FORTUNE Small Business:

Why to be wary of commission-only sales staff

Hiring a salesperson on commission sounds like a cost-saver, but investing in your staff usually pays off in the long run.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

Ask FSB
Get small-business intelligence from the experts. Here's a chance for YOU to ask your pressing small-business questions, and FSB editors will help you get answers from the appropriate experts.
Your name:
* Your e-mail address:
* Your city:
* Your state:
* Your daytime phone #:
* Your questions:

(FORTUNE Small Business) -- Dear FSB: What are the best sources of getting salespeople for my small business? Are there any commission-only sales firms out there, and can you recommend that route?

- Henry L. Rolfe, Rowlett, Texas

Dear Henry: There are commission-only sales firms, but experts say that might not be the smartest route.

"A small business depends on its unique culture and product, not just a commodity. There's something special about that business," says Aaron Ross, CEO of Blackbox Revenue, a San Francisco sales productivity company, who also counsels small business owners through the Small Business Administration's SCORE program.

"If you hire someone and you're not really willing to invest time and resources in them - and that's really what a commission-only sales person suggests - then you're missing an opportunity," he says.

Good sales people communicate to prospects whatever makes your company special.

"They're preaching your company's gospel, so you need someone who buys into the mission, someone you've spent time and resources getting excited," says Ross, who also writes a blog about sales.

Hiring commission-only salespeople may only look like a less expensive alternative to salaried employees, says Kimberly McCall, president of McCall Media and Marketing in Freeport, Maine - but in the end, it rarely works out that way.

"With the high churn rate of commission-only sales people, providing a position where there's an equitable base and a reasonable expectation to succeed is probably less expensive in the long run," she says.

Commission-only sales people who are just in it for the money "are the ones who will bail out first if hard times hit," says Ross.


Also, it's tough to find quality commission-only salespeople, says Jo Prabhu, a member of the staffing management panel of the Society for Human Resources: "They're becoming a dying breed. Sales reps change industries, jobs and locations. Today, it seems everyone wants a more secure type of position."

Depending on your business and your competition, outsourcing your hiring to a recruiter may not be the best option.

"You really have no control over whom you're getting," Prabhu says. In fact, the best resource for finding sales people is often your own network,

"Start within your industry. It all boils down to 'Who do you know?'" says Prabhu, who is also the owner of 1800jobquest, a Long Beach, Calif.-based healthcare and IT placement firm.

"Social networking websites for grownups, like LinkedIn.com, can be really effective ways to network," McCall says. "You can post a job there and put it out to your network and know that people who read it are going to be tied to your industry."  To top of page

How do you recommend Henry find salespeople? Should he hire a commission-only team? Share your advice here.

Getting the most out of your hourly workforce

Hiring your first employee

Hired guns on the cheap
Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
These 10 food trends could dominate 2015 So long, kale. Here's what's expected to shake up the food industry next year. More
Beyond Russia: Geopolitical hot spots in 2015 Investors beware: These 5 global crises are likely to rattle the stock market and world economy. More
20 antique guns that fetched big bucks Morphy Auctions in Pennsylvania put nearly 1,000 old guns on the block. Here are just a few. More


Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.