On Variable Compensation and Bad Sales Behaviors

There continues to be prognosticators on sales who believe that variable compensation is the root cause of bad sales behaviors, namely the self-oriented, “whatever it takes” approach that would cause salespeople to sell their clients something that would not benefit them.

Caveat Venditor

For reasons I fail to understand, those who write about some misalignment between the salesperson and their client’s goals seem to suggest that the salesperson has little to no moral intelligence and cares nothing about their reputation and future sales. From reading them, it seems they believe that the clients these salespeople call on are unsophisticated rubes who are unable to recognize someone selling them something that won’t benefit them, even when they decide by consensus, with many people from their team vetting the solution—and the salesperson and sales organization calling on them.

In a shocking and daring lack of consistent thinking, these same commentators will tell you buyers have all the information they need to make decisions, that they no longer need salespeople, and that the balance of power in the relationship is weighted very heavily towards the buyer, with the salesperson being nothing more than an errand boy or errand girl. This while salespeople continue to evolve into something much more than “pitch man,” and who now creates greater value than any time in the history of commercial sales.

Low Moral Quotient

What causes salespeople to behave badly is not variable compensation, as it’s not what causes executives to behave badly, or thieves to behave badly. It’s a low moral intelligence, something found in all populations, with no evidence of greater representation in sales than in any other human endeavor, least all of all B2B sales, where self-orientation costs one deals (and where quota attainment of less than 50% may be evidence that most salespeople aren’t simply money-grubbing slicks who are willing to do “whatever it takes.”)

It isn’t likely that executives who enjoy variable compensation are going to insist the companies they work guarantee there is no variable compensation as some form of a purity test before buying from them.

Winston Churchill once described democracy as the worst form of government, except for all others. For whatever crimes one might convict variable compensation, where different outcomes are possible, variable compensation is necessary. If two people produce the widely different results, paying them the same would be unfair, just like situations where one company produces greater outcomes is able to charge a high price for those better outcomes than their competitor can command.

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Filed under: Sales

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