Sales Commissions: Does it help the Buyer?

money

 

By Christine Armstrong, Communications Strategist

The most popular model by far for compensating sales teams is via a commission-based sales structure.  The theory behind commissions was based on the premise that somebody would work harder to satisfy the needs of the buyer and would be rewarded by their company for that extra hard work on behalf of the customer.  It all made sense and everybody wins.  And the best part was commissions were just assumed, but not talked about, making it all quite convenient and entirely comfortable.

 What might have changed?

 

Informed Decision Making:

By far the biggest change for Tech Sales has been the easy and readily available access to information.  Buyers work extremely hard to make informed decisions by evaluating the available technologies, and often even pre-selecting their technologies before a vendor sales team becomes involved.

Team Environments: 

Technology purchase decisions require input from many sources within both the buyer and vendor extended teams.  The more experience, knowledge and attention to detail that a team can pull together, the more successful the implementation and customer satisfaction.

If vendors listen hard enough, and contribute enough value through understanding not only business requirements but also business operations and bring technological experience to the table, they become an extension of the client team with one common goal.

 

And this is where things get trickier in a commissioned sales model . . . and very uncomfortable.

 

Now, buyers are skeptical when they get the sense that somebody is “on commission” and starts to row in a direction away from the common goal to what might be their personal goal.

That’s not always the case, but asking questions about commissions up front can help buyers perceive what can influence vendor motivations.  We believe that tackling the elephant in the room early and openly talk about compensation models makes sense in today’s market to help buyers get the most out of their vendor engagements.

An article published today in the Financial Post highlights the changing requirements for Tech Sales in Canada but will the model change along with it?  http://business.financialpost.com/entrepreneur/the-huge-job-opportunity-in-canadian-tech-that-no-one-is-talking-about

For 17 years, Combat has not paid commissions, choosing to sit on the same side of the table as our customers and finding technology solutions that best fit the business needs and not to maximize individual sales commissions.

 

Combat falls on the “non-commission” side of the debate.

 

Understanding that there are pros and cons for both models, we would love to hear your opinion and your experiences.

 

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