Would You Fire Your Best Salesperson?
Best, in my opinion, means the most honest, forthright, productive, all-star company representative – AND they are performance based (on commission).
Performance based systems rarely fail because the individual gets a HUGE reward if they perform exceptionally well and little to no reward if they perform poorly in their activities.
Sometimes, businesses are tempted to put an hourly wage or lower commission on their sales reps because the best of the best are costing them a lot of money…right?
You have undoubtedly heard about the Pareto principle – often called the 80/20 rule – and in this case it would say that 80% of your revenue is coming from 20% of your salespeople OR 80% of your sales people are producing 20% of your revenue.
If a company fired their top sales people by putting them on a lower pay scale or hourly wage, they could lose 80% of their revenue!
While a great company or sales person can get a large sum of money for good performance, their competition is simply not producing the same results according to the Pareto principle.
How does this relate to pay per click advertising?
The entire essence of search marketing, pay per click advertising in particular, is performance based. Search engines thrive on the model and they are starting to command the largest portion of a company’s ad spend budget because the model is efficient and VERY profitable for both parties – the company doing the advertising, and the company hosting the ads!
The search engine is or can be a company’s best salesperson – where else can you be at your customer’s fingertips when they are actively seeking your product or service?If you enjoyed this post, make sure you subscribe to my RSS feed!