likely things I've never thought of) because they're not stupid and in many (maybe most) cases, sales is a team effort.

There are exceptions of course. Real estate for example is usually a situation where the customer deals with a single realtor from start to finish. There's not really any "assists" involved, there's no future costs (once the sale is made and finalized, they're done with you unless there's something horrific enough gone wrong to prompt like lawsuits or something) and for most sales, there won't be any repeat business in the short term as most people don't buy and sell houses too often (and most of the ones that do have their own system in place). There's really no other metric needed beyond "how many houses did they sell?"

But if you're a sales rep for say, Coca-Cola.. you're looking at long-terms sales with (hopefully) repeat business on a weekly or monthly basis. You have to keep your customers happy over the long term, deal with the occasional "support" issue if there was a damaged crate or something, have a backup sales person to cover when you're on holidays and so forth. In those scenarios there's plenty of metrics to work with beyond just the flat dollar amount of the initial close.

Re:what is this garbage?

[Anonymous Coward]

But, but, but salespeople use computers and email so it's a tech artic...whatever, I give up, just change the mast to Business Insider and be done with it.

Re:whipslash, can you please replace msmash?

[Anonymous Coward]

Isn't it obvious? They just need to pay msmash a commission on all these paid posts, and quality will magically go up.

Re:Must?

[Immerman]

It's certainly a lot more beneficial to the customer in almost all situations...

Even a "Sale" means different things, complicated

[Faizdog]

I once worked at a medical diagnostics startup where I got a really interesting view into the world of sales. I was the technical individual responsible for training the sales team ( I knew the tech and was good at explaining it in laymans terms). I also went out with them on sales calls. Very different from what my real job was, but I learned a lot about a different world.

In any case, these observations are obviously limited to that particular experience, but I think can generalize.

The sales people had territories. There was also always fighting about what was in which territory, if you had a major cancer center in your area, you had more chance to be successful.

Now a "sale" was when a doctor ordered our medical test. The sales people had commissions on those sales, and the plans changed over the years, but usually there were tiers, 0-X tests, commission is one number, X-Y tests sold, different (I think higher but forget) commission, etc.

Now what does it mean for a test to be sold. Is it simply that the doctor ordered the test and their staff sent in the form to our lab?

We were trying to get reimbursement with insurance companies worked out. What if we didn't get reimbursed on that test? It's a loss for the company, but the sales person sold it, their job is done, reimbursement is a separate departement. What if though the reason we couldn't get reimbursed is because the test is not very useful clinically for the patient, but the doctor ordered anyway because they were friends with the sales person, or she was very pretty? Now it's a potentially bogus sale.

What if it's a legit sale, and clinically valid, but the patient's sample due to some wetlab processing issues can't have our assay run on it, so we don't make money?

What if we get the order form for a "sale" but never the actual specimen? Is it still a sale?

We spent months and years dealing with these and other issues. It was always very complicated, especially since we were a startup in a somewhat new area, so all the rules or "industry standards" were defined.

Again, very specific to our situation, but provides an example of how a "sale" has different definitions, and sales people want their commissions.

For another, say software product, a sales person may sell, but there is a 3 month evaluation window. They could argue hey I got the foot in the door, I did my job. You make a sucky product and the client won't keep it, or our customer reps can't improve service. For the company, that's not a true "sold" product bringing in revenue, but the sales person did the job they had.

At the end, our startup went out of the business, partially due to the fact we spent A LOT of money on sales commissions for orders, some which were invalid or our reimbursement team couldn't get insurance to pay for.

Re:Must?

[Anonymous Coward]

Idk, in IT consulting there are a ton of engineers whom don't understand how budgets work, or business use cases, financials, etc... The sales person sometimes bridges that gap. But I will admit if they can't bridge that gap they are mostly useless other than being a secretary for the engineer.

And this is why I hate salespeople . . .

[Anonymous Coward]

With a vitriolic passion. . . they are often sleazy people often with little to no knowledge of what they are selling and will do anything to make a sale for that commission. Unless I am FORCED to talk to a salesman I bypass them.

Re:And this is why I hate salespeople . . .

[Anonymous Coward]

Salesmen = unskilled enough even for McDonalds.

Greed is King

[crashumbc]

Sales commissions are used to breakdown moral conventions using greed. A person might not be willing to normally lie to a client or sell them some shit they don't need. But once they get used to the bonuses, they'll do anything to keep them coming in.

Re:Greed is King

[Anonymous Coward]

Man this website can be a monoculture of insular motherfuckers blessed with a certitude that borders on the deranged.

The single most effective tactic in selling a SaaS solution (I'm being specific for a reason) is to sell customers something useful which improves their lives and they need. The more they need it and the more it does them good, the more they will buy, the longer they will keep it, and the more money you will make.

Lieing means disappointing people, means churn, means you get ultimately will get fired.
Selling shit they don't need means they don't end up spending real money on upsells later.

Commissions are a carrot and a stick. If your sales team is underperforming or misbehaving then you are managing them improperly and setting the wrong commission plan in front of them.

Re:Greed is King

[Anonymous Coward]

You sound very young.

Apply some common sense: if the product does what the customer needs and wants, and the customer has access to information saying as such. Why do you need salesmen?

Re:Greed is King

[Anonymous Coward]

If you don't pay them commission, they'll work for someone who does. I'm not sure there's a moral breakdown per se, but the job itself and the lack of security definitely makes it select for people who will do anything to get their commission.

Re: Greed is King

[Anonymous Coward]

While true... also simplistic.

The best sales people I build relationships with their clients. They like their clients.

They naturally look at things from their clients point of view.

And there's a third angle as well.

Sales commissions motivate effort. You are not going to get commission sitting in the back room having a cup of coffee. We're hiding in the corner of gossiping and texting on your cell phone with your friends.

Re:Greed is King

[Darinbob]

This depends on the industry and the type of product or service sold. If it's a generic sort of product and the sales person doesn't need to be an expert at it, they'll like more often because they can get another sales job somewhere else. Some of these sales people do a lot of job hopping, and they've got no notions about company loyalty or believing in the product. A specialized sales person, such as medical sales, is less likely to lie because the job market is smaller and continued sales are more important for their commision, and also because the buyer is much more knowledgeable and will spot lies more easily.

Sometimes though lying isn't lying. When a feature is sold that doesn't exist, then you browbeat the development team to add that feature, the CEO or VPs will get into the act trying to get that sale to go through and also insist that the development team put everything on hold to get the feature done.

Sometimes the money is big enough that the bosses get into the lying game too, especially with fudging numbers on the books. I had a former CEO and sales VP and corporate lawyer end up in federal prison. (and the company won an Ignobel award for adapting the mathematical concept of imaginary numbers for use in the business world)

Re:Greed is King

[cbeaudry]

You don't sell when you are not hungry.

I dont want sleazy sales men on my team, but I do want ambitious, hungry human beings who will go out there and hustle.

They are paid on profits though, not revenue. This prevents them from making slimeball deals and hurting the company in the long run.

Depends on the product

[DaveSewhuk]

Commissions are only good for short term goals. They will encourage immediate sales vs better long term sales. Say a project takes 2 years to get going with a 5 year ramp up make 100x over the lifetime of project verses a 1 year short project that makes 1x for two years. The commission guy will pick the short term return vs better long term. Same with the idiot MBA CEOs focusing on next quarter vs the next decade.

Re:Depends on the product

[Daetrin]

I confess that i am not intimately familiar with how commissions and compensation works for sales people, but the sales people i work with seem quite excited when they make long term deals. I'm guessing they either get commission on the entire thing up front or get follow-on commissions each year that the company remains a customer.

They also seem quite interested in how our long term projects are doing. Either they have a professional interest in the projects they sold doing well (and commissions aside, the higher-ups would probably get pissed off at a sales person who got us committed to too many projects that went south) or they're counting on either ongoing commissions or new commissions when the company re-ups.

So in short (hah) if your sales people are more focused on short term profits than long term profits that means you've structured your incentives incorrectly, not that the idea of incentivizing them is wrong

Re:Depends on the product

[Strider-]

Well, yes and no. In a previous job, I was the primary after sales support and training Engineer for the company. The end result is that I built a very strong relationship with a number of our customers. Part of the role of our sales people was to build and maintain those relationships because, well, it's always easier to sell something to a happy, existing customer than it is to build a new relationship. In the industry I was in, the smallest sale we usually made was in the low six figures, and we made fair margin on each sale.

The thing that annoyed me, though, is often I did a significant amount of work to get the sale... Heck, in more than a few occasions, the customer would come to me and say "We've found an extra 400,000 euros in our budget, how should we improve our system?" it always kind of annoyed me that even when I was managing a significant portion of the relationship, and coming up with the ideas, and being that "Trusted Advisor" to the customer, I didn't get a slice of the pie.

Re:Must?

[fustakrakich]

But sales isn't about what's more beneficial to the customer, unless it increases, um, sales...

LinkedIn looks different today

[dstyle5]

I guess MS decided to go with a retro look today, green to represent the commissions part of the story? #slownewsday

Re:LinkedIn looks different today

[cdreimer]

Of course, it's a slow news day. Everyone is watching the Apple press event. Expect a flood of stories after the event.

Re:LinkedIn looks different today

[dstyle5]

Not that slow, J.J. Abrams signed on to direct Episode IX today. I think that is much more relevant to Slashdot's readers than the sales guy commission 101 post.

Re:LinkedIn looks different today

[cdreimer]

Not that slow, J.J. Abrams signed on to direct Episode IX today.

I was hoping the George Lucas would direct Episode IX and have Jar-Jar come out of carbonite to bring balance to the Force. :P

Re:LinkedIn looks different today

[Anonymous Coward]

I was hoping that part of the deal that creimer made with /. management would limit the number of shitposts/amazon spam he could make a day...

Re:LinkedIn looks different today

[cdreimer]

I was hoping that part of the deal that creimer made with /. management would limit the number of shitposts/amazon spam he could make a day...

I was hoping that my merry band of wanker trolls would stop the daily shitposting of my comments. Oh, well. No good deed goes unpunished on Slashdot.

Re:LinkedIn looks different today

[Anonymous Coward]

How did you manage to get a merry band of wanker trolls?

I am sure it isn't your fault, nothing is after all.

I am just curious...

Re:LinkedIn looks different today

[cdreimer]

How did you manage to get a merry band of wanker trolls?

By pwning them, of course.

Re:LinkedIn looks different today

[Anonymous Coward]

This isn't fair! I want a merry band of wanker trolls too!

Will you help me mister cdreimer or is it a copyrighted trade secret?

Re:LinkedIn looks different today

[cdreimer]

This isn't fair! I want a merry band of wanker trolls too!

1) Be fat, happy and successful.
2) Submit stories and comment frequently.
3) Ignore trolling comments whenever possible.
4) ...
5) Profit!

Re:LinkedIn looks different today

[Anonymous Coward]

1) Be fat, happy and successful.

You failed your own step 1. You got the fat part down, but you're obviously a miserable loser.

2) Submit stories and comment frequently

Your submissions are terrible. Your comments are obnoxious linkspam and off-topic navel gazing. Those details are important if you're going to give somebody advice on how to attract trolls.

3) Ignore trolling comments whenever possible.

By 'whenever' you mean, never? You were stupid enough to engage with your trolls *constantly* for 6 fucking months. And you're *STILL* doing it despite your advice to ignore them.

4) ...

That ellipsis is you, creimer, in a nutshell: confusion, ignorance, and a profound inability to understand anything, all rolled into one fat, smelly package.

5) Profit!

Your failure at the earlier steps of your plan explain why you haven't yet profited, and are "adjusting your budget" to account for the dramatic shortfall between your food budget and your actual income. Guess that coffee money wasn't adding up so well, eh, puff pastry?

Re:LinkedIn looks different today

[Anonymous Coward]

you sound bitter, butter tits

Re:LinkedIn looks different today

[Anonymous Coward]

Jesus, what exactly happened six months ago? creimer was here for years before, after all. Did he do something especially obnoxious or offputting?

Re:LinkedIn looks different today

[cdreimer]

Jesus, what exactly happened six months ago?

An asshat falsely accused me of threatening to shoot him in a political discussion and things rapidly escalated from there.

creimer was here for years before, after all.

I wrote ~8,000 comments in ten years.

Did he do something especially obnoxious or offputting?

I wrote ~4,000 comments this year.

Re:LinkedIn looks different today

[Anonymous Coward]

Who gave you that list, and when are you planning on starting?
PS: When is your amazing book "Unemployable" coming out? Will it also contain your masterful haikus?

https://www.cdreimer.com/ebooks/poetry/unemployablehaikuotherpoems.html

Will it also contain your amazing grammar like "more angrier" from your nauseating

https://www.kobo.com/us/en/ebook/a-misplaced-stick-short-story

???

Re:LinkedIn looks different today

[Anonymous Coward]

you sound bitter, puffy tits

Re:LinkedIn looks different today

[Anonymous Coward]

successful.
You are morbidly obese virgin who lives in a studio apartment, recently declared bankruptcy, and is still in debt. You are approaching retirement age with no real savings or support network or real estate or retirement package, meaning it's extremely likely you will be sleeping on the street once you can't work anymore. You brag about earning $3/day from spamming.

3) Ignore trolling comments whenever possible.
You reply to dozens of comments a day.

Re:LinkedIn looks different today

[Anonymous Coward]

you sound bitter, pastry tits

Re:LinkedIn looks different today

[Anonymous Coward]

No, creimer - just hugely amused by your inability to proclaim yourself a success, even when you define the criteria for success.

Re:LinkedIn looks different today

[Anonymous Coward]

creimer is nevermore, get over your bitterness

Re:LinkedIn looks different today

[Anonymous Coward]

An asshat falsely accused me of threatening to shoot him in a political discussion and things rapidly escalated from there.

You claimed you would "exercise your 2nd amendment rights." Claiming that that statement doesn't imply a promise to use the weapon you're carrying is a little silly. But okay, for posterity:

How, exactly, are your 2nd amendment rights related to the discussion you were having about Planned Parenthood, or the AC's advice that you should "just shut the fuck up," if there is not an implied threat to *use* the gun you're carrying?

If you weren't implying that you'd use your weapon, then your response that you would "carry a gun!" was completely irrelevant nonsensical word salad. You might as well have shouted, "I'm going to eat a push pop!"

I wrote ~4,000 comments this year.

And those comments were obnoxious, off-topic, and included vast amounts of link spam trying to funnel a few extra pennies into your empty piggy bank.

Re:LinkedIn looks different today

[Anonymous Coward]

Do I? What about?

Re:LinkedIn looks different today

[Anonymous Coward]

So you "pwn" (nice language for a middle-aged man nearing retirement, dude) your trolls, but why did Slashdot management change your account name?

Re:LinkedIn looks different today

[Anonymous Coward]

Simple!

1) Be an out-of-shape wanker with a dead-end career, barely surviving
2) Constantly ramble on about personal anecdotes and horrific family stories that would make Nova Scotian inbreds blush
3) Respond to every trolling comment at every hour of the day on your boss' dime
4) Keep doing it!
5) You're a loser!

Re:LinkedIn looks different today

[Anonymous Coward]

Indeed it will! From the freely available sample:

"Your uncle disappearing into the forest with a bucket of lard concerns me a great deal," Grandpa Davis said, stopping on the trail in the forested mountains of Morgan Hill, California, to light up a cigarette. "He might already be dead."
"Dead," Little Billy said, unperturbed by the news. The rifle he held was longer than he was taller, with the shooting end pointed to the ground and the butt riding on his shoulder as his grandfather instructed him. "How can Uncle Jack be dead?"
"What do you know about the birds and the bees?"

"longer than he was taller"
"the shooting end" - did you mean the "barrel"?
Ridiculous non-sequiturs
Run-on sentences
"as his grandfather instructed him" - is he instructing him at the moment this action is occurring? Or did you mean, "as his grandfather had instructed him?" Or perhaps you meant to write, "as his grandfather had taught him," which is clearer, less stilted, and far more direct?

And that license notice: "Thank you for respecting the hard work of this author."

Hard work?! What a hoot!

Re:LinkedIn looks different today

[Anonymous Coward]

Also, the syndrome creimer suffers from doesn't get better as somebody gets older.

-ng

Re:LinkedIn looks different today

[Anonymous Coward]

Autism? OCD? Schizoaffective disorder? Borderline Personality Disorder?

Re:LinkedIn looks different today

[Anonymous Coward]

"An asshat falsely accused me of ..."

With the syndrome you suffer from, you have no idea how to differentiate the truth from the false.

You are best at things like keeping track of every penny in your pockets and making sure the IT closet is clean.

Re:LinkedIn looks different today

[Anonymous Coward]

Christopher, my love,

I am deeply sorry. I didn't feel well lately but I am better now.
I am sorry that I called you all sorts of names on /. and I feel
truly ashame of myself.

The python click script you wrote for me my sweet love for my
pheromone revenue stream web site suddently stopped to work.

Could you come visit me in my studio so we could look at it?

Signed:
Your sweetee who will love you for ever.

Re:LinkedIn looks different today

[Anonymous Coward]

My poor sugar pie,

Now I understand what you have been through and I say I am truly sorry again. I am willing to go to court anytime to witness that you would never shoot anybody.

I could go get you at work around noon and we could go have lunch at the Cafe Latte near by where we went last week and tonight we could have a look at that python click script you wrote for me my sweet love for my pheromone revenue stream web site.

I love you Christopher,

Another option is to build a quasi-religion.

[Anonymous Coward]

Another option when it comes to generating hype, but without really paying anyone much, is to build a quasi-religion around a product. This is often a good option when a product is mediocre.

Two examples I can think of are the git version control system and the Rust programming language.

Git is a pretty unremarkable VCS. In fact, it downright sucks in many ways. Anyone who has used Mercurial or Bazaar will know how inferior git is compared to them. But the main advantage git has going for it is the quasi-religious like following it has. There are fanatics who worship it, regardless of how flawed it is. They're so closed-minded that they can't even conceive of trying any other VCS. What's the end result? A lot of software development teams are forced to endure a pretty bad VCS just because a small number of loud fanatics treat git religiously and will fight to the ends of the Earth to get their way and use it for everything.

Rust is another example. In my opinion it's a convoluted, painful programming language that makes C++ simple to understand and use by comparison. Yet Rust has developed a very fanatical community. They don't see Rust as just another tool in their programming language toolbox. No. Rust has become more like a lifestyle and a religion to its followers than just a tool. Just look at how its adherents respond to legitimate criticism of Rust at online discussion forums like Hacker News and Reddit. They respond with forceful downvoting attacks. They typically refuse to even discuss the language's pitfalls and problems, instead resorting to various types of censorship. That's why Rust can seem more like a religion than a programming language.

In both examples we see the adherents of the quasi-religions that have built up around these products act as a marketing team of sorts, working for free. Now it might not be high quality marketing, but their loud and constant preaching of these products does generate a lot of hype, which can get the attention of managers and others who might not be able to see through the nonsense.

Re:Another option is to build a quasi-religion.

[Anonymous Coward]

For such bedrock things as the compiler, make, and vcs, I want a few things that mercurial doesn't have and git does: On Unix(oids) that means written in C, no other dependencies (the openssl dependency is annoying), and good manpages. I liked CVS (and still use RCS for some things) but I refuse to work with even SVN if I possibly can exactly because no manpages. It's been ages but mercurial fails on at least one of these points.

Anyway, the value of a vcs is not so much its feature set, it's the basic presence of the thing. Since you have to have git to join in on the linux "ecosystem", it's what you have to know the most basic commands for. Since that's all most anyone ever uses anyway, that subset is the mind-set and so git wins in sheer presence. (And then there's "github", where a commercial entity sits on a large centralised distribution point in a designed-as-decentralised system. People actually believe you have to have an account there to use git. *sigh*)

One thing that told me this was seeing people signing-off on their own commits. You don't do that, you only sign-off when you're putting stuff into the repository that doesn't have your name up top. As in you have a commit bit and the patch-submitter doesn't, or you reviewed something for a fellow committer. Why add that line on your own commits? Your name is already on it, you silly. So they weren't thinking, but running in monkey-see-monkey-do mode. It happens quite often in computing.

Sort-of similar to shmucks not even taking the time to understand that Makefiles are declarative, not imperative, and so you see a lot of extremely poorly done Makefiles around. Maybe that's why "better replacements" that fail to be better are so popular. Add another layer up top, decorate the output like a christmas tree, and you have a winner!

That's cmake, which is objectively worse than automake despite automake being a crufty heap of arcane cruft. The difference is that cmake is shiny! and new! but entirely the wrong approach, where automake has the right idea but crufted-over execution. automake is actually fixable and carries a much lighter footprint for distribution of user code, cmake isn't and doesn't. Yet cmake has the mindshare at the moment, because very few actually understand what it's supposed to do for them, and moreover, for their users. Not a problem if you're your own and only user, lots of problem if your code is in wide use.

Regarding languages, rust 1) depends on LLVM (written in C++) and 2) is effectively unbootstrappable due to signing and the compiler source having moved on well beyond what the written-in-C proto-compiler can handle. That alone is enough reason to never bother with the thing. And the community is SJW-toxic, so it's best to stay away before you "transgress" and get tossed out anyway.

Now, since talking community, compare PHP, especially the description of the mindset in "A Fractal Of Bad Design". Come to think of it, python also has a quasi-religious following ("is it more Pythonic to foo or to baz?") though with a different flavour to it. They're not SJW-toxic, which is nice, but PHP's community isn't conductive to good code, and python's tries so hard they're trying to commit suicide the perl 6 way.

Anyhow, you're right on the religious angle. Failed SF writer L. Ron Hubbard did quite well, financially.

Re:Must?

[Anonymous Coward]

Well, I am. a condom manufacturer. It kinda goes with the territory, but thanks, all the same.

Re:whipslash, can you please replace msmash?

[Anonymous Coward]

irrelevant managerial gibberish

I'm glad I wasn't the only one who had trouble parsing the summary and went to the comments to see if I missed something. I'm too lazy to bother with the Firehose but is a Marketing 101 discussion topic really the best there was?

sales people suck

[Anonymous Coward]

Pushy sales people are why I buy everything on Amazon. I hate having to go to someone who knows less about what I want than I do, and then having to deal with them being a complete ass.

"I hate to pay you more becuase you are the best.

[Anonymous Coward]

I really wanted to pay you less for more effort and reward the slackers for doing nothing." My boss actually told me this when I demanded to be paid on commission. I was outraged! Who did he think he was denying my request? I went over his head directly to the CEO, who I called. We're great buddies. When I told question mark what I told my boss, he fired him and now I work in a high stakes competitive environment!

Re:Must?

[dclydew]

In the organization I work for, sales are also responsible for a lot. Dealing with contract negotiations and making sure that pre-sales and post-sales are correlated. After that, they are responsible for keeping up with the customer to find new potential uses, catch dissatisfaction before it occurs, get feedback from the customer on new requirements or feature requests....

Re:Must?

[DiSKiLLeR]

Exactly this. Sales people aren't needed. Sales people are the scum of the earth.

What?

[Daetrin]

#1 For people who are confused, i'm pretty sure this is referring to corporate sales where they're trying to convince another corporation to buy their company's product instead of a competing company's product, which is in fact an important job. Not the salespeople at retail stores trying to convince individuals to buy an appliance or get the extended warranty, who can suck it.

#2 I'm usually pretty lenient about such things, but why is this on slashdot? It doesn't seem to have any direct connection to tech and it doesn't really see like something that matters to anyone outside of boardrooms or sales rooms.

Just Remember

[boudie2]

A-B-C. Always be closing.

Why is This on Slashdot?

[Anonymous Coward]

How is this related to the tech community at all?

Getting paid for being good at your job

[Anonymous Coward]

Most jobs give zero benefits for being good at what you do. Lousy or amazing, your monthly paycheck is identical.

“Peter Gibbons: The thing is, Bob, it's not that I'm lazy, it's that I just don't care.
Bob Porter: Don't... don't care?
Peter Gibbons: It's a problem of motivation, all right? Now if I work my ass off and Initech ships a few extra units, I don't see another dime; so where's the motivation? And here's something else, Bob: I have eight different bosses right now.
Bob Slydell: I beg your pardon?
Peter Gibbons: Eight bosses.
Bob Slydell: Eight?
Peter Gibbons: Eight, Bob. So that means that when I make a mistake, I have eight different people coming by to tell me about it. That's my only real motivation is not to be hassled; that, and the fear of losing my job. But you know, Bob, that will only make someone work just hard enough not to get fired. ”

Re:Getting paid for being good at your job

[aktw]

As a business owner, I've found that most people consider themselves good at what they do -- even if they're not. It's sort of like driving; everyone thinks they are a good driver, and complains about the other drivers around them not using blinkers or going too slow/fast or checking their cell at a light, etc.. Anyway, I don't think that commissions or metrics-based incentives are a great answer for most companies, but I do think we need to adjust this whole "pay me more" attitude that people have in regards to wanting extra incentives for just doing their job. If that's what someone wants, then they need to go start their own business.

Re:Must?

[PCM2]

So you subscribe to the 'if you build it, they will come' philosophy? Good luck with that.

You're confusing sales with marketing.

salesmen...

[Anonymous Coward]

I used to work at a public company run by a salesman (founder retired, sales VP took over). I was in sales. It was great. The only time I worked was the last 2 weeks of the quarter. They had a large chunk of recurring revenue, but that didn't matter. Sales was the only place they could juice their numbers to hit quarterly targets. (the quarterly targets were retarded but that's a separate issue). If a $5 million sales is the difference between meeting quarterly numbers or not, those are your balls in my hand.

I made my money and got out, so I'll tell you - the entire thing is a crock. You're paying out sized bonuses to people eating your seed corn. If they dialed back on the bullshit wall street targets, it wouldn't be necessary.

Why dont we ask sales

[Anonymous Coward]

how to do your IT job.

Re: Must?

[Anonymous Coward]

in a desert, ice cubes sell themselves. hire stellar engineers, and you won't need salespeople.

Re:Even a "Sale" means different things, complicat

[Anonymous Coward]

We had a similar issue with some billing software (old old company) and the sales people would down right screw the company for commission. It took too many losses before someone stepped in to review the contracts they were dreaming up. Hell, in the end, sales people were making hand shake deals for extra features. This flat out enraged the director who was trying to reign in all their shitty practices. In the end, unchecked sales fucked the company and literally killed it.

Bottom line is that commission is valuable, but someone who has a financial stake in the company must provide oversight. When these things go astray that system is usually not in place.

This is a great example of why I avoid salespeople

[JohnFen]

This salesdouche says "Prizes and competition are critical to building a healthy sales culture."

If "building a healthy sales culture" means "encourage salespeople to treat the customer as a mark" (as commissions tend to do), then I vote for an unhealthy sales culture.

Re:Even a "Sale" means different things, complicat

[Anonymous Coward]

Sales are when people give you money for the product. You didn't need the salesmen talking to doctors. You needed them talking to and shmoozing the insurance companies to convince them to pay.

Do consumers need sales people?

[OrangeTide]

Wouldn't I be better off making purchasing decisions in a low-pressure and high-information environment like the Internet? My grocery store does fine without having to have a sales person follow me around and convince me to buy oranges or maple syrup.

Having a sales person does make a business a lot more money, which is why they do it. But as a consumer I need them about as much as I need mosquitoes in the ecosystem. (which is to say, easily replaced and non-vital)

Re:Do consumers need sales people?

[Anonymous Coward]

If you're ignorant about a particular product, a salesperson can help you make the right decision. Not every consumer is capable of drilling down the gory details through internet searching to make an informed decision. An experienced salesman may know which product suits your needs based on his experience with other buyers.

However, if you don't need them (salespersons), they can be annoying.

Re:Must?

[Anonymous Coward]

Really? Why?
Maybe you don't work with sales people. Maybe you just think sales people are like everyone else only with sales tacked on.

You are wrong.

I work with about twenty sales people in the print industry and I wouldn't trust any of them to mail a utility bill for me. Sales acts like a filter for psychosis and only the sick ones remain working. everyone who wants to be ethical heads for the doors sooner or later.

Why is this? I think it's because salespeople are judged mostly on how much money they bring to the firm. Sales guy A is better than Sales gal B because he brings in more money. But that measurement is, believe it or not, subjective and sales people are lying, manipulative bastards. I know one salesman who continually held back reports on some of his sales each until the very last HOUR he could just so the rest of the team would think he was doing worse than he was. Then, at the last moment, he'd spring a couple hundred thousand in contracts and look like the best guy in the shop. He was made the VP of sales for Christ sakes because his numbers were always so much better than everyone else's. Did the others complain? You bet. Did they copy him? Yes.

All's fair in love and sales.

Please don't start with commissions. Sales people should be paid a freaking salary like anyone else. I know for a fact that every one of the sales people in my corporation get a commission on their sales and that every one will negotiate with customers for the highest possible contract amount with the promise that it will never come to that much. The sales person collects commission on the submitted contract, the production plant gets screwed because the sales person helps the client dispute every charge, and the client walks away with a half priced job. Everyone is happy with the exception of the corporation because they can't figure out why the production plants can't meet the estimated costs of production.

Commissioned sales is killing my company.

So, maybe you don't work with sales people. That's okay. I wish I didn't. It would be a nice break from working with Satan's Own Boys Team.

Re:Even a "Sale" means different things, complicat

[Kierthos]

I work for a company where, going by scuttlebutt (I'm not in sales), the sales commission structure and policy has changed multiple times over the last few years.

At one point, it was apparently "each sale earns commission" and the sales department was broken into teams, where there would also be a team bonus for most sales.

Now, because of the nature of the product, I think it's something like "the customer still has to have an account six months after the sale" to count as a valid commission. And there's no teams any more, so it's very cutthroat over in sales.

Wrong thinking

[Anonymous Coward]

An army of commission salesmen cost very little. There is a Darwinian filtration that goes on. (If applicable) Most salespeople sell to their friends and family for a while then burn out. Most sales people won't ever be great. The plan is to find the salesperson outliers who sell way more, by having a high intake and fast training. Add a mutli-level component and you have a salesperson explosion of salespeople selling sales to other salespeople.....

Re:Must?

[NEDHead]

One must know the difference between 'Sales' and 'Marketing'

"Heathy Sales Culture"?

[idontgno]

I've got your "healthy sales culture" right here. Quantified. Metrics-based. Competitive. The textbook case!

Maybe we can compete to sell the anonymous submitter a fire to die in.

Re:"Heathy Sales Culture"?

[trawg]

Every sales commission process should be put in front of a bunch of 15yo video gamers to see how they would game the process to their benefit before it is deployed in the real world.

Re:"Heathy Sales Culture"?

[slavdude]

I believe there was documentary about this kind of thing a while ago. /snark

Re:Must?

[shaitand]

Most sales people do. They don't hit the pavement and generate sales they expect people to come to them when they are interested in what they are selling. The getting people interested part is driven by marketing/advertising/engineers these days and not sales.

Compare a salesman to a pick-up artist who is selling wing man services on one night stands with a celeb. What you are sold on is the idea he is a smooth artist walking into a bar and finding the hottest girls convincing them to ditch the husband they came with and go to the hotel with them instead. What really happens is he goes about his day drinking and cavorting while he carries a phone with the professionally designed tinder profile of the guy he works for loaded he does the swiping on the app, although in some organizations they have people to carry around the phone and swipe for them as well. When a girl swipes right he arranges the location and time for the boss and he goes and gets a couple drinks in her to be sure and takes a blowjob from the girl as a commission and then the boss bangs the girl. Oh, and of course the boss pays for all the drinking and cavorting as well.

Now, as the boss, is the whole process getting you laid more? Of course it is. Is there value in what he's doing? Sure, even though the girl already indicated shes down for a hookup many of them would back out. If he's "good" then his warm-up probably means the deal gets closed more. Does the blowjob give him incentive? Obviously, and the hotter the girl the more motivated he'll be.

So here is the question, How many deals are lost because the girl doesn't like him? Also, that blowjob commission, either you are giving up a blowjob or you are trying to get the girl to give an extra blowjob. A blowjob is a substantial sexual favor. The first question is, does he actually bring enough value with his lubrication efforts to make up for the girls who would follow through if not for the mandatory blowjob especially considering the parts your professionally created celeb profile and assistant are playing in bringing warm leads already? Especially when you consider that these "wingmen" are going to compete to work for the celebs whose profiles bring in the highest quantity of warmest leads so they can get the most blowjobs from the hottest girls. Could you get someone to play his part and provide an incentive far less valuable than blowjobs from hot girls? Couldn't you just pay him a variable salary based on performance? It could range from what that assistant makes to double what that assistant makes.

When are you going to accept APK?

[Anonymous Coward]

When are you going to accept APK into your organization? He really needs the help too.

Re:When are you going to accept APK?

[Anonymous Coward]

Does he live in the Santa Clara County?

It is a requirement to get services from us as Christopher does.

-Nancy Guerrero

a good sales engineer is invaluable

[k6mfw]

I've not dealt with sales engineers lately, I use this term for sales people that deal primarily with technical products for technical people. I'm thinking back in the days before internet there were some sales engineers that were very helpful, i.e. Jim from HP (back when HP was HP) on instrumentation controllers and he kept me informed of what products will work for me and which ones will not be applicable. At times I wonder how he ever made a profit but then when purchases are made, however, a lot of money was exchanged after a purchase so whatever time Jim spent on the phone, onsite visits, demo of gear, tutoring of use, mailing tech manuals all paid off. That HP gear in the days with Bill and David were with the company was not cheap but it was indestructible.

There were other sales engineers I became more involved with in engineering societies. I learned from them, I'm thinking of Lou Gado (now passed away) on measurement systems and connected me with other product people. These people helped be learn practical application of thermocouples and RTDs. Lots of interesting stories from Lou (he got his start in the Marines during WWII working on radar). So when I need to make purchases, I have their contact info and were the first ones I go to and this saved me lots of time.

Re:a good sales engineer is invaluable

[Anonymous Coward]

I use this term for sales people that deal primarily with technical products for technical people

In that case, you are using the term "sales engineer" incorrectly. Sales engineers are not "sales people that deal primarily with technical products for technical people." A sales engineer is the technical expert on the sales team, which makes him or her a very different beast from an account executive, with whom he or she works.

This is better explained here:
https://professionalsalesengineer.com/2011/09/20/what-do-you-do/

More germane to this discussion, sales engineers are not paid in the same manner as our account executive counterparts. Typically, an SE has a higher base pay (higher relative to his overall pay), less variable pay and much less risk. Account executives get fired when deals do not close; SEs typically do not unless they personally botched the deal, which is rare. Also, in most software companies with a medium to large sales organization, the SE's comp is not directly tied to individual deals; it's more often tied to a regional or national number, which encourages team collaboration and smooths out the variations in terrritory health.

You see... a sales engineer is a very specific thing... and not the thing you described in your post.

Re:Must?

[rickb928]

Which manufacturer?

And, there ya go. Competition.

Re:Must?

[rickb928]

"Most sales people do. They don't hit the pavement and generate sales they expect people to come to them when they are interested in what they are selling. The getting people interested part is driven by marketing/advertising/engineers these days and not sales."

A corollary to this is the adage that the salesperson has to ask five times to get the sale.

Most stop at three.

Re:This is a great example of why I avoid salespeo

[Anonymous Coward]

Avoiding salespeople is probably a great reason for why your comment is so ignorant.

Re:Must?

[war4peace]

I would like to subscribe to your newsletter.

Re:Must?

[Anonymous Coward]

So you subscribe to the 'if you build it, they will come' philosophy? Good luck with that.

If you build it, and advertise it using all the communication media available today, then, yes, they will come. There simply is no need for the conventional "salesman" any more. And that's a good thing.

When someone's paycheck depends on making a sale it creates a culture of dishonesty. The salesman will tell you any lie that he thinks will get you to buy his product. Even if he is normally a very honest person, the pressure of needing to make the sale in order to make a living just becomes too great, and even the most honest person eventually gives in to the temptation to lie in order to make the sale.

Best buy had non Commission / Commission system

[Joe_Dragon]

Best buy had non Commission / Commission system.

As in you get hourly but if you want good hours you need to up sell ripoffs.

circuit city was Commission and then they fired all of the good sales people and replaced them with lower prided ones and sales went down.

Re:Must?

[Khyber]

"So you subscribe to the 'if you build it, they will come' philosophy? Good luck with that."

That's how most products have worked, historically.

You don't have to....

[mark-t]

You can pay them a salary, or a wage at your option... the only requirement being that it is an amount compliant with local minimum wage laws.

You incentivize the employees to sell as hard as they can in such a case with non-monetary perks for each month, such as the right to pick their own shifts for the upcoming month.

Obviously, employees that fail to sell well enough to justify the expense of paying them are terminated.

Re:You don't have to....

[mark-t]

Dangit... I really wish slashdot had an edit button for at least a minute or two after posting. I meant to suggest that such a perk would be for the top seller each month.

Re:Must?

[ravenshrike]

It wouldn't exactly be difficult to implement a system to stop that though(I can think of three systems off the top of my head), so all it really shows is that the people on top are fugging morons.

Re: Must?

[liquid_schwartz]

Not if nobody is aware that the ice cubes are there. Sales serves more of a role than they get credit for in most cases.

Re:Must?

[Anonymous Coward]

And? You say that as if it isn't the absolute truth at EVERY company RUN BY SALES PEOPLE. ... and THAT'S what is wrong with sales.

Re: Must?

[Anonymous Coward]

You are confusing sales with marketing.

Re:Must?

[Anonymous Coward]

I used to say stuff like this too, until I got my last place. The real estate agent actually added value. I ended up buying a place I hadn't even considered. I've been here 3 years and I'm happy with it. Things look totally different on street view, and the MLS contains information that's not clear. For example, "private water" made me think it was well water or a micro-system that's a PiTA. Turns out our water is actually decent and cheap because it's a fairly large co-op that's technically private but operates with the scale of a decent-sized public utility. I might have eventually figured this out--but by then the deal would have been gone.

Cain't bullshit a bullshitter

[Anonymous Coward]

Cain't bullshit a bullshitter

We didn't commission. It was good.

[Derkec]

In the enterprise software business all sales people are commissioned. Except for the ones we had at my last employer. We recognized that sales is hard, competitive and requires special work. At the same time, the key element that wins a deal might be a developer working all night to sneak a feature into a demo or build a new demo environment.

So why do you pay the sales guy a huge commission check for doing his part and the developer her normal salary if the developer was the one with the heroic effort?

You're best off paying everyone a fair salary and chipping in some bonuses and team celebrations to capture heroics.

Re:We didn't commission. It was good.

[Anonymous Coward]

In the enterprise software business all sales people are commissioned. Except for the ones we had at my last employer. We recognized that sales is hard, competitive and requires special work. At the same time, the key element that wins a deal might be a developer working all night to sneak a feature into a demo or build a new demo environment.

So why do you pay the sales guy a huge commission check for doing his part and the developer her normal salary if the developer was the one with the heroic effort?

You're best off paying everyone a fair salary and chipping in some bonuses and team celebrations to capture heroics.

Over the years, I've worked engineering support for many sales teams. I've gotten a bonus/giftcard etc from every company I worked at, directly from those sales teams. Still, they are rare enough that I can remember each one, and none of them would have covered even two hours of a tradesman's overtime.

Traditional sales is done.

[ErichTheRed]

If a company is capable of simplifying their product lines enough and delivering a clear advertising, then the traditional sales position is dead. I can't stand talking to salespeople, especially tech salespeople, so that would be a huge positive for me. I've never bought anything based on the recommendation of a salesperson, and don't know people who have. In IT however, CIOs tend to be extremely gullible when it comes to software and hardware sales pitches. It has something to do with all the free dinners and strip club visits, I'm sure.

An interesting example of this hit me when I was attending a tech conference in a big traditional convention center a couple months back. Those convention centers and the conferences themselves are still set up for a previous era, where the only time vendors got new orders was at the annual trade show. I could almost see the lines of eager junior salespeople in identical suits outside the now-dead onsite Kinko's location lining up to fax their orders to HQ. Now, people just order online for all but the most complex products.

Re: Must?

[Anonymous Coward]

+1 on that observation

Because we live in an economic system where

[Anonymous Coward]

you can't just let a market go down a little and have that be perfectly ok and natural.

Racketeering

[Anonymous Coward]

Sales is racketeering plain and simple: an artificial situation that need not exist at all, which costs people more money than necessary and gets them to buy things based on factors besides quality, value.

Having said that, I hope my employer has better salespeople than our competition.

Re:Must?

[Anonymous Coward]

Maybe not all of them, but the incentive structure certainly encourages the scum to rise there. So on a scale of 1 to lawyers/real estate/used car sales people, where do tech sales people tend to fall?

because

[Anonymous Coward]

otherwise no one would lie through their teeth to attempt to sell you a inferior shitty product. then manufacturers would actually have to do something like improve their product or quality control in order to sell more than the other guys.

Re:Must?

[HornWumpus]

Accrued commissions. They only collect as the money is collected from the client.

Alternatively: Chargebacks, but accruals are simpler.

My advice to you: Find a new job. That one will never change. They want you to believe 'it's like this everywhere', don't believe them. I regret waiting so long to bail from a similar situation, many years ago. There is no better time than NOW.

WRONG!

[Anonymous Coward]

They do not earn that profit. Every employee in the company earns that profit. The guy in purchasing who finds a way to cut widget cost by a dollar earns that profit. The girl in engineering who makes the widget better earns that profit. The poor soul in support who deals with the angry customers who have discovered that the widget doesn't do half the shit that the salesman promised it would, earns that profit.

The only thing that the salesman does is get the customer to sign the dotted line, and half the time he does so at the cost of profits; by making promises that cannot be kept or by introducing incentives that discount the price, sometimes below cost. He's paid x% commission on the sales price and really doesn't give a shit whether that price is profitable or not. In fact, in start-ups revenue growth is often all that matters and no profit is ever made.

Customers are important, and getting them to buy is important too. But don't give me that bullshit that sales people are earning profit.

Re: Must?

[networkBoy]

That's more Marketing than sales...

Related beasts to be sure.

Over the years...

[erp_consultant]

I have developed a healthy distain for sales people of all shapes and sizes. On the rare occasion where I have met an honest one they rarely last very long. From my viewpoint, the sales subculture is little more than a snake pit. Tell the customer whatever you think they want to hear, whether it is true or not, and make the sale. Get them to sign on the line that is dotted.

After the sale is made they are gone.

Two industries where sale people provide no value whatsoever is cars and homes. Both have legal protections so help keep things the way they are. Car dealers have exclusive arrangements with car manufacturers. Just as Tesla about all the BS they have had to go through trying to break up that tidy little relationship.

Real estate agents have the MLS (or Monopoly Listing System as I like to refer to is as) to hide behind.

It is the classic middle man ploy where the middleman provides no real benefit other than access to the person that has the goods. And in return they get a piece of the action. Now if this person is providing actual value to the transaction then I have no problem paying them for that service but in the case of cars and homes I see them providing little if any value.

Why can't I just go to Ford's website and pick the car and options I want and have them ship it to me? Why can't I just find a house I like - using Zillow or similar tool - contact the seller and agree on a price? Let a lawyer draw up the paper work and call it a day. No middleman needed or wanted.

6% commission for some bimbo to unlock the door and tell me where the kitchen is and the backyard? That's 18K on a 300K house. No thanks. Now granted, the seller pays the commission but it just gets passed on to the buyer in the form of a higher price.

Car salespeople are even worse. In my entire life I have met exactly one honest car salesman. He sold me the car I am still driving today. A few years ago I thought about trading it in but when I found out he was gone I decided just to hang on it.

The bad points

[Anonymous Coward]

... You Pay Sales People Commissions?/quote

Think of the advantages:
- no sales means no wage costs
- commissions don't have to be paid until the sale terms are complete and legally binding
- big bonuses make sales staff burn-out trying to achieve said bonus
- the boss can't reduce the hourly wage but he can reduce the commission rate anytime
- some industries make sales staff pay for consumables in lost sales
- some industries make sales staff pay travel costs: Distant territories are unprofitable

Then there's the sales staff I met:
A highly social person has been stuck in a car for 4 hours then lands in my office, lonely and stir-crazy. For me it's work-time, not play-time because he spent the morning with no-one to talk to.

Re: Must?

[Darinbob]

But now you've got 10 different companies offering ice cubes of various kinds. Marketing tells you that ice cubes exist, and maybe lets you know that 5 of those companies are the ones to pay attention to - if you want an ice cube. The sales people are the ones that tell you that yes you want an ice cube, and that you most definitely want an ice cube with a particular company, and the various ice cube options that you can get with it. You may see a marketing person at a ice cube show that you probably won't attend, and you may see marketing literature online, but the sales person will come straight to you desk and demonstrate how nice that ice cube is.

Re: Must?

[Anonymous Coward]

I on the other hand am condom tester.... specializing in ... um ... durability.. so I think I win this 1...

Re:Must?

[cbeaudry]

The problem here is not the salespeople but your companies compensation plan.

Commission should be paid on margin, not on revenue. Thats just bonkers.

Re:Even a "Sale" means different things, complicat

[cbeaudry]

I never understood compensation plans that did not take into account profit.

Sales commission should be based on profit after expenses.

That takes care of all the problems mentioned above.

Sell a product or project at 35% margin, but turns out at the end to have only generated 22% margin, then your commission is a % of the end profit, not the sales revenue.

Re:Must?

[Anonymous Coward]

The "being rewarded for deceitful practices" culture of Sales Departments definitely attracts and promotes the worst of humanity. Unfortunately, Sales is the engine that drives the company, as that is where the money enters the system.

There are lots of better ways to do this, from a moral standpoint, but investors don't give a crap about morals, or right or wrong. They just want a return on their investment, and the dishonest salesman will put the honest salesman out of business every time.

Perspective of an SME

[bradley13]

I ran a small software company for a few years, before deciding that I actually hated networking, dealing with customers, etc.. I tried to oursource our sales a couple of times.

It's absolutely amazing how many marketing companies want to charge you a flat fee. For what, exactly? With a flat fee, they would earn just as much sitting on their backsides, as they would actually selling product.
All but one of those companies lost interest, when I stated that compensation would be performance-based.

It may (but only may) be different with in-house sales. For external sales, I commissions (or some other form of performance-based compensation) ensure that the goals of the two organizations are aligned.

Re: Must?

[Anonymous Coward]

Wow!! Durability testing, huh?

Ever get lockjaw?

because fuck Amerika, that's why

[Anonymous Coward]

1./ tips
they dont get living wage, not my problem. problem between waitress and restaurant owner. I am not the welfare bucket to make up the difference.

add in millennial snowflakes expect Expect EXPECT ... and fuck you, that's why.

when I get a tip in the real job, instead of fuck you lucite block, maybe I give tip too. no holding breathe, never will it happen.

so, fuck Amerika expected tips right up your self-entitled diseased bullshit corrupt asses.

2./ commission/vig
also, no commission retail is fuck you costumer, because fuck you thousand more costumers behind you in the iApple store and everywhere else: rape your wallets and GTFO. and commission, for what, they are so fucking stupid why trust their "advice" it's all lazy pigfuckers who can only be clerks anyway.

Re:Must?

[ahadsell]

This is my experience, too. The salesperson is the consistent presence in the cycle, understands the customer's needs, and interprets them to the team that will wind up fulfilling the contract.

There is a huge difference in the job of the salesperson at Best Buy, selling consumer products by the millions, and an engineering company, selling one-off systems to other companies. In the latter case, the salesperson earns his commission. In the former case maybe not so much.