Is the Commission - Quota Sales Model Dead?

It’s not very often when an article gets me so agitated that I feel that I have to respond but, this one did … No Commissions, No Quota: the Future Model for Sales? Before you read on, in full disclosure, you should know that I am on the wrong side of 60 and have been in B2B sales and management since 1977.

Now, I like the company that featured this post and I like their people. The author is highly respected but, will all due respect not only do I disagree, I am offended. My impression is that he has chosen to paint all commissioned reps with a broad, not so complimentary, brush. I hope that I have misinterpreted his intentions!

Looking at the article comments … it seems that I’m not alone in my disappointment. Perhaps we should just kill all the salespeople and reward everyone else with participation trophies. There are three problems associated with eliminating quotas and commissions ….

Salespeople need and want incentives and a company needs salespeople.
Commissioned salespeople, the good ones, have always focused on customer retention because it means more commissions.
I’m not so sure that salary only programs even work.

You need salespeople

And they are wired differently. Marketing folks would die in a sales environment and good salespeople would rather slit their wrists than work in that department or any other company area.

Now, the author does suggest that incentives could be based on customer retention and satisfaction. That’s fine but, who deserves that money? The salesperson only? What about marketing and customer service? Is the accounting department chopped liver? By the time you spread these around, everybody gets $1? Motivating? Not for salespeople.

Salespeople are the lifeblood of the business and nothing, I mean nothing, happens until somebody sells something. Salespeople are rewarded for selling your products and services as this is their job and good salespeople are hardwired to perform it. These same salespeople are quota and commission driven even if they do have a base salary.

Customer centric

Commissioned salespeople and customer centric are not mutually exclusive terms. I’m flabbergasted by the suggestion that they are. What commissioned salesperson does not want, live by, referrals and repeat business? I based my entire selling career on these two sectors. The only way to get them is via customer satisfaction.

Compensation

I get that salespeople these days want, and expect, a base salary in addition to incentives. Salary only? Not on my watch and the same holds true for eliminating quotas. I do know this. I’ve done a lot of compensation programs in the past and …

The numbers still have to add up.
Commission reps will always make more than salaried or salary plus because they are sharing the risk. They have skin in the game.

Last year, I looked at the comp program for a tech company. It had a generous salary as well as generous incentives. They also had multiple specialized salespeople doing all of those things that I have traditionally done by myself. They were all paid handsomely and the “quotas” (while high) seemed too low to support the wages.

Now, since I have no experience with comp programs for SAAS companies, I didn’t say anything but, I could not see how the numbers added up. Not my place to question. However, and I don’t know if this was the cause … they are no longer in business. Certainly, comp programs will fluctuate by industry and responsibilities.

I have always been associated with straight commission programs plus a draw. Not only have I managed these, I started my selling career on straight commission and ended it the same way … by choice. I’m sorry but, I can’t even envision a sales position that would not have some sort of a quota and a commission element.

If there is a problem

This points to the salespeople you hire and how you have trained them. It does not point to the fact that your salespeople are commission and quota oriented. It does point to management so I would start there.

Your thoughts? Should we stick a fork in salesperson commissions and quotas? Maybe we should just stick a fork in me and shoo me into retirement.

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Craig M. Jamieson

Managing Member at Adaptive Business Services

Craig M. Jamieson is a lifelong B2B salesperson, manager, owner, and a networking enthusiast. Adaptive Business Services provides solutions related to the sales professional. We are a Nimble CRM Solution Partner. Craig also conducts training and workshops primarily in social selling and communication skills. Craig is also the author of "The Small Business' Guide to Social CRM", now available on Amazon!