Commissions: Good or Bad for Buyers?

Last Updated Sep 24, 2009 8:32 AM EDT

I just saw a TV ad for a local kitchen remodeling firm which touted -- as a primary reason to shop there -- that the sales staff wasn't on commission. The ad reminded me that most buyers look upon commissions with suspicion and distaste.

Many buyers (especially consumers but even some business buyers) believe that commissions create a conflict of interest. Rather than being committed to helping the customer, the commissioned sales rep is thought to be committed to making the commission -- regardless of whether the customer wants.

I suspect that this attitude is related to a dislike, among ALL buyers, for high pressure sales tactics. People don't like being manipulated and they don't like being forced to be rude. I think people believe (with some justification) that sales reps on commission are more likely to resort to high pressure tactics.

There is, of course, another side to the story. Commissions can also drive sales reps to be MORE helpful, in order to make a bigger commission. For example, I very much prefer shopping in stores where the sales staff is on commission, because I want excellent service and am willing to pay for it. The last thing I want, when I'm shopping, is to be forced to wander around a store trying to find somebody who will help me.

The reason I'm writing about this today isn't just because of the TV ad. I've been writing recently about Sales Performance Management software, which allows sales managers to fine-tune commissions to drive the sales of certain products. Such software lets sales reps check, right from their CRM program, how much money they'll earn on a deal.

The danger here is that such software could drive a sales rep to change the mix of a deal in order to maximize the commission, regardless of the best interests of the customer. Certainly that used to go on in the past, but because this kind of software raises the visibility of the commission, it's more likely to drive that kind of behavior.

Don't get me wrong. Personally, I'm in favor of commissions. In fact, I'll be posting some cool stuff about "100 percent" commission selling over the next two weeks or so. However, I am curious about what you guys think, so here's a poll.

Remember: nobody can track your response to these polls, so you're free to vote however you like.