Why Sales People Are the Highest Paid Employees…

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I speak with CEO’s and senior executives on a regular basis regarding compensation issues – especially when it comes to paying high powered sales leaders. While some CEO’s truly understand the reasons that successful sales performers should be highly compensated, many still just don’t get it. During this economic downturn, we are now beginning to wind out of, many of our clients are still engaging us on search assignments to find and place proven sales talent that can positively impact the revenue of the company. Let’s face it, nothing happens until something is sold. Good sales people make a lot of money! Period.

Back to my point. In my career, I have seen first hand how a compensation package designed for individual contributors and sales managers can really move the needle on the revenues of a company. There is constant pressure to drive revenue and organic growth, particularly with publicly traded companies who have to deal with shareholders and analysts who expect a return on their investment.

So the question is: Why do some CEOs struggle on paying high commissions and bonuses to those who meet and exceed their sales objectives? I have a few examples I have seen firsthand that just baffle me…

  • Sales People Don’t Deserve to Earn That Much Money: Selling is not hard work (yuk yuk), and sales people don’t deserve to make a lot of money while others are required to deliver goods and services or install products sold by the sales person. The sales guy makes the sale and dumps it in someone else’s lap to deal with and exits the scene. Correct (job well done). So what? Here’s the reality. Many people don’t have what it takes to be a successful salesperson. They wouldn’t even know where to start. Actually, they are better at beating up on those in sales than delivering their own value equation. Beat up on sales. Counterproductive? Jealous? Yep. Pure and simple.

I certainly don’t believe in paying something for nothing. Never. However, successful sales people need to be paid based on the value they deliver. If they over deliver – they should be overcompensated for the extra revenue and profit they created. Plain and simple. And for those who disagree with how sales people should be paid – I have some advice:

  1. Why don’t you try it. Suit up, ask for a territory and a quota and see how well you do. If you are really good, you will see how hard it can be to be in sales and why good sales people earn a lot of money. If you fall on your face, you will likely still find reasons why sales people earn too much.
  2. Get rid of all sales people in your company and just wait for the bottom to fall out. Trust me, it will. Wait. I know. Maybe customers will start calling YOU and begging YOU to sell them your goods and services. Yeah. That should work. NOT!

In the end – in sales, what gets measured gets done. Don’t make the carrot a joke when it comes to compensating sales people. They will figure it out and leave. If they are good – that could spell trouble. Pay sales people what they are worth and for the revenue they deliver, and your company will experience positive results for every employee, shareholder and for your customers. It works! Trust me.

FOT Background Check

Tim Tolan is a partner at Sanford Rose Associates and specializes in Executive Search in Healthcare IT. He's a closer, and you really don't want to call him unless you're ready to bring out the bazooka to bag some big game. When I started Fistful, I checked four references on Tim - his wife, his kids, his pastor and a client. The references were great, even if it sounded like they were reading from a sheet of paper. I just chalked that up to them being "detail oriented" in their feedback....

49 Comments

  1. Paul Hebert says:

    Having been in sales for 10 years and done pretty well I know it’s hard work. Hard, grinding work. If you’ve never been in sales it is hard to understand how you have to be “on” 24/7 with the client – even when you can’t stand them – or they are rude, insensitive, etc.
    But the one thing no one internally really gets is the risk involved with sales. No one has more risk associated with their job than a sales person. They have the benefit of money when they do well – and getting canned when they don’t. And they don’t have to do poorly very long before they are told to hit the bricks. Would anyone internally want that risk? Doubtful.
    Not to mention the transparency associated with sales performance. There are few if any jobs in any company (CEO included) with such transparent metrics on performance.
    Everyone in the company knows who’s selling and who isn’t. I don’t think many folks would like to have their performance review put up on the white board or on the company intranet.
    Sure – there are probably some folks that fall into big accounts or big sales – but those same folks could also be on their butt next quarter.
    It’s kinda like the character in “a few good men” – you want those sales people out there selling – and you want them to take the risk, and put up with company-wide criticism on performance – ‘cuz you can’t handle it.
    Walk a few months in a sales person’s shoes and you’ll understand the pressure, risk and the reward – of doing a very tough, tough job.

    Reply
  2. Dawn Hrdlica @dawnHRrocks says:

    Working for a sales driven company (direct mail advertising no less)—I can say:
    **Sales is HARD
    **Sucessful sales reps deserve to make TONS of money for the risk they take on. Operative word is successfull…
    **Don’t knock it till you try it…
    **If your C-Suite doesn’t get that—-best look for another place to work because you have officialy fallen into a rabbit hole where up is down and down is up…..

    Reply
  3. Tim Tolan says:

    Paul and Dawn: I agree! Sales is very hard, risky and not a cakewalk by any means. Companies that don’t get that will always be behind the curve in revenue growth, retention of revenue producing sales professionals and in keeping and market share. Pay ‘em well! Always! Thanks for your post.

    Reply
  4. Thank you.. very well put. I was laid off from my last sales position and when I went for over a year with not finding a new position, I made the bold move to start my own company.
    Here’s what I found: Companies either weren’t hiring sales at all or were hiring commission only sales people. I may be in the minority, but I think companies who don’t pay a base salary to their sales people essentially are discrediting the profession. I’ve been a sales professional for way too long to give my expertise away. Sales is more than “order taking”.. there’s a lot involved in developing and maintaining the relationship, etc.
    My other current “ire” with companies was brought up in a conversation with my husband who is also in sales.. he had a great year last year – one of the top earners. His reward? Being told that he made “too” much money and that the bonus structure was being changed. (Insert Captain Obvious statement here).. well, if he made a lot of money, doesn’t that mean you, the company, did as well??
    I agree, Tim.. all the non-sales folks out there who think our job is easy and overpaid.. grab a territory, go out there & let’s see how you do.

    Reply
  5. Brian W. says:

    I don’t really see why this argument is only being directed towards salespeople. If you deliver vastly more than your peers, you should be paid vastly more. The department you’re in shouldn’t matter. It just happens that sales performance tends to be easier to quantify than other positions.

    Reply
    • Alan says:

      You sir, are obviously an idiot.

      Reply
      • Folwarr says:

        What kind of idiotic reply is that? Brian’s comment is spot on. Here’s proof that you are the fool, Alan. Your post added nothing to the topic and didn’t even challenge Brian’s comment. Some people…no wonder our society is in such a shit state.

        Reply
    • Garrett K says:

      I partially agree… however, most sales positions are based solely on commission. Most other positions are based on salary or hourly. While I do agree that for the latter position there should be SOME bonus structure set in place, there’s a FAAAAR greater downside with a sales position. Since most other positions ARE structured as salary or hourly rate, there’s a cushion, and, realistically, no downside. For sales positions, if no sales are made… that can mean the difference of a person eating, or not eating. There’s a MASSIVE downside. So if a sales person kicks ass at what they do, they should be vastly rewarded.

      The further point is – without something being sold… nothing happens. Period. As mentioned in the article, there’s a major ripple effect – as something gets sold, it triggers OTHER parts of the business to actually happen. If people aren’t selling, then it creates a massive downside ripple to the rest of the company, and the rest of the departments don’t ‘happen’.

      So the success and failure of the company, essentially, rests on the shoulders of the salespersons.

      That pressure (personal success & failure, as well as company success and failure) resting on the shoulders of a group of a few people… I’d say that deserves a lot greater upswing of pay than most other departments.

      Reply
  6. August West says:

    I fully agree. Sales is a difficult, at times gut wrenching profession. I don’t disagree with all of the comments above. The only thing I’m curious about is how for years, HR people tell the rest of us that monetary rewards are not the best motivators. Most employees, no matter how hard they work or how much they contribute to the bottom line must be satisfied for 2 – 3% per year.
    What makes sales people, executives and employees in the financial services industries different?

    Reply
  7. Tim Tolan says:

    Kristen: I too, have seen where sales people did such a great job and made a lot of $$ – the reward was to cut back on their compensation or cut their ability to make good money moving forward. Not smart. Nope! That is a lose-lose proposition.
    Brian: I wrote this article to make a point that in most companies nothing happens until something is sold. I strongly feel that sales people that deliver top line revenue for a company should be highly paid. I also feel that anyone in a company that over-delivers in other departments should also be rewarded for their efforts.
    August: As I stated earlier – the biggest difference in the functional roles in your reply is that sales people deliver revenue – the lifeline to help companies grow and make more profits which benefits everyone else in the company and the shareholders for the financial risks they took by investing in the company. The CEO and other senior executives usually make their $$ on equity as the value of company increases. I still feel the sales team (if they deliver) should make a lot of cash compensation.
    Thanks to all of you for your comments!

    Reply
  8. Todd Rogers says:

    There’s nothing preventing a numbers-producing sales producer from firing his employer. Most compensation plans I’ve seen have a fine-print clause stating that management reserves the right to change the plan at any time for any reason. Conversely, the rep. usually doesn’t have such leverage. But, if he or she is truly good and consistently produces numbers, then all the rep. needs to do is stare too long at the door and the boss will probably step-up. Maybe not, and said rep. can replace his employer.

    Reply
  9. Tim Tolan says:

    Nothing wrong with that at all. It happened to me many years ago when I was a Regional VP of Sales for a SW company. Four RVP’s were hired to help turn the company around. We helped take the stock price from $3.75 to over $21.00 in 18 months. After we reached our goal – we were all asked to take a cut in compensation (the CEO started to get greedy). We all fired the company and left withing 60 days. Firing your employer when things like this happen is sometimes the only option you have! Great point Todd.

    Reply
  10. Ann Bares says:

    Great post, Tim. Those who can’t understand and appreciate sales rewards ultimately and simply don’t get sales.
    As you say, nothing like a couple of months in the sales trenches to take care of that!

    Reply
  11. Great article! Without sales, there is no business. Period. I agree with some of the comments, that is, if your company does not reward your sales efforts… find another company!

    Reply
  12. Buildings are quite expensive and not every person is able to buy it. Nevertheless, loan was invented to support people in such kind of cases.

    Reply
  13. Sales Sucks says:

    Sales is a field full of morons and former college athletes. No salesperson scores over 1200 on the SATs, and they have no tangible skills or qualifications. Salespeople make a ludicrous amount of money to make phone calls and hang out. It’s not work, it’s just conversation. Any middle school student has the “skills” to be in sales, as no education or qualifications are required. It’s just talking. You are a bunch of overpaid goons. You couldn’t do an engineer’s job for a day, but I’m sure an engineer could make a few sales (especially if you are a lease-based company). Ohhhh, resigning an existing customer? How’d you do THAT!? I guess you deserve your company car, trips to Jamaica, and all the other bullshit. Bottom line: salespeople are only as good as the product they are selling and the territory they are assigned. Fungible morons – anyone can do your job!

    Reply
    • Jenkins says:

      It’s certainly true that an engineer could get along as a sales rep longer than a sales rep could do the job of an engineer.

      The error in your thinking is that this is very relevant to what either makes.

      Supply and demand dictates what sales reps – and everyone else – are paid. The exception being government employees of course.

      What is anything – or anyone worth? Answer: Only what someone will pay for it/him. If someone is paying a sales rep $200K / year then that is what he is WORTH! There is simply no other valuation that means anything.

      But here’s something for you to think about: There are two kinds of jobs:

      One is where you have pile A and it has to be moved to pile B.
      – Engineering is a job like that in general. So is accounting. So is programming for the most part. They give you a workload and your job is to muddle through it and hand it in. If you weren’t there to do it, the guy next to you would do the SAME job. In individual cases where there IS meaningful additional value provided by someone in these disciplines it WILL result in much more pay.

      The other kind of job is where your PERFORMANCE is measured in meaningful RESULTS which are highly variable from person to person.
      – Professional athletes are like that. Sales reps are like that. Movie actors are like that. The results can be SEEN /FELT and MEASURED and are highly dependent upon individual PERFORMANCE. In fact, these results are always tracked and are generally published in some way – either publicly or within an organization which adds a unique pressure to perform well.

      Sales reps are HELD ACCOUNTABLE for this individual performance whether GOOD OR BAD.

      Reply
  14. KD says:

    Sales Sucks –
    you’re kidding me right? I’m not a Sales Pro and I’d love to say it’s easy – but it’s not… It’s one of the hardest things to do and the best sales pros get what they deserve because without them none of the rest of us – HR people, engineers, etc – are employed for very long… They have to sell to get revenue in the door.
    It’s not easy. Nice rant though….

    Reply
  15. Tim Tolan says:

    SS: Why don’t you quit your job today and see how well you do in sales? Sales move the revenue needle of companies and allow companies to hire top technical, delivery, finance, operations and others who provide tons of value to the organization. However SS, let’s be clear, nothing happens in a company until a customer buys a product of service. Nothing. Nada.
    Without sales people companies would have to place their products on a shelf and just HOPE someone decides to purchase their products. That’s not going to happen. never.
    In sales, Hope is Not a Strategy – never will be.

    Reply
  16. “Get rid of all sales people in your company and just wait for the bottom to fall out” – true enough. Get rid of all your operations folks and watch the same thing. Your miracle salesman might make a first sale but she’ll never make the second after the order doesn’t arrive. Or get rid of your finance folks and watch the company fold when vendors don’t get paid.
    Sales is important and yes, sales is hard. That doesn’t mean that it’s the only important job in the company. Sales drives revenue but revenue only one step in the profit equation.
    In my opinion, the resentment toward stereotypical sales compensation is not just jealousy (though there is some). It’s also frustration that the comp structure so often drives bad behavior. I can’t count the number of times I had to fix an over-sold project. Deliverables promised that couldn’t possibly break even much less show a profit. Sales made “as an investment in the relationship” when there was no realistic likelihood of any such thing. Decisions made without regard for the risks and costs being created in other areas of the organization. Salesmen who perpetuate the “revenue is all” myth are a risk to the company. (And that doesn’t even touch the sales made under ethically-questionable circumstances.)
    Of course, telling a salesperson that he’s selling unprofitable deals means admitting that the comp algorithm was poorly designed in the first place. How many managers do you know who can admit that mistake? Easier to use the “making too much money”/market-pay excuse to rebalance the sales costs to the value actually delivered.
    There may be a few companies running a bait-and-switch in their comp plans. I suspect that others just realized they were paying dearly for the privilege of losing money.
    Okay, I know that the post was a good-natured rant. Sales is underappreciated. Get over it. Every department feels underappreciated. And they’re all important. That’s my counter-rant, anyway.

    Reply
    • Erock says:

      Mike R. I totally agree with your rant. A company is a circle all parts are equally as important. You cannot do anything in the company without all parts of the company working together. Far too often have I experienced the errors you talked about caused by salespeople over promising or giving me the line we have to loose money on some to make money on others or we have to take this at a loss to get any other work from the customer. However if you have a really good salesperson they will never do those things! The mantra I find is that sales attracts sumbags because of the money. They all think they should get these crazy commissions. Something along the line of “Power draws the corruptable” I was in sales for three years and was the number two the whole time which was fine for me. I never was pushy or slimy just laid back and took care of everyone ethically and equally. I can tell you it was easy! Super Easy! I left because of the way consumers are now they have delusions of grandeur and think they are a king/queen and should be treated as such while getting the lowest price. News flash Kings and Queens are not cheap asses they pay for quality and service. Fire the crappy customers and only take work you make money on, you will save on time (time=money) and you will make money on everything regardless. Whoops went into another rant. Sales people come into companies thinking they crap rainbows and should be given pots of gold to start, the time is now to put them in there place they are the same as everyone else. Besides if your a totally online business you don’t need sales people just get high enough on a google search with your web design and people will buy your product! (Hint: web designers are not sales people)

      Reply
      • Jenkins says:

        “A company is a circle all parts are equally as important.”

        Should the janitor make as much as you then?

        All the jobs are important but the fair market value of the contribution of different PEOPLE in the company are NOT equal and MUST NOT BE PAID EQUALLY.

        Everyone should not be paid equally. They should be paid based on their fair market VALUE.

        Consider the differences between Soviet East Germany vs West Germany, Old China vs Hong Kong, North Korea vs South Korea. Which ones would you have rather lived in?

        These are examples of societies that said everyone is PAID equally vs societies where FREE people are free to bid wages for services – just like you do everyday. You spend your money according to it’s value to you. You don’t give a damn if the people at one company make less than the people at an other – you fork over more money for the things you VALUE.

        Societies of any kind – countries or companies – that violate the free market generate CRAP and the whole thing breaks down and the result is misery for everyone.

        Reply
  17. Robert says:

    I agree with the 100%… Salespeople are the backbone of a company and few people realize it. Without them, there would be no business!

    Reply
  18. Good post, it was good enough that I took some notes! Go sales!

    Reply
  19. Tim Tolan says:

    Robert and Sales Manager Training:
    Most people that have ever run a business understand that nothing happens until something is SOLD. That does not mean that other key people in the organization don’t matter. That’s not the point. However, without sales – there is no business. Period.

    Reply
  20. Manuel says:

    Hi Sales Sucks:
    I am a sales professional and an engineer. I can assure you that I am not a jock, earned well over a 1400 on my SAT, and earned BS and MS degrees in Computer Engineering from a strong engineering school (Carnegie Mellon) where I graduated near the top of my class. I love engineering and that is precisely why I am in sales. I sell very high end computers that I helped design as a I started my career as an engineer. I want to learn how we can make computers better for the world by immersing myself in client environments.
    I understand where you are coming from and let me assure you that the most successful sales people that I know in technology have strong technical backgrounds. Most customers in technology are straight shooters and won’t give non-technical people the time of day.
    Having said that, sales is not easy and not anyone can be successful. From the customers point of view, you have to be able to synchronize everything from finance, legal, product requirements, support, and get everyone that matters at your client and in your company to want to work with and trust you. There are a lot of things out of your control and there are no hard and fast rules. I am not saying that sales is harder than engineering. I am not saying engineering is harder than sales. They both require different skill sets though.
    At first thought, I would tend to agree that I am relatively overpaid compared to other functions in my company. Really the sales person is nothing without his support structure and product. Having said that, the engineers and support structure don’t get paid if the sales person can’t close the deal. The relationship between sales people and their organizations is symbiotic. In the end though, it is in the engineer’s best interest to have his sales person highly motivated to bring in more profitable revenue so the engineer can be compensated more. Therefore, at a company with limited resources (every company) more compensation is going to go to the sales at companies that are interested in driving profitable revenue (most companies).
    A problem I see is that both sales folks and engineers act like they are king of the world and don’t need each other. My hope is people reading this will develop mutual respect for one another and realize that teaming with one another is the best thing for everyone involved at the end of the day. Check your ego at the door, enjoy learning from one another, and have fun coming up with ways to serve outstanding value to your clients! If you can embed this attitude across your company, it will be successful
    Thanks,
    Maneesh

    Reply
  21. Will says:

    Isn’t there a chance that if a bunch of people on the sales team are making large amounts of money, it’s too easy. I understand that there are good sales people, but there are also good products. I worked on the other end. I would buy things for my company from sales people. Most of the time the sales people were useless. They knew nothing about their products. Would miss quote prices and mess up orders. But we still bought from them because they were the only company that offered their services or they were much cheaper than any competitor.
    These sales people could have looked like geniuses when it was really the back office that was keeping the accounts alive.

    Reply
  22. Andy says:

    Very biased opinion written by a sales person.

    Reply
  23. CEO says:

    I am a CEO and am currently paying salespeople more than me and am perfectly happy to do so. However, we are also looking at repositioning our compensation methodology so that everyone in the company who works hard and performs well has the ability to impact their compensation.

    Tim, while sales people are important and probably even underappreciated, I disagree with the ego salespeople have that ‘nothing’ happens until a sale or that revenue is THE most important thing in a company. First, sales people have to have something to sell. That generally comes from an entrepreneur with an idea, which then goes to some kind of ops and marketing team to get ready for the customer. Often, many things happen before the sale.

    Additionally, I would rather be out of business than in a business with lots of revenue (because we have great revenue generators) but no profit. Our salespeople are top-notch, but we’ve had to really work with them to get them to understand the difference between a sale and a profitable sale.

    Finally, I will recognize the risk salespeople undertake if all salespeople will acknowledge the responsibility that comes with being responsible for the livelihood of all the staff and their families.

    Good article and thanks for the post, now…get back to work and sell something! :)
    CEO

    Reply
  24. Steve Bazdmeg says:

    Just my two pence worth. I’m in sales, have been one of those “high earners” and I’m a member of Mensa. I wonder if that unthinking engineer could qualify for that?

    Reply
  25. Brett Ferguson says:

    I read with amusement this lively and educated argument about one of the oldest duels in modern corporate times. Being an engineer / project manager for 10 years, and business owner now, at 36 years old in the tech industry, I’ve met lots of fast talking well dressed salespeople who walked the walk and the talk. I worked ‘for’ them most of the time (you can tell they assumed that downstream departments are subjugate… and that’s bad culture, period)

    The power structure of sales having more leeway in most organizations than any other department, is not just encouraged by management to drive revenue, it’s part of the culture of sales *people*. Sales are encouraged to push the company’s products toward where they see the money coming from. That usually happens, not as an effort to evolve the company’s products into better ones, but as a way to sell the products with biggest commission. Think products with monopolies and 50% margin. In my industry it’s Cisco, Tandberg, Printer Toner, AMX, Crestron, etc. In your industry it might be high value cars, or the like. That’s where the ‘best’ salespeople gravitate… tell me if I’m wrong?

    Unless a salesperson’s aims are to build long relationships with repeat clientelle, an unchecked sales force can tear a company apart by chasing the carrot at all costs. From my experience, that includes ignoring directives from management to sell core products that the WHOLE business can support, to ignoring complaints from other departments in an effort to capture more commission, to glossing over due diligence to get more jobs ‘done’ in a given period. I think that’s what annoys most people who have to ‘clean up the mess’ left by overzealous salespeople who don’t consider anything beyond themselves and their next commission cheque. Now that’s not all salespeople, but it’s always a few bad apples that sour the batch…

    I believe sales in general are elevated to a higher place than is deserved. In most western countries it’s not the people who make stuff work that get the best pay (except at Google and in some engineer-entrenched countries like Germany), it’s the people who bullshit about what it can do who get the best pay. It’s the people tasked with ‘selling the dream’. Chasing the almighty dollar has its pitfalls, and the chaos some salespeople leave in their wake has a bad cultural effect on a lot of organisations and even governments (think of the sales pitch any interest group comes at you with).

    Remembering that the short term payoff is only one part of the equation, would serve many salespeople well. There ARE other people involved in your ‘sales process’, and any CEO worth their package, would be well aware of this. These people include:
    1. The designers/engineers who see and fix the oversights made while ‘selling the dream’ (were you awake during the dream?)
    2. The managers who have to act as go-between for all the affected departments, and smooth over the chaos.
    3. The accounting and support personnel who have to deal with angry customers who got sold, nay lied to.
    4. The CEO who you all hate earning more than you, because he/she obviously got to where they are by lying their socks off just like you, and oh wait, that makes YOU the jealous ones.

    Sorry if this is a bit too close to the bone. But hey, go sell ice to an eskimo… I’ve heard there’s good commission in it! :D

    Reply
  26. Mike Batton says:

    Yes, without sales people there would be much less revenue. Absolutely. A strong sales team is obviously an important and vital roll to any company, but that isn’t the question being asked, is it? The question is whether sales people are overpaid, and the answer is unfortunately a resounding yes in many cases. To make the argument that excessive wages are deserved because “it all starts with a sale” is disingenuous at best. First, let’s takes at where it all REALLY starts, which is with a vision, provided by the founder(s) of the company. This vision is then organized and implemented by everyone from the executive team to engineering and design to operations and the person that empties out your office’s trash cans at the end of the day. These are ALL key, fundamental jobs in a company, and vital to the existence of any business as a whole. It starts with your sales? No, it starts with the product that you sell, and made possible by the operational team that delivers on the expectations that are set. Sales help a company succeed, yes, product and development are the reason many companies exists. That being said the self-important, prima donna attitude displayed by the author of this article doesn’t surprise me at all, and is all too common amongst sales people.

    So why DO they get paid more? Because of the incentive to overperform and make the company more money. It’s a completely valid reason. The people who are irritated over this are those like myself who work just as hard, not only delivering on their essential duties, but also over performing day in and day out to improve a company’s internal process as well as the value of the product itself, only to be passed over for a raise time after time while the sales team continues to rake in huge amounts of cash. I know from a firsthand basis just how much complexity, tact and creativity goes in to the work I do, and to be continually outmatched in pay by a group of people who barely know how to write a coherent e-mail, let alone do anything technical or imaginative, is very frustrating. Are there intelligent sales people? Of course. But when all is said and done sales person is still an unskilled, easily replaceable position, and the fact that my company is full of absolutely moronic sales reps only helps to serve my confirmation bias. Yes, the job can be very grueling at times, but this is simply the tradeoff for holding a position that just about anyone with opposable thumbs can do. Just ask landscaper. So am I jealous? Maybe a little, but more than anything I’m annoyed with what I see as an unfair allocation of of the budget…c’est la vie.

    Reply
  27. Zeeshan says:

    A CEO once asked me what I thought his job was. I went on endlessly about growing rev year in and year out, shareholders, acquisitions, vision, mission blah blah….at which point he stopped me. ‘I’m a sales rep’, he declared, ‘with a much bigger quota to hit’. The most down to earth (and true) description of someone that is essentially tasked with selling more to continue increasing revenue for the business.

    Without sales, you have no revenue! Without revenue, the operations people, finance, R&D….NONE of them would have a job. What good is talent and a great product if nobody is buying it? The sales people make that happen; the breadwinners who pay the bills so everyone can continue whining and prancing around in their roles and lives. And if you think it’s easy, you should try it. Seriously, it’s easy money right? Make everyone laugh.

    Reply
  28. John says:

    What came first the egg or the chicken? Not quite to that extreme but you can use this argument.

    A product can sell it self with simple marketing. The revenue will not be great but a product can still sell itself. There is no argument anyone can come up with against this statement.

    At the same time I do not agree that sales should make a lot less money than they do, however sometimes things need to be adjusted.

    Sales people who keep selling a product that essentially needs to be changed by product development or the operations team has to change its whole process to deliver need to be canned no mater how much revenue they bring. That sale person makes a call sells a “dream” like someone has already mentioned that essentially needs to be created by everyone else in the company. There is the issue. They get their commission while operations and product development is busy reinventing the wheel. But this points out to the obvious flaws in the modern corporate structure.

    Remember, without a product your position does not exist. And no mater how much you would like to think otherwise, a product can always sell it self. A good product that is, thank modern technology and communications for that.

    I still believe that sales are essential, but many sales people need to be humbled. Make all the money you can, but do not forget that there is a team out there that makes it happen for you.

    Reply
  29. Matt says:

    This is a very biased one sided argument based on opinion. Just saying “that’s a fact” does not make it true.

    There are good salesman and bad salesman, much like any department. See how long you keep that customer if the accounting department under performs. A few incorrect billings or tardiness in sending out invoices could be enough to drive any customer away.

    This article seems to make the assumption that all products and companies are equal and the only difference is the salesman. I would be shocked if anyone believed that.

    I do find the comment in the CEO section amusing. Claiming CEO ego sadly gets in the way of a salesmans earnings potential. To me this whole article is based around ego. Perhaps I should flip the question, if being a CEO is so easy why doesn’t everyone do it?

    Reply
  30. Marc says:

    In regards to sales people there are different levels of sales. Some require that you grind and sell on the phone, others require a very technical approach, others are more corporate high end sales, with others dealing with smaller companies. So there are “different” types of sales people.

    I work in a commission only role and choose to do so to make more money. The risk is high, the rewards are high and you have to work your butt off to be successful. I work in advertising and there are reps that like to take clients out and spend time picking up their dry cleaning, but I promise you 90 percent of those people will fail if they are new reps, even reps from other industries with experience.

    I am constantly thinking about my next sales looking months in advance and how much I need to bring in and how I am going to forecast that and what trends are hitting in that month. Then I have to deal with internal people that dont have the same drive I have on getting things done, because their lives are not dependant on it.

    Put a person on commission only and you have to perform. Lets see how many people would take that position…..very few I would imagine.

    Every department is important to making things work, but only dependant on their market value. Good sales people are hard to find were as I can find many people that will clean the building or to answer phones. They deserve to get paid, but only what the market deems correct and are also important to making to company cogs work!

    Also sales can be made much easier with a strong product, great idea, or good promotion, but it is not impossible to sell an average product….far from it if the price is in accordance. Then you are selling on price rather than value, which in this market seems easier at times when they just ask for the price to cut costs, even if they are making an error in not seeing the true value.

    Interesting article! Thank you.

    Reply
  31. Fantastic article. gets straight to the point.

    I actually think sales people are UNDER-paid most of the time, at least that seems to be the trend these days – and those that do get paid what they’re worth likely put up with way too much bitching from the “management” than they should have.

    That is NOT to say others should be underpaid, but I’ve rarely ever seen operations (even crappy operations teams) ever take the fall for a project not delivered on time, or a project not being profitable (despite being sold at an obviously profitable price) – it’s always the sales person that’s blamed because “his job is so easy, all he does is to sit and sell”. And this trend holds especially true for companies in the web design field, which is where a lot of my selling experiences comes from.

    Hmm – I wonder what the guys in execution do – do they stand and execute? ;)

    At the end of the day it’s SALES that brings in NEW projects (remember, new is different from repeat) – and new projects are obviously what any company would prize the most. Sure, repeat business DOES count, but new business that can equate to repeat business also counts just as much, if not more.

    Some of the posters here (not surprisingly mostly from the “operations” side of things) have made the point that they make things work, fix the sales guy’s “overselling” et al. Well, I can say from personal experience that I’ve worked a LOT of times with execution teams that just couldn’t get the job done – despite the project being sold at a decent price, despite the project being EASY to do – and despite the fact that other companies were doing it at a lesser rate – and profitably at that. However, the CEO in all cases ended up blaming sales for it while mollycoddling the operations people through the whole mess.

    Why, you ask?

    Well, because said sales person (read me) could get his job done quickly and efficiently without having to spend a bunch of time in the office (or overtime) while the operations guy spent hour after unsuccessful hour trying to get work done (which he had agreed to along with the sales person in the first place) and usually not succeeding.

    I’ve often been told to “help” the operations guys finish up their work – only problem being, I’m getting paid less than half of what operations is, and I’m doing my job – and operations isn’t.

    Something’s not quite right, eh? ;) And this sort of thing happens a lot more than most people realize. . .
    And let’s not EVEN get into the case of smaller companies where it’s usually the sales people who are forced to wear many hats (lead generators, marketers, content writers and sales people) – all for a LESSER wage than the so called skilled operations guys. . .And why? Oh, didn’t you know, his job is easy – because he gets it done so fast!

    It’s amazing how some folks still think time spent and results are one and the same thing, but it happens more than you’d care to believe.

    And last, but not least – yeah, all of you that think sales is a breeze, well, let’s see you actually get out there and close some deals as opposed to whining about tech specs, whittling down the proposals to the minutest detail, and doing everything possible to let the customer go so you don’t have to work, hehe. . .

    Reply
  32. Completely agree says:

    Ah, and don’t EVEN get me started on the CEO ego’s — how DARE a sales person even ask for commissions? How DARE he think of out-earning me?? I could literally write books on the number of times I’ve seen good sales people screwed over on their commissions etc by their companies. . .

    Reply
  33. Entrepreneur says:

    I’ve seen and experienced it first hand, no sales = no revenue = nothing happens = nada.

    For all the techies or operations people who think that selling is easy, pick up the phone, talk and try selling whatever product you have. If you don’t have the gut to even do it or don’t know how to sell, stop complaining about sales people paycheck. Or if you really want, move to sales department or start your own business, then you will start looking into sales with a very different way.

    Reply
  34. Pablo says:

    Hello Mr. Tolan;

    A deep debate has arised recently in the company I work for and I would sincerely appreciate your point of view. Sales people make as much as 4 or 5 times as the other employees make. While I agree that the more your bring, the more you should get paid, it is not entirely true to say that the success of a sale is wholely dependant on the salesperson. I work for an engineering firm and most of the contact with the costumer and most of the acceptance is dependant on the engineers that directly work on the project and close with the costumer. Yet, the engineering department gets paid a fixed bonus at the end of the year that is not related to the company profit and the sales department gets a massive bonus largely tied to the profit. It seems unfair to think of every other employee as a “machine” that only builds products and services behind a curtain and the sales person is the brave and shining star that goes out to the world. There are many many people involved directly in the success of a sale that go unrewarded.

    I’d deeply appreciate your comments on this.
    Greetings!

    Reply
  35. Decan Frost says:

    Let me ponder a Question to all. Say you sell sell sell tell your blue in the face. and the customer never gets that product. How much money did that sales rep and the company make?????

    I will answer the question for those of you who cant figure this out..

    ZERO is what was made plan and simple fact!!!!!

    Reply
  36. Rock42 says:

    I’m an engineer by training. I’ve held both sales and engineering positions. I can tell you that the sales role is BY FAR the harder of the two positions. Why do I do sales now? I enjoy it for one, but all else equal I do it for the potential to make A LOT more money. Bring engineering and sales to pay parity, and I’ll chose engineering any day – it’s easier and frankly pretty fun. But then, who is going to go out and sell for me?

    I’ve also lived in both of these two kinds of organizations: one where sales and marketing is strong and engineering is weak, and one where sales and marketing is weak and engineering is strong. The first always suffered customer sat and product issues, but made a lot of money. The second had really smart people on staff working on things no one cared about and was constantly on the verge of going out of business. I can tell you without equivocation which of the two is better to live in…

    Also, in my experience, when finance is weak someone is about to get indicted. However, without sales and engineering (or your equivalent product / service / function generator), there is no need for finance.

    Reply
  37. Adam Elder says:

    Sales are the life blood of any organization/company. Without sales all other departments are no longer in demanded. No Food, all organs in the body eventually shut down.

    Reply
  38. Alan Gehami says:

    Good sales people deserve what they earn otherwise they will go elsewhere and earn what they are worth. Being a sales professional is very similar to being a pro golfer or tennis player, YOU need to earn each and every paycheck.

    Reply
  39. Justin says:

    Insurance agent here. My pay is fully-based on commissions (no basic salary).

    I’m glad my company knows how to compensate its salespeople.

    Unfortunately the other departments don’t seem to think it’s fair. Oh well…

    Reply
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  41. CalgaryEng says:

    Just wanted to respond to the comment from an engineer. I am an engineering grad myself who worked both as technical support and as a project engineer. Sales is what I prefer only because I like the adventure and the challenge. Sales is a much harder job and lifestyle, but offers more time flexibility. Sales is far more stressful – rejection, good service, poor service, no reply emails, creative networking, successful coffee meeting, un-happy customer, loss of a customer, new opportunity, taking responsibility, generating leads, negotiating price, negotiating future work, communicating with co-workers what customers want, tell customers what they can and can’t have, getting pity from engineers that I am not an engineer, heading home without any progress, getting a meeting, showing up to a canceled meeting, market research, identifying new opportunities, making sure the right product arrives on time, justifying expenses. By the way, Engineers sell too…….just themselves. People assume sales people do not have technical expertise. Sales people have people skills and the technical expertise to get the sale.

    Reply

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