Salesforce · Marketing

How to build a commission based sales team?

Evan Levy

March 9th, 2015

My company is quickly growing and I am in need of a sales representative, but am not at the point where I can pay someone to work full-time. I am looking for resources and advice on how to go about hiring a commission bases sales representative.

Mahmoud Elsaid Entrepreneur-LamasaTech MD for Signage,Touch Screen & Kiosk Solutions-Technology Innovation/Business Strategy Consultant

March 9th, 2015

I tried that in several companies I ran and it just doesn't work out as they aren't invested enough to build a pipeline and close it. Try to build up a network of affiliates or resellers. That works our better as they have the same customer you need already and they'd get commission for selling on your product . That's my personal experience.

Sati Hillyer Looking to Hire a Ruby Engineer to join OneMob - 2015 Gartner Cool Vendor for CRM Sales

March 9th, 2015

I use this:
http://www.saastr.com/a-framework-and-some-ideas-for-your-first-sales-comp-plan/

But one thing I learned from VP of Sales at RelateIQ (Armando Mann) - make sure these initial hires are just as passionate about the vision as you are. You don't want them only focused on comp otherwise they may sacrifice company principal for their commission check.

Anonymous

March 9th, 2015

My team helps companies in your situation. We act as the sales and business development team for startups - until they are ready to build an internal team. I can send you more information by email.

Jessica Magoch Sales doesn't have to be a dirty word. Get more clients without being icky, sleazy, or just plain annoying.

March 12th, 2015

Hi Evan, 
I can truly say this is my area of expertise. We build commission - only sales teams for startups and have been building them collectively for 30 years with many successful exits.
A commission only plan is a completely different structure than a Base + Commission plan.  There are many advantages to being a commission only sales person, so make sure you satisfy the following: (this is a short list)
  1. A commission only person should have the opportunity to earn more than a base + commission rep (they are taking on more risk), and have lifetime ownership of the accounts she brings in
  2. A commission only rep should be compensated partly in equity after reaching certain performance and vesting requirements (as you would with any person working for free on your team)
  3. A commission only rep has the flexibility to create his own schedule, work remotely and have unlimited personal and sick days
  4. A commission only rep needs a world class leadership team to motivate and inspire her on a daily basis
  5. A commission only rep needs to sell a product that changes lives, not just makes money.
We developed a proprietary algorithm that helps us calculate competitive compensation plans for commission only teams, taking into consideration the above as well as many other factors.  I'd be happy to run your company's numbers through it to give some recommendations.  We're also piloting a recruiting software that specifically evaluates sales people and looking for beta testers. 
You can reach me through LinkedIn. 
Have a good one!
Jess

Rachel Zheng Business Development Manager at Honyee Media

March 9th, 2015

HI Evan, this is a broad question and often dependent on your company, maybe you should look for an awesome advisor who can be involved. Check out here: http://members.founderdating.com/browse#/?results=advisors

Jim Lucas Principal at Evanston Consulting Group

March 9th, 2015

Two different thoughts about approach. 1. Working with experienced sales that is like a broker or non-exclusive sales rep for your firm; 2. There are a number of younger, hungry folks who are working with several startups; they have the passion and are willing to work against vision. 

Have usually seen a tradeoff between experience and passion.


Brian Wrye Creative Director at Sales Team

March 9th, 2015

What is the product, or products? Where do you live? What market share do you have in said product, or service and what percent do you want to gain? Are you selling locally, regionally, or nationally? How many on staff now? What sales materials do you have in place? What is the value proposition? What is working for you? What is not working for you? Who is your target market? How are you reaching them now? What's your approach? What percent of sales calls do you close, per every 10 customers called upon? What length is the sales cycle? What is cash flow like? What are your margins? What percent of sale would you offer as commission? How long would you provide commission on a sale? One time only, or over a period of time? How many sales people do you want/need now? How many do you want to have and would they be selling locally, regionally, or nationally? Do you reimburse for expenses, such as mileage? Do you have a presentation that can be customized per customer? If you want, answers these then I'll either come back with some added questions, or direct thoughts? Sincerely, Brian C. Wrye

Jesse Landry

March 9th, 2015

Hi Evan, Are you prepared to hire someone young that you are willing to train? Or someone older that has an established network that could fit the market you are looking to sell to? Is there any equity or deeper incentive for someone to join as a commissioned based rep? What is your confidence level in your company that could attract a commission based rep? Sorry to answer with a bunch of questions but felt they were important questions. Jesse ᐧ Jesse D. Landry DevSpark | Senior Client Partner M - (516) 851-8378 | E - jlandry@devspark.com Skype - jessed_landry | LinkedIn | Twitter

Peter Kestenbaum Advisor, Investor, Mentor to Emerging firms

March 9th, 2015

 evan way to general a question....  knowing nothing of your product, the market, your firm, your objectives, your status ( is your product at mvp or beyond.. do you have clients?   ) your finances its all over the place..sit down with an advisor or mentor for a few hours... good ones will be glad to help and not charge you..

Jack Greene

March 9th, 2015

Hi Evan,  As Peter and a few others who commented before him, there's more that we would need to know before suggesting one plan over another.  Questions such as,  is the business repeatable and will the sales person continue to receive commissions on renewal business.  Ultimately, a straight commission plan suggests that the salesman assumes all of the risks.  At the same time if you are not providing any compensation besides a commission, you really loose all control over their work behavior.    Happy to offer suggestions, but need to know more about you, your company, product/service, price point, etc.

Best wishes,
Jack