Sales Compensation Dose of Reality

Disclaimer: Prepare for a 2 x 4 directly between the eyes. I am not responsible if the proverbial 2 x 4 leaves a mark.

I work with compensation a lot, especially sales compensation. I have 2 compensation tenants that I know are universally true:

I have never met somebody who truly thought they were paid enough.And…Compensation is an emotional topic that people find difficult to have a rational discussion about.If you can keep these in mind for the rest of the entry, it will be appreciated. You see, I have been introduced lately to rational, talented sales people who know all of the things I point out above yet have a very unrealistic expectation of their value, especially in this economy.

Look around. Things aren’t what they used to be.

Companies still value sales people knowing they are the lifeblood of their company but want to change the deal a bit. Gone are the days of high base salaries for sales people, with very few exceptions. Say hello to the days of 100% commission opportunities or a lower base. Companies are happy to pay their top sales people who produce but that will be in the form of variable compensation that they earn from sales. Sales people who mention they need a higher base to be comfortable with this new opportunity in an interview might as well say they are a blood sucking leech (sorry, forgot to warn you before the 2 x 4 hit) who will take your money and not deliver.

I am reminded of a recent discussion with a salesperson that had a salary history of $35,000 plus commission and is seeking more than double that in base. When asking the individual why, reasons were family based and changes in their situation, not on the additional revenue they could generate. The bottom line in sales is that if you want to make more money you need to sell more. True hunters are the sales people who are extremely confident they can close business. For these salespeople, having little or no base (depending on the length of the sales cycle and assuming that they are given competitive sales compensation plan) does not scare them. It excites and motivates them because they know their earning opportunity is in their hands.

So, don’t forget to anticipate the 2 x 4 when searching for that next great sales opportunity. Make sure you have done your research and have a realistic idea of your worth to a company. That way, hopefully you can avoid that nasty bruise on your forehead.