Sales Training Workshops:

Sales Training America is a world class sales training and custom development training company specializing in sales training and sales skill development of our client's sales force. At Sales Training America we help our clients improve their sales profitability through the development of their sales management and sales efforts through SalesForce.com implementation. Sales Training America offers both public (open enrollment) sales training workshops well as the development of customized sales systems and sales workshops for Fortune 1000 companies across United States and Canada.

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Sales Training Tips:

Sales Workshop - Commission Per Sale Versus Number of Sales

If you've done any type of professional sales you probably are intimately familiar with some of the pros and cons of the relationship between the commission amount per sale and the number of sales you might expect to make. If you are considering sales, this could be a very important concept for you to understand and could significantly affect your criteria in selecting your next sales position.

First, I will tell you that I am making an important assumption. The assumption that I am making is that the lower the commission is per sale, the more sales you are likely to make. Another way to put it is that the larger the commission the more time you will, on average, need to invest in making the sale.

I make this assumption because the commission a business owner is willing to pay is often based on the amount of time and work that the business owner estimates it will take to make the sale. Paying a $1,000 commission (like we do) for making a sale that you might expect to make 10 times a day is usually not required to retain sales professionals in the job. Demand for that job would exceed the supply of spaces for the job and the business owner would reduce the commission to have a more balanced number of applicants to job positions.

On the other hand, if the job pays $10 per sale, but would require the average sales person to talk to a large number of people investing a good number of hours presenting and building value, few sales professionals would be willing to work for a commission of that size in relation to the amount of work.

There is some room for variation here. Some sales opportunities will allow you to make sales that have very high commissions with a reasonably short amount of time invested in the sales process. The sales opportunities you need to be careful with are the ones that offer you a relatively low commission with a very high amount of time required for the sales process.

Which brings us to the commission per sale versus number of sales discussion? If you are paid a small commission because you are expected to make several sales in a relatively small period of time, there are some definite advantages to that. For example, you get the benefit of quick feedback. If you are expected to make several sales a day, for example, you can see what works in your sales presentation and what doesn't much more quickly than if you are only expected to make a sale once every few days.

Not only do you get the benefit of feedback on your presentation, but do not underestimate the importance of mini-victories in morale and motivation. Anyone in sales knows that it is easier to stay on a role once you're on a role and making sales tends to start those positive roles. Prospects can sense the winning attitude in your voice and presentation and often respond positively to that.

So, there seems to be a decided benefit to seeking sales positions that might allow you to make smaller commissions and to make a larger number of sales, but that's not the whole story. There are also advantages to sales professional seeking sales jobs that allow them earn very large commissions on single sales.

For example, if you were making sales that had commissions that could be an entire week's wage you can see massive results from improving your sales skills. For example, let's say you are calling on 10 prospects per day and are used to closing 1 out of 50 in any given week. If you can improve your sales presentation and skills so that instead of closing 2% of your prospects you now close 2 out of 50, you've doubled your income. Some math folks will be quick to point out that if you doubled your sales on the smaller commissions you'd double your income too. Granted that is true. However going from 1 sale a week to 2 sales a week is different than going from 20 sales a week to 40 sales a week in my opinion from a practical stand point.

With larger commission but fewer transaction sales jobs, you do miss some of the mini-victories that can really keep you motivation up, but creating mini-victories for yourself might be an acceptable alternative especially if you are able to make a much larger amount of money overall by focusing on larger transaction sales.

Source: James Orr link

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