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What to consider when comparing sales commission and packages.

If you are looking for a new sales job, you might be tempted to focus on the base salary and commission rate of different offers. However, there are many other factors that can affect your total compensation and satisfaction as a sales professional. In this article, we will discuss some of the key factors to consider when comparing sales compensation packages from different companies.

Benefits and perks Besides your salary and commission, you should also pay attention to the benefits and perks that each company offers. These can include health insurance, retirement plans, paid time off, bonuses, stock options, education reimbursement, and more. Benefits and perks can vary widely by industry, company size, and culture, so make sure you understand what each package entails and how it aligns with your needs and goals.

Quota and territory Another important factor to consider is the quota and territory that you will be assigned to. Quota is the minimum amount of sales that you are expected to generate in a given period, usually a month or a quarter. Territory is the geographic area or market segment that you are responsible for selling to. Both quota and territory can affect your earning potential and workload, so you should compare them carefully and realistically. For example, a higher commission rate might not be worth it if the quota is too high or the territory is too competitive or saturated.

During an interview, it is a good time to ask your respective interviewer to pull up figures from the past six months and also the year on year (YOY) results. This will give you a quick snapshot as to how the company is performing and if there are trends in the buying cycle of a company or sector.

Sales cycle and process The sales cycle and process refer to the length and complexity of the steps involved in closing a deal with a customer. Depending on the type of product or service that you are selling, the sales cycle and process can range from a few days to several months or even years. The sales cycle and process can impact your cash flow, pipeline management, and customer relationships, so you should consider how they match your skills, preferences, and expectations. For example, if you are used to selling low-cost, high-volume products with a short sales cycle, you might find it challenging to switch to selling high-cost, low-volume products with a long sales cycle.

You should therefore ensure that the bonus or commission structure for the role reflects the sales cycle and your attitudes. For example, if there is a long buying cycle, it may be more beneficial for your motivation and work ethic to have a split commission structure. This is where you will receive a smaller commission on the initial commitment or deposit and a larger commission when the deal is converted to a final and paid in full sales order.

Culture and values Finally, you should also consider the culture and values of each company that you are applying to. Culture and values refer to the shared beliefs, norms, and practices that shape how a company operates and treats its employees, customers, and stakeholders. Culture and values can influence your motivation, engagement, and performance as a sales professional, so you should look for a company that aligns with your own vision, mission, and values. For example, if you value collaboration, innovation, and diversity, you might prefer a company that fosters teamwork, creativity, and inclusion.

It is also important to note that most companies will have a contractual clause stating 'the company reserves the right to alter commission at any time'. If this is the case, ensure that the remuneration you have agreed on during your interview is clearly stated within your contract, especially if there are time constraints around this. For example, initial onboarding bonus guaranteed for six months.

In Summary Not all roles advertised with a larger basic are ideal. Although this will ensure a larger guaranteed amount per month as a minimum and give you better status when applying for mortgages and loans, it could mean that the expectation to hit commission is very high and perhaps not always achievable. Ensure you understand the scope of the company and its performance. More likely than not, money motivates sales professionals, if you venture into a role that does not meet your initial expectations, you could find a lack of motivation further down the line.

Written in collaboration with Linked In and Closers Ace.


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