Take a look at a few dozen want ads for salespeople and I assure you that you’ll find plenty that offer no guaranteed salary.
They pay on what is called a “straight commission” basis. If you sell, you eat, and if you don’t you starve.
It is, perhaps, the ultimate form of merit pay: literally, you have to merit it, not through effort, but through results.
Most companies love to pay this way, because it all but eliminates their risks. They can be assured of several things when someone accepts straight commission compensation:
(1) They’re self-confident, and confident people sell more than the insecure.
(2) They’re willing to take total responsibility for their achievement; a rare attribute in today’s workers.
(3) They’re need and want less supervision and hand-holding.
(4) They’ll come to work, pre-trained; and of course
(5) They’ll pay for themselves right away, and cost-justify the company's overhead.
If a straight commission sales rep doesn’t pan out, very little has been invested in him, so this means companies can give more job seekers bites at the apple, at a lower cost than if they were salaried.
And typically, straight commission payers are more willing to offer big commissions to the successful. So, the upside is significantly greater for the salesperson who can handle the challenge.
But can you hack it as a commission-only seller? Most people can’t.
First, they believe that a company that doesn’t guarantee them SOMETHING is either less than legitimate or is not confident enough that the job will produce a solid income for itself, let alone for the rep. Along this line, candidates often see salary, its size and related perks, as a vote of confidence in their skills. When the guarantee is big, there’s faith in the new hire, and this gesture instills confidence in the candidate.
But even more daunting to most is the fact that straight commission ushers in a variable reinforcement schedule. This month you may break the bank, but next month, you may have to borrow on your charge cards. Dramatic ups and downs aren’t warm and fuzzy for most folks who like to know they're going to pay their mortgages or rent on time.
I believe the most important question is this one: If you had your druthers would you be in business for yourself or work on somebody else’s payroll? If you’re the independent type, then a straight commission plan could be your cup of tea, because it’s exactly how you’re paid when you’re completely on your own.
By the way, there’s another perk. In most commission jobs, employers realize they can’t insist you work their way, punching a conventional time clock. They must cut you some slack, allowing you a lot of freedom in how and when you work, because after all, they’re not paying you to warm a chair, but ONLY to succeed.
How you do it is really none of their business, and most of them, at least reluctantly, acknowledge it!
Dr. Gary S. Goodman, President of Customersatisfaction.com & The Goodman Organization is a popular keynote speaker, management consultant, and seminar leader and the best-selling author of 12 books, including Reach Out & Sell Someone and Monitoring, Measuring & Managing Customer Service, and the audio program, “The Law of Large Numbers: How To Make Success Inevitable, " published by Nightingale-Conant. He is a frequent guest on radio and television, worldwide. A Ph. D. from USC's Annenberg School, a Loyola lawyer, and an MBA from the Peter F. Drucker School at Claremont Graduate University, Gary offers programs through UCLA Extension and numerous universities, trade associations, and other organizations. He is headquartered in Glendale, California, and he can be reached at (818) 243-7338 or at: email@example.com
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