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Internal Sales Cycle and the Base vs. Commission Dilemma

Expanding your sales team? Or, are you ready to pass the torch to a sales person?  Trying to answer the motivation question when considering the base versus commission argument?  Often times we consult with business owners struggling to create the right sales related compensation structure for their business.  We like to consider a few questions as we navigate this process:

Will a hunter or farmer be better suited for your business? Are you looking for someone who will close the deal quickly and move on?  If so, chances are you are looking for a hunter. On the other hand, if are you looking for someone who will cultivate existing relationships and spend a lot of time networking with potential clients, then you are likely looking for a farmer.

If your sales cycle is fairly short and you are looking for a quick closer, smaller base and higher commission may be the right motivator. If your sales cycle is longer, you may look for a relationship builder – someone who will network now, with more results in the long run.  In this case, a higher base with smaller commission might make more sense – it will provide your sales person with more financial predictability and low stress networking time.

Finding the right person for your sales team won’t be easy. It is a crucial decision – take time to evaluate what type of a sales person will fit the team best as compensation structure may be the driver when identifying and motivating that person.

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