Black Sales Journal

Whether it is before you start a new job, or if a known situation ever changes, you need to know how you get paid!  You cannot master the situation if you don’t understand it.  There is not mystery as to how sales professionals get paid, it is all about that ‘paper’.

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The most important aspect of a sales job is getting paid.  In the end it is about that paper! I am not talking about the money type ofpaper; I am talking about the written remuneration or compensation plan.  That is the most important paper out there.  Getting paid is important; as it is one way to keep score, yet it is also the way we eat and keep our families happy.

The objective of this post is to give those who need to know a basis to understand the basic remuneration systems in an easy, no nonsense way.  What is more important is that you learn your company’s system and “work the hell” out of it.

Remember, it is your right to work the system, yet also, it is good policy on your part to keep your activities in the spirit of the system as well.  Working the system is not cheating, and if you are within the spirit of the system, and you will still get your reward.

An important note for all remuneration/compensation stakeholders is that whenever commissions are involved, care must be taken to realize the volatility that can exist.  Sometimes this uncertainty is beneficial (higher earnings), and sometimes it can be detrimental.  In the end, as I said, it’s about the paper, but also the confidence you have in the company’s products and your own abilities.

7 Major Types of Compensation Methods

Companies have the right to do whatever is legal and makes sales happen.  They can put together a variety of different types of plans that stimulate gross sales, retain sales professionals, promote particular products, develops territories, etc.  There are significant numbers of Black sales professionals in each of these type of arrangements with many prospering.  Your ability to take downside risk will determine how you feel about these.

Having been involved in the design and approval of compensation plans from a company standpoint, much thought goes into them, as once they are out there, they you are stuck with them for the prescribed term.

Here are examples of the most popular and widely used plans:

Salary – You have a simple formula to operate under, yet no incentive to excel other than a performance review.  Salary is safe and secure with no upside.

Straight Commission – No base salary, no upside limit, and the downside can be “$0 dollars”.  The risk is with you, yet if you excel, and you must to work under this system, the “force” is with you.

Draw Against Commission - In this one, you have some subsistence in the form of a ‘draw’ providing an advance of commissions with an agreement to pay it back if you do not ‘earn’ it.  The employer is essentially loaning you money against your commission income.  You get the benefit of some subsistence but still have the risk of an downside and the benefit of an upside.

Salary Plus Bonus – A pay system sought after by many professionals as it provides a solid floor, while providing significant upside earnings paid periodically, often quarterly as a bonus.  Often using the components of a straight commission system to help determine the bonus amount.

Base Plus Commission – Similar to above, this is a popular method, tried and proven.  Fixed base salary with commissions paid on the system quarterly or more often.  Commissions are usually based on percentages of dollars sold.

Variable Commission – These are straight commission schemes that have percentages that vary with product, size of the sale, attainment of goals, etc.  Much depends on what the company is trying to promote.

Residual Commission – Commissions that are paid based on customer longevity once initiated.  Aggregate residual commissions can form a solid ‘base’ which provides a good income, and some stability.

There may be other methods of compensation, but usually it is based on some variation of one of these arrangements.  In almost all cases the compensation plan is in writing, and available to all sales professionals for study.  Don’t forget to study this item and even have discussion with some of the more experienced sales professionals in your sales unit.  You will want to know the nuances of this plan that makes for higher earnings.

How Much Guts Do You Have?

Obviously these different arrangements involve different risks.  Hands down the straight commission set-up involves the most risk and highest instability.  It is sales compensation in its purest sense.  You sell and you get paid! I never worked nor managed in a system like this, and recognize that many of you do.

There are combinations of these elements that make for remuneration systems that need the ability to emphasize particular objectives.

Example 1. A salary + bonus system that wants to reward customer longevity attaches a component which uses residual commissions to strengthen the bonus.

Example 2. A variable commission changes your percentage on sales of a certain product based on reaching a certain level of sales.  Let’s say you receive 8% commission on the first $100,000 of sales of widgets, which increases to 12% for all sales thereafter.  Once you reach the 100,000, you are rewarded with more from your great work.

Yes, It’s About that Paper!

I would make the suggestion that you get your organization’s sales compensation plan in front of you and study it.  Do the brief interview with your sales comrades to determine how to maximize it.

There are times that the organization’s objectives, and the compensation or remuneration plan are not in concert.  Rewarding the sales of products that are not profitable, or are in low supply are examples.

Know the plan and formulate your objectives and you can work efficiently and effectively by maximizing your efforts and your income.

Be effective!

This post is not meant to be an answer-all on interviews, but a simple notation of some sure fire questions that you will probably be asked.  The idea is to realize that most interviewers have not been formally trained, but will ask some questions either as a true test, or just because they are expected to ask them.  Don’t get caught without the good answers on these.

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The Black sales professional is subject to the same questions that others will face.  If you have been through several interviews, you are basically hearing the same questions over and over.  It is not that there is a lack of ingenuity on the part of the interviewers.  The interview process is a combination of observing the physical presence of the applicant, noting the reaction to your questions, and noting the quality of the answers to those questions.  The interviewer is attempting to envision you as a sales professional representing his organization.  That is the real test.

I am not going to cover the multitude of questions that you can be asked on an interview.  I will talk about some of the usual questions that you have heard before, and a quick general example of how they can be handled.

First Do Your Homework

Before you do anything else, do your research!  Know the company, and the duties of the job without reservation.  The web makes for an excellent resource for you to do this.

Check the organization’s web site to get an idea of their approach to diversity.  In larger corporations, they will have a diversity mission shown on their site, or at least their view of their diversity efforts.  This does not give you an edge, yet tells you this organizations investment in diversity and what you are up against.

7 Questions You Will Answer

I am going to cover 7 questions you will answer in the next job interview.  They may state them in a slightly different way, yet they are seeking the same information.

As commonplace as these questions sound, practice them and go in prepared to answer to them:

#1.  Why are you leaving your current job?

Do not ever criticize you previous employer or manager!  Whether the facts are true or not, this is a guaranteed way to not get a second interview.  Stay north of this issue by talking about challenges, larger product lines, better territories and products, etc.  This positive part of the interview might be the first question you get, so this chance to speak positively is important.

#2.  Tell me something about yourself?

As you practice this know the job you are applying for including the skills necessary to do it.  Know and practice your “elevator speech” on yourself. You are giving a brief synopsis of your social, educational, and employment background.  You will add to this some quality statements that set you apart from many others.  State clearly items that describe your drive, ambition, and desire to be successful. Example: “ I am a sales professional trained in professional sales while at ABC products.  I believe in hard work and the benefits of preparation.  My successful sales career has benefited from my study at ABC University with Marketing as my field of study…” Your statement should last no more than 1.5 minutes, and is always better followed by saying “…is there anything in my professional or educational history that I may clarify for you?”

#3.  Why should we hire you over the other candidates?  What makes you different?

Since you don’t know the other candidates, and don’t necessarily know, so spend your energy on the second question.  Talk about your results orientation, your ambition and drive, your record of accomplishment, and your vision for what you might do in a better territory, with a better product, or better support.  This question hinges on your ability to verbalize why you are better.  Practice your statement and delivery.  Example: “I have a wealth of relevant experience and education.  Most importantly, I have verifiable accomplishments in this same territory selling a product that, I believe, is inferior to yours.  I know the industry, and the customers, I just need the right product.”

#4.  What qualifications do you have which would make you successful in this business?

You are the expert on yourself and you have studied the job description and the company.  Your answers here should be designed to let you list the qualities which make you’re a good candidate.  You know the qualifications that will make you successful, now you need to be able to prioritize them and deliver a flawless speech that links together your qualifications and the position.  Example:  “ I believe my technical background coupled with my quantitative skills gives me great chance of success as a technical sales representative for ABC equipment.   I have a degree in mechanical engineering, and have had an a career selling technical products to the same clients that your organization depends on.”

#5.  What are your strengths and weaknesses?

Most interviewers ask it because they just think they should.  Some ask it because you might tell them you are an impatient being that could be prone to slapping a fellow employee.  I think that if it is asked, it should be on the basis of the interviewer trying to determine your ability to self-assess and even be critical.  This one deserves more practice than many of the others questions.  You don’t want to be known as a perfectionist, nor someone uncomfortable with detail, you want to always appear well adjusted in your activities and reactions.  Example: “One of my strengths is that I am persistent, with prospects and customers.  One of my weaknesses is that I always believe that there is a possibility of the sale even when I get rejected repeatedly.  I often, in the face of low odds, continue the solicitation.”  This one takes the sales mentality and gets strength and a weakness from the same essence.

#6.  If this position gets filled, would you take another job in our organization?

This is a basic, unadulterated trap. Don’t fall into it.  A true sales professional might want to be a sales executive, sales representative, or sales manager, yet does not want to be a purchasing person or a human resource professional.  The answer, if you want to be a sales professional is no.  I asked this question in the past, and was able to determine that the candidate wanted a job, not a sales career!

# 7.  Where do you see yourself in five years?

This question is designed to find out your career orientation.  Don’t let it be a trap.  Be prepared to answer in a way that stresses that you want to be successful as a sales professional.  You want to talk about what success might look like, and you might mention that at some point down the line you might consider sales management.  They want to know your intentions.  Example:  “I see myself being a successful sales professional with a profitable, well developed territory.  I would like to be your sales leader in revenue and product sales.”

As stated before, practice is important.  Landing that new sales position will involve more questions than these, yet you can be assured these will be asked.  Practice will give you the confidence that you need to answer these, and other questions confidently.  Good Luck.

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