Are you a business owner who’s thinking about switching to commission-based pay for your sales team? Maybe you want to know how it will affect employees or what kind of results you can expect from this kind of compensation structure. This article will look at what happens when salespeople are paid by commission, and whether or not you can keep good salespeople if you are only paying commissions.
What Happens To Salespeople When They’re Paid Commissions Only?
When you pay salespeople commissions only, they work harder and more business hours. This is because they need to make as much money as possible to keep their job. They may also be more likely to leave if the commission structure changes or if the company goes out of business.
If you only pay your employees commission-based wages, there is an increased risk that they will cheat customers by selling products that are not good for customers’ needs or interests. For example, if a customer comes into a car dealership wanting to buy an SUV but doesn’t know how much it costs or what features it has, then the salesperson may try selling them something else instead to get paid more money from commission alone.
When Is Commission-Based Pay A Good Idea?
There are many situations in which commission-based pay is a good idea. For example, if you want to motivate your salespeople and reward them for their hard work, then commission-based pay is ideal.
It’s also a great option if your product is easy to sell and demonstrate because it gives the salesperson an incentive not only to sell but also to do so quickly–the sooner they make their sale, the more money they get paid!
Another situation where commission-based pay could work well is if your company has a diverse range of products or services that customers will buy from multiple places within their organization.
In this scenario, having multiple commissions means that even if one department doesn’t buy from yours directly, there’s still an opportunity for someone else within their organization who does need what yours offers – and therefore still pays commissions as well!
How Can You Keep Good Salespeople If You Only Pay Commissions?
To keep good salespeople, you need to pay them well. The best way to do this is with a commission structure that’s tied directly to performance. If you are not paying commissions well enough and aren’t willing or able to change things up, then your business may lose some valuable people along the way!