This week,
two of my buddies told me
their companies slashed commissions
as part of their cost cutting.
What the F**k?
Commissions are NOT costs.
Yes, on financial statements,
they are often lumped in with costs
but commissions are, in reality,
cost of goods sold.
They are incentives.
They’re the cost of selling something.
You WANT to pay more commissions
because that means you’re selling more.
If you need to motivate your sales team,
if you need to sell MORE,
(maybe because you’re battling a recession economy)
commission percentages should INCREASE,
not decrease.
While we’re talking sales ‘perks’,
selling achievement recognitions
such as President’s Clubs and
other top Seller incentives,
also pay for themselves.
Salespeople only get these if they sell.
To cut these would be the height of foolishness.