How to Hire 100% Commission Sales Reps

Is the 100% Commission Sales Rep a Thing of the Past?

Hiring 100% commission-based Sales Representatives is more expensive than offering a salary, and it shifts your focus from selling to recruiting.

If you are reading this blog, it is likely that you are committed to an outdated sales model that makes it challenging to hire experienced elite sales athletes in your industry. Hiring top sales performers on a base salary + commission plan is hard enough for companies, but hiring 100% commission sales reps who are talented, confident, and can see the big picture of a pure commission-based salary is even harder…if not impossible.

Treeline launched in 2001 and has helped many companies hire 100% commission-based sales representatives, but our rich experience has taught us that this model in the business to business market is simply no longer effective. With the change in sales techniques, strategy and technology, the 100% commission sales model has become inefficient in the business to business selling environment. While it still may have a place in the business to consumer market this old school methodology struggles to compete in the 21st century.

The two greatest motivators to building a 100% commission-based sales team are cost savings and reduced risk, but these are both misconceptions. Sadly, both of these theories produce the opposite effect. When you keep your sales team’s compensation tied exclusively to commission, you actually have greater costs associated with sourcing, recruiting, hiring, training, and ultimately incur greater turnover. This is a challenging model to sustain and it puts your brand at risk because you are constantly introducing prospects and new inexperienced employees.

I started my career as a 100% commission-based sales recruiter and I would like to share some of the pitfalls and challenges I have learned over the past 22 years.

1. Tremendous Recruiting Effort With Little Return

To put it bluntly, very few people want this type of job. So you end up with a candidate pool of the most desperate individuals, not necessarily the most talented. The only people that can consider a 100% commission-based role either have another source of income or a significant other or family member who can support them while they ramp up. It is not economically stable or competitive for sales professionals to consider working in this model. As a result you will need a robust recruitment effort and resources to reach out to thousands of people to get one person interested in your opportunity.

The year is 2023 and with inflation, interest rates and the rising cost of living, most sales representatives are not looking to take a risk on this type of position. They have other job opportunities to consider and your recruiting team will be at an incredible disadvantage.

2. Insanely High Risk

At Treeline, we have learned that turnover for this type of position is very high, and dedication and commitment to the company is very low. The most haphazard individuals may be available for this type of role, but they may not be the strongest sellers for your company. They may not even be well suited for a career in sales and for these reasons it is a very risky sales model.

Sales is already hard enough without having to incur debt while trying to build your career. If debt is incurred and your sales employees struggle to pay their bills, even the most skilled sales players will be forced to seek new employment. So, while you think you’re saving money by hiring 100% commission-based sales reps, you’re actually losing money and taking on unnecessary risk because you’re turning over more people.

3. Your Most Important Employees Are Your Least Loyal

We recommend building a sales team with employees that believe in what they’re selling and feel good about the company they work for. These employees are your brand ambassadors and should be the most important asset to your company.

Instead, you are investing time, money and resources into recruiting the most unpredictable employees on the market. Invest in your people and find individuals that are committed to the company, that believe in your purpose and that can sustain a career for many years. When you choose this route, you should expect to have lower turnover, more loyal employees, happier customers and increasing top line revenue growth.

4. A Negatively Charged Environment is Created

If you choose to hire a team of people struggling to survive and pay their bills, recognize that you are influencing negative behaviors that result in cutthroat environments. You may also find that your core values get lost because your sales representatives need to close business for unhealthy selfish reasons.

Hardnose sales tactics breed behavior that would not otherwise occur. This can turn your corporate culture into a negative, cancerous environment. It also requires more effort and more resources to hire just one sales representative and this becomes a vicious cycle.

5. Accountability

You are not paying your sellers a salary, so how do you ensure that they stick to doing their jobs? There is little functional accountability to produce results because your team can resign and leave employment at any time.

If you properly train talented sales professionals and pay them competitively, you can hold them accountable to driving the activity required to be successful in their job. If they learn the process and follow the sales model you have created, each hired employee will be successful and the company can build a repeatable, scalable model. You will establish key performance indicators and metrics to help guide your team to success.

6. Throwing Bodies at the Problem Is Not a Sustainable Solution

For a short time, throwing bodies at your sales challenges may work, but that method is unlikely to last in the long run. If you don’t understand the sales characteristics that best fit your environment, you will have little control over your selection process and low confidence in your ability to build an elite sales team. Sales teams need a road map to find success.

Understanding the soft and hard skills to be successful in your sales environment is a critical success factor for your company. Your sales reps need training, coaching and a clear understanding of the job responsibilities and activity metrics required to be successful. Then, they need strong, positive management that believes in what they are doing and motivates, encourages and holds them accountable for growing a world-class sales organization.

Now that you know the traps to avoid, keep in mind that hiring salespeople with the experience, passion and drive to succeed is no easy feat. Understand that there will be challenges, and remember to be serious about paying your sales reps based on performance.

If you’re trying to build your sales team and struggling to get momentum, contact our organization of elite executive recruiters. You will discover that we are far more skilled and consultative than standard sales staffing agencies. We can help you understand the sales characteristics of your selling environment, we will talk about the challenges you should anticipate and we will help you navigate the different compensation models best suited for your business. Have a look at our Compensation Calculator to consider the best compensation structure for your industry.

Call us today so we can coach you through a variety of different sales models and which one will be most effective for your sales environment.