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Why Must You Pay Sales People Commissions?

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Re: Why Must You Pay Sales People Commissions?

#221

Post by Spooky23 »

Two reasons -- you don't want to pay salespeople who don't sell anything, and you want to attract salespeople with technique and a book of business that makes them sell more.

The best salespeople I typically work with have built a relationship with the clients. I take meetings with them because they do not waste my time and they understand my company's needs. I'm more likely to take a call from company X if I know the rep from past business.

On the counter-side, I've run into many, many salespeople who bounce around and suck. They focus on doing the dance and checking boxes in Salesforce instead of actually selling product and dump their internal corporate drama on the customer. They bounce because they miss their quota and get canned.

Re: Why Must You Pay Sales People Commissions?

#223

Post by tosser350 »

richdougherty wrote: post #63
phkahler wrote: post #3

Why do sales people get commissions and engineers don't? Because the sales person knows exactly how much money they bring in and can claim "if I didn't make the sale, that money would not be coming in" even though it's not always true it's a good story. An engineers actions are so far removed from revenue that they can't make a claim so directly. Also, if they did want to claim a portion of product revenue they could…

> the sales person knows exactly how much money they bring in I agree this is the key factor. Any job where a person can argue a clear, direct, measurable link between their work and profit is a job that can be paid based on financial results. Other jobs where you see this: financial traders, consultants with direct client contact. To take the other extreme, look at teachers. They have the potential to generate huge…

I think MOOCs are the future based on my own experience. They allow the best teachers to scale their reach. Instead of aristotle giving a lecture to a room it allows an unlimited audience who can also rewind and pause if they don't understand something.

I've been able to learn machine learning and deep learning from Andrew Ng, one of the best AI researchers in the world, among other world class researchers, for free. It's incredible when you think about it, probably one of the most significant things in human history. I've been able to learn how to code by picking and choosing the best classes from MIT, Stanford, Harvard, etc without spending a penny. Why settle for mediocre teachers at state universities when these options are available?

The major thing we need to do is find some other way to grade people other than using a college degree as a benchmark.

Re: Why Must You Pay Sales People Commissions?

#224

Post by jondubois »

Sales people have it the best; they are partially responsible for creating market bubbles by overpromising results/features in order to get sales... Then when the bubble which they created reaches popping point, stock prices collapse and companies go bankrupt; engineers lose all their stock options but sales people are fine because they already got their commissions. Overpromising allows them to get all the upside and none of the downside.

The only downside is that sales gets more competitive at the peak of the bubble; so it's harder to get those big commissions.

Re: Why Must You Pay Sales People Commissions?

#225

Post by gbacon »

jbooth wrote: post #25
Waterluvian wrote: post #7

Earlier quoted context omitted.

Also personality. Good salespeople are... Good salespeople. They apply their craft when negotiating compensation. What am I going to do, make a single page app about why I should be paid more? ...actually that's not a bad idea.

At the end of the day, a salesperson not making quota is going to be fired. The best salesperson in the world could maybe buy themselves an extra year, at best. But eventually, if they're so great, where are the numbers? And their next job search isn't gonna look so great. They can't solve a problem on a whiteboard to make up for the fact that their prior business was a bad fit for the market, or whatever. A salesper…

Great point. Compensation is a vector of which job security is a component. Sales: extreme volatility, excellent pay for the survivors. Engineering: medium to high volatility, strong pay. Education: near zero volatility, low pay.

Re: Why Must You Pay Sales People Commissions?

#226

Post by phkahler »

aj7 wrote: post #200
richdougherty wrote: post #136

Earlier quoted context omitted.

I'll just put one citation into this discussion. Raj Chetty and his collaborators produce amazing research. I attended a talk when he visited New Zealand a few years ago. In this paper he's attempting to address the dream of measuring teacher value, by measuring changes in test scores against changes in lifetime income. Yes there are other ways of measuring teacher "value" too, but income changes are relevant to this…

250k lifetime? So he should get another $6k. Teachers and engineers don't work for money. And there are often bad consequences for people who "don't work for money." I worked in sales so I could afford to be an engineer later. There were plenty of ex-teachers in sales. They did well.

>> Teachers and engineers don't work for money.

You're right. I hit the comment button and was going to say you're damn wrong - I have done a lot to increase my pay with each new job. I wouldn't be at work if not for the money. But then I realized you're right too. I don't think about money much at all when I'm a work. I do try to make a good product, and I do worry about bill of materials and production cost, but I don't focus on money coming to me because that's already been agreed upon. Is that what you meant by that statement?

Re: Why Must You Pay Sales People Commissions?

#227

Post by rb808 »

tensor wrote: post #101

I suspect that developers are not so much upset at salespeople getting commission, but rather why they get paid so much compared to developers. Personally I don't buy that sales skills are so much more difficult to find or are in higher demand than software development skills. Some of the difference in equity certainly has to do with the higher risk of getting fired for poor performance in sales. But beyond that it's…

> I suspect that developers are not so much upset at salespeople getting commission, but rather why they get paid so much compared to developers. Personally I don't buy that sales skills are so much more difficult to find or are in higher demand than software development skills.

You should do it then! Seriously I know a few people that have made the switch. They felt vulnerable at first but wouldn't want to go back now.

Re: Why Must You Pay Sales People Commissions?

#228

Post by avs733 »

aj7 wrote: post #200
richdougherty wrote: post #136

Earlier quoted context omitted.

I'll just put one citation into this discussion. Raj Chetty and his collaborators produce amazing research. I attended a talk when he visited New Zealand a few years ago. In this paper he's attempting to address the dream of measuring teacher value, by measuring changes in test scores against changes in lifetime income. Yes there are other ways of measuring teacher "value" too, but income changes are relevant to this…

250k lifetime? So he should get another $6k. Teachers and engineers don't work for money. And there are often bad consequences for people who "don't work for money." I worked in sales so I could afford to be an engineer later. There were plenty of ex-teachers in sales. They did well.

>Teachers and engineers don't work for money. And there are often bad consequences for people who "don't work for money."

This is a metnarrative[0]. It is a thing that people say not because it is true but because it is useful to create a larger narrative that is perceived as useful within the social sphere. Peopl, especially engineers, are socialized to believe it and normed to say it. The result is very simply lower pay for their labor. It is a post hoc justificication.

[0] Sorry to lazy at the moment for a real cite so heres a wiki one...https://en.wikipedia.org/wiki/Metanarrative....A metanarrative (also meta-narrative and grand narrative; French: métarécit) in critical theory and particularly in postmodernism is a narrative about narratives of historical meaning, experience, or knowledge, which offers a society legitimation through the anticipated completion of a (as yet unrealized) master idea

Re: Why Must You Pay Sales People Commissions?

#229

Post by phkahler »

richdougherty wrote: post #136
richdougherty wrote: post #63

Earlier quoted context omitted.

> the sales person knows exactly how much money they bring in I agree this is the key factor. Any job where a person can argue a clear, direct, measurable link between their work and profit is a job that can be paid based on financial results. Other jobs where you see this: financial traders, consultants with direct client contact. To take the other extreme, look at teachers. They have the potential to generate huge…

I'll just put one citation into this discussion. Raj Chetty and his collaborators produce amazing research. I attended a talk when he visited New Zealand a few years ago. In this paper he's attempting to address the dream of measuring teacher value, by measuring changes in test scores against changes in lifetime income. Yes there are other ways of measuring teacher "value" too, but income changes are relevant to this…

I don't think the problem is evaluating individual teachers. If you look at average teacher compensation it isn't that much compared to the value they add. We could let the school and the union work out how to spread the pay among the teachers at a school, I think they're underpaid overall and that has nothing to do with evaluating them individually.

Re: Why Must You Pay Sales People Commissions?

#230

Post by Eridrus »

phkahler wrote: post #3

Why do sales people get commissions and engineers don't? Because the sales person knows exactly how much money they bring in and can claim "if I didn't make the sale, that money would not be coming in" even though it's not always true it's a good story. An engineers actions are so far removed from revenue that they can't make a claim so directly. Also, if they did want to claim a portion of product revenue they could…

A coworker once suggested to our CTO that we should get bonuses as a % of the money we save by optimising our AWS costs. I was super on board with that plan at the time since I had been thinking about an unmaintained system and had figured out we could shave off a huge chunk of storage saving us 20k/month with no impact on functionality, and I got the change deployed. Instead of a bonus I got laid off a few months afterward.
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