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welcome to another edition of agency scaling secrets i'm solomon timothy today's question that we're going to unpack is should i or should i not hire a commission only sales rep for my organization let's get started my entire career of running an agency entire career of being a consultant and having sales people work around the clock we've done it very differently than some of the new things that i hear modern day in a world of gig economy a sales person being only commission based is becoming more and more popular in many many instances like a real estate agent an insurance agent many industries only have commission based salespeople so why can't we take that sort of concept and put it into a digital marketing environment so i'm going to hopefully unpack this very simply let's say the left-hand side are full-time w-2 sales rep w-2 is just how we pay people in america if you're not from america we have so many partners all over the world that might be different it's somebody who actually is a full-time employee where you pay taxes they have taxes taken out of their paycheck and so on we call it w-2 over here let's call it 10.99 but that's the same as independent contractor or just call this commission only sales rep alright so let's unpack this so on the left-hand side you have a salary right you have a salary to pay somebody over here you actually don't pay anything right if they don't produce it doesn't cost you anything that sounds like really good over here you got benefits you got to cover benefits you got insurance 401 k and things like that so over here you don't have anything either so then finally you got to pay commissions when they close the deal right you have salary overhead lots of other things but commission this person gets a commission for doing the sales this might look really really exciting and say hey i could totally save a ton of money no overhead i don't even have to worry about real estate they're going to work from their homes and take the calls now what i've seen typically in this environment is that when it comes to training this person gets a lot better training because they're in the office or they're working with the rest of the team they learn about the company they know the culture they know what they believe in what kind of customers are a good fit and so figuring out the best long-term success of the customer to identify the best customers to really go figure out what we need to do to find more customers like that this training really comes into play over here typically they watch some videos maybe they have some minimal interaction but they come with sort of like hey i'm a closer i know what i'm doing i don't need any training because i'm only going to get paid when i close the deal right so why am i going to waste any of my time because technically i'm not being paid to be trained i only get paid when i close the deal so the training part gets really really difficult you can't force somebody to go through your training only to make little to no money for their time right so they're only going to invest time if they see money on the other side why well this person over here is really motivated by money and clearly they have to figure out how and where to make money and so typically if they see another opportunity that makes a slightly more income they're going to be moving from this side to there because they're just constantly looking to earn money both sides could work right i mean you could have full-time employees that really really invests the time with the customers because they get paid for their time regardless so they have no problem they're like hey let's have another call let's have another call it's live dv let's meet in person let's do whatever it takes to make sure we're the right fit over here they're trying to cut short and say hey is this you know are we going to make this deal what do i need to do sometimes make unrealistic expectations for the client just to earn that commission because the only way that they are ever paid is by commission so the risk is for an agency what are they motivated by first of all they only get paid when they close the deal so what do you think they're going to do they're going to say whatever it takes to close the deal even if it's not a good customer even if their goals can never be met even if they're not the right fit they're going to say yep this is what we do and of course you're going to get a million dollars in sales if you put 500 an ad spent of course it's just that's all of our customers the stuff that they would say would literally depending on the situation is probably not going to be an ideal situation for any customer right so unfortunately what i've seen is sometimes the commitments are made and no matter how good you are as an agency you really can't fulfill what the customers want because what they want is really nothing that any other agency would be able to fulfill so you get into situations because again you go back to the root of the problem the problem is we're trying to save money on overhead and maybe benefits and you remove training and you really don't have any control of when they work because as a contractor you can't really tell them when they work they're on their own doing their thing and they're sort of doing you a favor right so unfortunately i've seen more negative things in digital marketing of course there are industries where a profession of real estate whether commercial or you know residential only operates with commission only because these people actually go into real estate and say this is what i want to do with my career i want to help people find a home i want to help investors find the best commercial property the whole industry operates in a different model or in insurance they're typically paid only when a sale is made but when you take that concept and put into professional services where you're not necessarily giving them a base you're not giving them any sort of even leads sometimes you're not giving them a draw against commission and they're sort of hunting what happens is when they see another opportunity let's say the sales rep gets an offer and somebody reaches out to them say hey look we can give you whatever the basis we can give you this commission and you're going to be able to make on target earning of say a hundred thousand dollars what do you think they're going to do to that commission only opportunity where they get no benefits they get no consistent salary and they're not part of necessarily a team they're sort of treated like hey you're the you're the contractor right so you didn't make anything last month so you didn't get any money they typically move now i want you to put yourself in the shoes of that person if you had gotten another opportunity where you made potentially much more consistent income and most importantly you're going to get insurance and you know 401k retirement things like that would you move or would you continually do this commission only gig right if you're somebody who's driven by growth and opportunity both professionally and personally you're probably going to move now if you're somebody who's already have multiple sources of income and you're not looking to work for somebody and you're okay with making money only when a sale is made because you have other sources of income you might be okay right so it really depends on that individual for me i look for long-term growth i look for a long-term partnership i look for people that are going to be buying in to the company's vision and mission roll up their sleeps and work hard to make something happen and i've never been able to find somebody on commission only basis because they literally have no skin in the game and i'm not saying that i've ever tried i'm saying it is not possible to find somebody who believes in the company to do everything under their power to make the company successful then work with a customer one by one invest their time and really help them find the right solution really help them identify their problem spend the time work with them come up with a solution a strategy and then propose that to them go through any negotiations if maybe finding out if we're the right fit and winning that business takes enormous amount of effort it could take three months maybe six if you really wanted to go find a big opportunity and in a commission-only environment it's almost too big of a task they're not going to want to undertake because they don't know if they're going to be making that money at the end of the six months period i haven't seen this model work in a long enough period to say that this is a better model but it is absolutely popular i gotta be honest it is absolutely popular why because it sounds good it only sounds good to the agency it doesn't sound really great for the sales person and to me sales is everything it's an experience you want your customers to really have an amazing experience in that sales process what's it like to work with your agency as a potential customer what kind of you know maybe communication are they going to be able to have how frequently and how much time are you going to give to that prospect and how much care are you going to give and i think it takes a different type of sales experience for the modern sales you know organizations and the modern prospects of the world like you really want them to feel like they're not pressured you really want them to feel like if we're not the right fit that's going to be okay you really want them to feel that at the end of the day i'm not being sold to anything it is their pleasure in having the sales conversation and actually making a decision to work with you that's the world that we live in and you never want to feel like a used car sales person you would never want them to feel like hey what's it going to take to get you in this car today if a sales person told me that i'm probably not going to be working with that sales person or that dealership if you ask me why because we know that kind of that stigma against salespeople they're called sleazy and all the different names that people call because of bad experiences in their mind what i want to make sure is that whether you go down the path of a commission only sales rep or a full-time person because they could be just as bad but at the end of the day you really want to make sure that you take so much time and energy to qualify every opportunity invest the time to understand the pain points the needs and then provide solution and find out if we can solve their problem with a budget that's reasonable and then to onboard that customer and to do any kind of post fulfillment of that presentation right that's what you really want to do and that might take a little bit more than a one-time sale a one-call close sales experience right that's what i really want you to get out of this it's not whether hey should you go down the path of commission only i would really want to know the motives behind the sales rep i really want to know if they were to be presented a better opportunity are they going to stay here they're going to go but if they're going to go why would you waste your leads the energy in generating leads and spending money on ads maybe it's facebook ads maybe it's google ads and booking appointments when that person might be taking another call for a different company or something like that you lose the lead you lose the opportunity the lead is not going to reschedule on a call and most importantly you're losing revenue and most importantly time for the agency for your business so is it worth the risk if you can't hire full-time people maybe you got to reinvestigate like what do we need to do to grow this agency right maybe the owner of the agency takes the sales calls until you have enough money to hire a sales rep maybe that's the opportunity but the end of the day i really want you to think about the pros and cons of what you're really doing is this a short-term revenue generating business or do you really see this as something long-term is this commission only a temporary thing until you have enough revenue to turn that person into a full-time person for the company maybe it might make sense but if your business model is churned and burned through sales rep after sales rep let me tell you if a customer wants to have a second phone call and you have a different sales rep the whole entire experience is absolutely different it's like walking into walmart you never really know who you're going to get and you may get nobody so you don't want to be that agency you really want to be a concierge you really want to make sure that hey if i ring the bell i'm going to get the best in class service if i call the number i'm going to have a human being on the other side that's the experience that i hope you want for your agency and in my world if you ask me one after the other i would pick the one that is going to probably cost more for the agency but at the end of the day short term it is going to be more costly long term you're going to have tremendous amount of savings the commission side short term is going to be very cost effective but in the long term it's going to be very expensive it's going to be very expensive to not be able to close deal to not retain those customers to not have that experience whether you hire a commissioner sales rep where you find a person that is full-time that is a good fit from a competence commitment and culture fit for your agency as long as you take care of those leads right it's only as long as you're doing the part what a sales rep really does which is investing the time their energy into someone else's business really uncovering their pain for them and providing solutions you're in great hands right kudos to you if you found that on a sales commission only basis however in our organization we've always invested in the sales rep we invested in training giving them the resources that they need both professionally and personally to help them scale themselves and scale the business that's how we grow just an fyi and if it was really popular the biggest of companies will be doing it but you really want to make sure that you're doing what's in the best interest of that individual and the company all right you want to make sure that you don't have high attrition in your sales department you really want to make sure that you're not reinventing the wheel every single time because it takes enormous amount of learning in digital marketing and also in sales process and how to deal with customers and how to overcome objections there's quite a lot of training and coaching that we do to sales people every single day so it's not quite easy to just go in and become a sales rep and tomorrow be able to be able to do that like a pro if you like this content click that like button and leave me a comment tell me whether you 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