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Why Must You Pay Sales People Commissions?

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Re: Why Must You Pay Sales People Commissions?

#271

Post by staunch »

ghaff wrote: post #204
staunch wrote: post #164

Why? Because sales people are good at sales! Their whole job is negotiating the highest possible compensation for the value they provide. Apple doesn't need sales people to move millions of their products into "the Enterprise," and neither does any other company with products as good as theirs. It's just that most companies make shitty "Enterprise software" and then try to push it with aggressive sales tactics. There…

Except Apple actually does. [1] Yes, it's relatively limited but Apple has selectively hired sales people for enterprise sales. [1] http://www.techrepublic.com/article/apple-posts-huge-gains-i...

Ah, technically correct, the best kind of correct ;-)

It's true they have some people who will talk to you if you're a big customer, and even let you use the VIP room, etc. But, it's nothing like the model that A16Z promotes, where you push bad products with aggressive sales people.

Re: Why Must You Pay Sales People Commissions?

#272

Post by matchagaucho »

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 great Salesperson can sell a mediocre MVP on the promise of future enhancements.

This can help start-ups defer fund raising by bringing in operational cash. This can also bury start-ups by making promises that can't be kept.

Re: Why Must You Pay Sales People Commissions?

#273

Post by rayiner »

frgtpsswrdlame wrote: post #256
rayiner wrote: post #249

Earlier quoted context omitted.

I mean, obviously everyone adds value (from janitors up to doctors). And my person view is that all jobs should be compensated at the same hourly rate. But is there anything special about teachers? Like if they all quit society would go to hell, but that’s true of garbagemen and road workers too. The question is, does it matter who does the job?

>And my person view is that all jobs should be compensated at the same hourly rate. What? Care to elaborate?

I think the economy should compensate people based on factors they have control over, not ones they don’t. Someone who was born smart shouldn’t be better off for his luck. Your can choose how much you work. Maybe you can choose to do things like get an education (but not in our system where that is gated by standardized tests).

Re: Why Must You Pay Sales People Commissions?

#274

Post by ghostbrainalpha »

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.

Saying they practice social interaction and manipulation for fun outside work, so they shouldn't receive extra incentive is possibly the worst argument I have ever seen on Hacker News.

A prostitute would gladly sleep with a star NBA player for free, so should she/he not be compensated for sleeping with an aging/overweight and smelly client?

I enjoy playing high quality video games in my free time like Zelda. Should I not receive composition for bug testing the latest mind numbing Bejeweled mobile game crap at my job?

What I am saying is this... everyone interacts with other human beings. There is a large range in the quality of those interactions. Businesses must incentive heavily someone to make them actively seek out the most difficult and profitable of those human interactions.

Because someone chooses to interact with another human in their free time does not mean they shouldn't be paid for it.

Re: Why Must You Pay Sales People Commissions?

#275

Post by 0xbear »

Fordrus wrote: post #167
0xbear wrote: post #91

Earlier quoted context omitted.

Out of curiosity, what career path did you end up pursuing?

Short story: from German Literature to Neuroscience, after a family member was diagnosed with mental illness. Once In Neuroscience, almost literally no research questions I was interested in could be answered without substantial computer science expertise, started taking compsci courses and ABSOLUTELY LOVED THEM. And thus: Bioinformatics! Well, ah, I'm paused at the moment, my wife got semi-unexpectedly pregnant afte…

Well, sounds like you got things moving in pretty exciting directions. Congratulations on becoming a dad!

Re: Why Must You Pay Sales People Commissions?

#276

Post by ChemicalWarfare »

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…

What about sales engineers though? I've never seen them get commissions even though in a vast majority of cases they are the ones doing the heavy lifting of convincing the client's tech team[s] to go with the product/solution the company is selling?

A little less obvious case, but still - what if we're talking professional services type situation and the architect/engineer assigned to the customer does such a killer job the customer decides to spend more money on their services. Sales person's job at this point is minimal but they still get the commission but the tech person doesn't.

Re: Why Must You Pay Sales People Commissions?

#277

Post by wiz21c »

alien_at_work wrote: post #264
wiz21c wrote: post #190

Earlier quoted context omitted.

The money the sales person needs to live is probably the same as the engineer. Therefore, if sales people get commission, then their salary must be set lower than the engineer so that on average (that is, when the ratio between actual sales and missed sales is average), they earn the same thing as the engineer. (this in a context where the added value by the company is equally shared between the engineer and sales pe…

I don't understand what you're saying here at all. Are you under the impression that money someone needs to live has something to do with compensation? Labor is a market like any other. A sales salary has nothing to do with how much a sales person needs to live but rather perceived value of a sales role. In my personal experience, sales people tended to have higher salaries along with strong commission. Maybe your co…

good questions indeed.

I was challenging the fact that, as you say : "Labor is a market like any other.". I don't think it is like that because behind each job there's a life.

Moreover, on the fact that engineers and sales persons should have the same salaries, yep that's what I think. I don't see why sales works should be more compensated. I understand that the way it is compensated (bonus for sales) is the way it works, but in the end, I don't see why it should pay more than engineering (here I consider a context where the sales person and the engineer are both employees).

The two roles are equally important to me, just different skills.

Re: Why Must You Pay Sales People Commissions?

#278

Post by seem_2211 »

mavhc wrote: post #240
phkahler wrote: post #226

Earlier quoted context omitted.

>> 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

That's very true if you're selling something with a low value (most things consumers buy really), but you're dreaming if you think you can sell a technical product to a business for $10k + without salespeople. Enterprise sales is more like project management than what you probably think of when you hear "sales." Especially when you've got to pass through engineering, finance, procurement and legal to get a deal across the line.

Re: Why Must You Pay Sales People Commissions?

#279

Post by peteretep »

tensor wrote: post #261
peteretep wrote: post #160

Earlier quoted context omitted.

> I don't buy that sales > skills are so much more > difficult to find or are in > higher demand than software > development skills Sure, and sales people don't understand why the entire engineering function of the company can't be done on eLance for $10/hr. We can talk about 10x developers all we like, but if you sit in a sales meeting of many companies you'll find there are 10x sales people whose presence is easily…

There may or may not be 10x employees in either camp, though I don't quite see what that has to do with the income difference. Should a 10x salesperson earn three times what a 10x developer earns? If so why?

Management can easily recognize who the 10x sales people are, where 10x developers may be a myth.

Re: Why Must You Pay Sales People Commissions?

#280

Post by xiaoma »

rayiner wrote: post #249
hacking_again wrote: post #246

Earlier quoted context omitted.

All of it? None of it? Teachers themselves don't add value, teachers enable value addition.

I mean, obviously everyone adds value (from janitors up to doctors). And my person view is that all jobs should be compensated at the same hourly rate. But is there anything special about teachers? Like if they all quit society would go to hell, but that’s true of garbagemen and road workers too. The question is, does it matter who does the job?

> And my person view is that all jobs should be compensated at the same hourly rate. But is there anything special about teachers?

Some nations tried that idea last century. It lead to war, famine and 100 million deaths. Aiming for utopia is a noble idea, but the results have been horrific thus far.

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