I have some concerns about some of the advice they are giving, especially in "Chapter One". This idea of making compensation for sales people so commission driven, and having the big "leader-board" and everything, seems so "Glengarry Glen Ross" and 1990's to me. At least a few firms are starting to experiment with paying sales people a flat salary, combined with regional and company-wide bonuses (or something along those lines) to try and align the incentives the the sales-person with the company as a whole. Because, as we all know, not every sale is a Good Thing.
That older model also risks creating a situation where your sales people are competing with each other and not acting in concert as part of a team. I can't help but wonder if there isn't a better way.
"least a few firms are starting to experiment with paying sales people a flat salary"
An "experiment" is all that will end up being.
I've been involved in selling and dealing with sales people (as a buyer) for a very very long time.
Simply not going to work at any scale. Goes against the psychological motivations of people and how they respond to rewards. Why not pay people for more effort? When you don't (say with a union) you end up with the postal system. [1]
Even with respect to sports people care about their individual performance greatly in addition to the team winning obviously.
Back to selling - Not that you aren't going to find a few people who don't fit the typical mold just not as many as you will need.
There is nothing wrong to tying compensation to performance and it actually works quite well. One of the things that I notice even when selling things is that if a customer paid me for 3 years in advance it more or less took the fun out of things and providing service that you have been paid for that way becomes much more of a drag than if you are earning it as you go along.
Money is a powerful carrot and for the right reasons.
Don't lump all selling and compensation into the mold of the abusive assholes portrayed in Glengarry.
[1] I was just at a high quality hotel where I noticed that the maids seemed a bit surly and uninterested when I asked them to make my room up or for extra towels. Seemed odd to me. Turned out that there is a room charge daily and that you don't leave tips.
Goes against the psychological motivations of people and how they respond to rewards. Why not pay people for more effort? When you don't (say with a union) you end up with the postal system.
I don't have a problem with tying compensation to performance, but I do question the alignment of interests. When every salesperson has this "it's me or them, every man for himself" mentality, I doubt that's best for everyone in the long-run. A commission heavy structure also seems like it will encourage short-term thinking - that is, the classic "get the sale at any cost, no matter what downstream damage ti does" mentality. Now maybe the commission based structure can be tweaked to account for that... I'm just saying that I think there may be room for some new models here.
Anyway, if you do multiple levels of bonuses, tied to the performance of the company as a whole, you are still hooking compensation to performance, albeit with a bit of indirection.
Also, there has been plenty of psychology research that suggest that not all people are motivated mainly by extrinsic rewards (ie, money). Maybe compensating sales-people differently just means hiring a different kind of sales-person? Just food for thought...
That older model also risks creating a situation where your sales people are competing with each other and not acting in concert as part of a team. I can't help but wonder if there isn't a better way.