Evan Carmichael advises against pure commission for new salespeople at a small firm. New reps need a draw or base salary to stay motivated while ramping up, plus lead-generation support like email campaigns or telemarketing to close deals faster.
Hi, I'm Evan Carmichael, and today I wanted to do a quick video to answer a question from one of our readers, Enahoro. I hope I pronounced that properly. His business is in the management training and consulting, and he has one staff member now who is a personal assistant, and he's looking to grow his business by hiring a couple salespeople. His question is, he's wondering if a commission-only sales model would work for him and if it makes sense. So commission-only sales models can be great, and this is basically where you're not paying a salary to your salespeople and they're out selling. Uh, it's great for performance only, so you're only giving up money when money's coming in. But you have to remember that it does take time for a salesperson to get ramped up. So you might want to consider doing a draw at the beginning so they get paid a certain amount of salary until they start earning commission. Just so that they don't get discouraged and quit on you too soon. You put a lot of time and effort into training and then they're gone. So consider paying a base until they start making some commission coming in. You also might think about trying to generate leads for them. One of the things that salespeople really hate doing is generating leads at the start. It's a lot easier once you can generate some leads for them, they can go out and close the sales. So if you're going to provide any kind of support for them, if it's email marketing or telemarketing or direct mail, or your website, anything that can help support them get started and quickly learn how to get in there and sell your product, that's a lot easier to start attracting some good salespeople to your company and a lot easier to pay the commission-only model. So I hope that helps. Good luck hiring the 2 salespeople and let us know how it goes. If people enjoyed this video, please leave a comment below. I'd love to hear your thoughts and feedback and a thumbs up too. And stay tuned for the next video. Thank you.
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