Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why Must You Pay Sales People Commissions?

a16z.com

Post reply on HN
Print view View original

231–240 of 327 posts

Re: Why Must You Pay Sales People Commissions?

#231

Post by basseq »

"Sales is the highest paying hard work and the lowest paying easy work."[1]

With sales, you want to pay for performance and pay for outcomes. And with sales, it's easy to measure quantitatively and simply. Good sales people love it and make good money—bad sales people don't get paid and/or leave.

This is the ideal world. As a employer and an employee, you wish all your departments could be measured and rewarded like that.

Not everyone is cut out for sales, and that's fine, but the model works and works well. Examples where it doesn't work well (e.g., over-promising, over-paid) are companies that have poorly balanced incentive commission plans.

[1] https://www.nasp.com/article/FF282761-5D6C/sales-is-the-high...

Re: Why Must You Pay Sales People Commissions?

#233

Post by brianwawok »

Eridrus wrote: post #230
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 af…

Is there a reverse incentive here?

*IF we bloat AWS costs for 1 year, then at year end find a way to cut 50k.. bam, big bonus?

Maybe if the adding to AWS cost team is a different team from the lowering cost team...

Re: Why Must You Pay Sales People Commissions?

#234

Post by rbcgerard »

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…

In my experience it's all about where the sales target gets set with sales people, as it can be really hard to differentiate the "seat" from the person. I.e. An all star salesman at one company, given a different product/company might not be able to make their numbers. Hence the old saw that good salesman find easy products to sell...

Re: Why Must You Pay Sales People Commissions?

#235

Post by madshiva »

Totally wrong in my point of view. If you have a good product it will sale by itself, only poor product need aggressive sale people to sell them.

It's not about who is selling, but what are you selling?

My father is selling product, did a very nice job, but because he did too much result, get is commission removed or downsized but yeah the commission is the solution...

Re: Why Must You Pay Sales People Commissions?

#236

Post by [deleted] »

megiddo wrote: post #106

What an enormous echo chamber. I moved from senior dev to sales. My contract is 100% commission, because it aligns performance with business requirements. Good sales is every bit as difficult as good dev, maybe harder. The only people who think devs are not well compensated are devs who can't negotiate or are marginal. If you've never told an interviewer to go fuck themselves over stupid questions or whiteboarding in…

[deleted]

Re: Why Must You Pay Sales People Commissions?

#237

Post by lunchables »

>I guarantee your sales people never sell enterprise software for fun.

And I guarantee you your programmers aren't working on your enterprise software outside of work. Conversely, your sales people are practicing the exact same activities (social interaction, manipulation, etc) outside of work on their personal time.

Re: Why Must You Pay Sales People Commissions?

#238

Post by wil421 »

brianwawok wrote: post #233
Eridrus wrote: post #230

Earlier quoted context omitted.

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 af…

Is there a reverse incentive here? *IF we bloat AWS costs for 1 year, then at year end find a way to cut 50k.. bam, big bonus? Maybe if the adding to AWS cost team is a different team from the lowering cost team...

Something like this happens all the time in Corportate IT, I've been seeing it a a lot lately.

It goes like this VP agrees to do these projects in 2018 at X amount. VP gets the highest possible cost for X. VP cuts projects and/or project budgets down to bare minimum. Now he can say he saved whatever amount and is a hero for saving so much let's give him a fat bonus.

Re: Why Must You Pay Sales People Commissions?

#239

Post by edc117 »

lunchables wrote: post #237

>I guarantee your sales people never sell enterprise software for fun. And I guarantee you your programmers aren't working on your enterprise software outside of work. Conversely, your sales people are practicing the exact same activities (social interaction, manipulation, etc) outside of work on their personal time.

Sorry, but disagree. I guarantee you many passionate software developers are working on their development skills - learning new frameworks, building personal projects that carry into their day to day work, and yes, sometimes even developing something the company can use 'for fun'. Are there developers that don't? Sure, same as there are sales people that don't.

Edit: As another post says, it's because sales people are only one step removed from the revenue-gaining process - they are often directly responsible for closing a sale, so they can easily claim credit.

Re: Why Must You Pay Sales People Commissions?

#240

Post by mavhc »

phkahler wrote: post #226
aj7 wrote: post #200

Earlier quoted context omitted.

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…

An engineer doesn't want to make a bad product, but if a company has a good product they don't even need to hire a salesperson
Post reply on HN