4 things we learned from running a zero commission sales model

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(by Ramon Elzinga – Global VP Sales @ Culture Amp)
First posted on Linkedin on Aug.2, 2017
https://www.linkedin.com/pulse/4-things-weve-learned-from-running-zero-commission-sales-elzinga

Roughly 4 years ago, I joined a B2B technology company (Culture Amp) with the mission of “making people analytics accessible to the world.” My task was to build the sales function from the ground up. Our CEO (who happens to be my brother) said to me, “If you’re mission driven, you needn’t be commission driven” or something along those lines??

I had come from two previous businesses where commissions were the primary lever used to keep the pistons of the sales engine firing. I spoke with the founders about how we would build the sales team at Culture Amp, and they had a theory that commissions were a blunt tool for motivation and there were better ways. I’m typically open minded, so whilst not convinced, I thought I would give it a go. At the time, I was the only sales person.

Fast forward 4 years, and the results have been astounding. Our revenue has grown 15x. Our conversion rates and sales efficiency are better than I’ve witnessed anywhere else. Our team (now 14 strong) works really, really hard and have done so for a sustained period. We have attracted an awesome team that continues to grow. We routinely win deals against competitors driven by commissions. What have we learned over the past 4 years that others could apply?

1. You can build a much more buyer-centric process

At Culture Amp, we think about the buying process rather than the selling process. By carefully considering where the buyer is in the process, we are able to lead with broad education, provide competitor analysis later on, and then implementation steps when the time is right – matching our approach to the buyer’s point in the cycle. This tailoring is crucial for a great buying process that leads to referrals – however, this does not marry well with a quarterly quota and commission. If all the world’s car yards understood that buying a car is a big decision, one where our first trip to the car yard is to gather information rather than to be sold to, wouldn’t the world be a better place? (car yards that understand this also sell more cars…)

2. Removing individual targets opens the path for collaboration

Our deals have a moderate level of complexity. We often encounter a situation where decision makers are on two sides of the country, or even opposite sides of the globe, on the same deal. I have (with a huge grin on my face) witnessed our team collaborate where one sales person meets a decision maker, then passes the ball to a teammate who seamlessly helps move things forward in another timezone with a second decision maker from the same organization. Clients with decision makers in multiple jurisdictions are becoming the norm rather than the exception. When individual commissions are at stake, the speed and precision of this type of collaboration process breaks down.

3. Being different is helpful when attracting talent

Not everyone wants to be a lone wolf. The concept of working on longer term goals with a team of like-minded professionals rather than being subject to the monthly grind is very appealing to some sales professionals. A zero commission environment will weed out some candidates – but perhaps weeding out candidates who are in it for themselves isn’t necessarily a bad thing.

4. Salespeople are motivated by the same things as everyone else

Sounds sensible enough, but we are considered revolutionaries on this point. Our engineers, psychologists, finance team and HR folk care about things like working on something meaningful, being part of something and being masters of their craft (read Dan Pink if you haven’t already). Yet when it comes to sales people, we think they follow fundamentally different rules and are more or less “coin operated”. What we’ve witnessed is that if our sales team is:

– working on something meaningful

– working on that meaningful thing with teammates (we have small cross functional teams) and

– given the opportunity to further their craft while doing it (we train together a lot)

Then this will drive sustained motivation.

If you are building a new sales org today as we were 4 years ago, it may be time to ask yourself the question…”do we want individual quotas and commissions, sales leaderboards and idolization of ‘rainmakers’ or is it time to revisit this age-old formula?”

I stumbled upon a quote from Simon Sinek from July last year which nicely summarized the differences in what I have observed at Culture Amp versus what I saw in previous commission driven businesses:

“A culture is strong when people work with each other for each other. A culture is weak when people work against each other for themselves”

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