All work & no play

Entrepreneur, August, 2002 by Mark Henricks

He and others recommend looking for sales experience extending beyond the go-go years, as well as evidence of solid sales training and business understanding, before taking on a new salesperson.

ONLINE EXCLUSIVE

No matter how much the world of sales changes, some things will always be true. That's why we call them cliches. Take a look at www.entrepreneur.com/features/sales to get the scoop from Barry Farber, writer of our "Sales Success" column, a top-rated speaker and the author of 12 Cliches of Selling and Why They Work (Workman Publishing Company Inc.).

PERFORMANCE ANXIETY

The good news about paying salespeople today is that you can peg a higher percentage of compensation to performance. The bad news is, old measures of performance may not be good enough.

Entrepreneurs today are having less trouble keeping good people and hiring new ones at lower base salaries than in years past. But they are also finding less justification for paying straight commissions for new orders. Instead, they're basing compensation on more exotic, harder-to-figure measures such as profit margin per order and customer satisfaction. The revised approaches do more than save money, although total sales pay may actually be shrinking from previously inflated levels.

Most important, they make sure salespeople aren't making the wrong sales. Paying based on profit margin keeps sellers from cutting prices just to get an order. And basing pay on customer satisfaction means salespeople won't promise features and delivery dates the company can't provide.

Mark Henricks is Entrepreneur's "Books" and Smart Moves" columnist.