The Commission Con: How to Avoid Getting Screwed by Your Sales Job

The Commission Con: How Companies Rip Off Salespeople (and How to Fight Back)

Listen up, money-hungry mercenaries of the sales world!

Let’s expose a dirty little secret that many companies try to keep hidden: the commission bait-and-switch.

It’s a classic corporate scam that can sabotage your earning potential, crush your motivation, and leave you feeling like you’ve been robbed.

The Commission Bait-and-Switch: A Classic Corporate Scam

Here’s how the con works: companies dangle juicy commissions in front of you like a carrot on a stick.

They promise you the world, enticing you to sell their products or services with the allure of a fat paycheck.

But as soon as you start hitting your targets and raking in the dough, they pull the rug out from under you.

They change the commission structure, lower the rates, cap your earnings, or introduce new rules and restrictions that make it harder to earn what you were promised.

It’s a shady tactic that leaves many salespeople feeling betrayed, demoralized, and cheated out of their hard-earned rewards.

Why Companies Play the Commission Game:

Here’s a deeper dive into the motivations behind those shady commission changes:

Cost Control: The “We’re Hemorrhaging Money!” Panic

• Sometimes, companies genuinely miscalculate their commission structures. They may underestimate the earning potential of their sales team or overestimate the profit margins on their products or services. When they realize they’re paying out more than they anticipated, panic sets in.

• Instead of taking a long-term, strategic approach to adjusting their compensation plans, they resort to knee-jerk reactions that often harm the very people who drive their revenue. They slash commission rates, introduce caps, or add complex qualifiers that make it harder to earn those juicy payouts.

• This short-sighted approach can have a devastating impact on sales team morale. When salespeople feel like they’re being punished for their success, their motivation plummets, and their performance suffers. It creates a toxic environment of distrust and resentment, ultimately hurting the company’s bottom line.

Shifting Priorities: The “Flavor of the Month” Syndrome

• Companies are constantly evolving, and their sales goals often shift with the changing tides of the market. They may introduce new products, target new customer segments, or prioritize different revenue streams.

• While adapting to market changes is essential for survival, companies often fail to consider the impact of these shifts on their sales team. They may abruptly change commission structures to incentivize the “flavor of the month” product or service, leaving salespeople feeling like they’re constantly chasing a moving target.

• This lack of consistency and transparency can create a sense of instability and frustration among the sales team. Salespeople may feel like their efforts are not valued, and their commitment to the company may waver.

Good Old-Fashioned Greed: The “All for Me, None for You” Mentality

• Let’s face it, some companies are simply driven by greed. They want to maximize their profits, even if it means shortchanging the very people who generate those profits – their salespeople.

• They may view commissions as an unnecessary expense rather than an investment in their sales team’s success. They may prioritize shareholder value over employee well-being, creating a culture of exploitation and resentment.

• This type of greed-driven decision-making can have long-term consequences for the company. Top performers may leave for greener pastures, morale may plummet, and the company’s reputation may suffer, ultimately impacting their ability to attract and retain top talent.

The Problem with Capped Commissions and Shifting Goalposts:

Capped commissions and constantly changing compensation plans can be incredibly demotivating for salespeople.

It’s like running a marathon where the finish line keeps moving further and further away.

Imagine this: you bust your ass to exceed your quota, bringing in a flood of new business and generating record profits for the company.

You’re envisioning that well-deserved bonus, that luxurious vacation, that new car you’ve been eyeing.

But then, just as you’re about to cash in on those fat commission checks, they change the plan.

They reduce your commission rate, cap your earnings, or introduce new metrics that make it nearly impossible to hit your targets.

How motivated would you be to continue performing at that high level?

How much trust would you have in a company that pulls the rug out from under you just when you’re about to reap the rewards of your hard work?

The Ideal Commission Plan: Uncapped and Aligned with Your Goals

So, what should you look for in a commission plan?

Here are a few key elements that signal a company that values its salespeople and rewards their success:

• Uncapped Commissions: This means there’s no limit to how much you can earn. The more you sell, the more you make. This creates a powerful incentive to perform at your best and truly rewards your efforts.

• Commission Paid on New Logos: You’re rewarded for bringing in new business, which is the lifeblood of any company’s growth and expansion.

• Commission Paid on Renewals: You’re also rewarded for retaining existing customers, building long-term relationships, and generating recurring revenue. This demonstrates a commitment to customer loyalty and sustainable growth.

• Balanced Base and Variable Pay: A healthy balance between base salary and variable compensation (ideally around 50/50) provides a sense of security while still offering the potential for high earnings based on your performance.

Don’t Settle for Less (You’re Worth It)

When you’re evaluating a job offer, don’t just focus on the base salary or the fancy job title.

Pay close attention to the commission plan. It can make a huge difference in your earning potential, your motivation, and your overall job satisfaction.

Don’t settle for a capped commission plan or a company that’s constantly changing the rules of the game.

Find a company that values your contributions, rewards your success, and gives you the opportunity to earn what you’re truly worth.

Remember, your time, talent, and effort are valuable assets.

Don’t let a lousy commission plan or a greedy company hold you back from achieving your financial goals and living the life you deserve.

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