In my last company we operated for years without commissions. But our sales were never really quite paying the bills. But because of how we sold our software, we ended up building very long reaching and substantial relationships with our customers. Quite a few are still very loyal customers today, almost a decade later. Everybody was a sales person.

Still we couldn't quite get over the hump to profitable and growing.

For a few years we had a professional sales guy who handled a number of clients. He was paid like everybody else, base salary plus bonuses. However, he always felt uncomfortable not getting a base + commission like he was used to. One thing that was noted was the "drive by" approach to sales he used. Customer interaction was fairly limited, relationship building was minimal, meetings of any sort were kept on strict time schedules (and no longer than 1 hour).

This ran counter to how the rest of us moved software. He did "ok" compared to the rest of us in short term sales, but not a single one of his customers stayed on as long term customers.

Enter a new CEO, he brought in a professional sales team, and restructured the sales operation to a base + commission model. Very quickly one problem became very apparent. The hours worked on a sale by the a sales guy were quickly dwarfed by the hours worked by the rest of the staff to support him. But when the sale was made, he kept the entire commission.

This became a really big problem as the new sales guys would start new custom demo building efforts without regard to how much time it took the rest of the staff to support him. To him, his 2 or 3 1-hour meetings, a half dozen emails and a phone call or two didn't change if the demo took 8 hours to put together or 120.

Sales were also still not up-to-par. The sales team blamed the lack of support, the support team resented the flippant treatment by sales. Something had to give.

The new CEO was absolutely opposed to getting rid of commission entirely, he felt that it would limit his ability to recruit new sales talent. So I proposed a middle ground:

- any designated sales person "owned" their account and were guaranteed some money out of a deal closing

- if he made the sale completely, 100% on his own, he kept 100% of the commission. This was to encourage them to start respecting how much work went into the support he received and for them to better learn the product line they were pushing (we had a problem where every salesman needed a support engineer in every sales meeting to answer 80% of the questions the customer posed)

- if he required even 5 minutes of anybody else's time, he lost 40% of this commission, to be paid to the person who helped him. This was to encourage the sales staff to collaborate and get the most out of their support person, and to encourage the support person to collaborate with the sales guy -- effectively reintroducing the "everybody is a salesperson" back into the company

- if more than one person had to help, the 40% was split between those people, this again further encouraged collaboration, skill building (so the support person wouldn't have to rope in additional colleagues) and the need for the requesting sales person to actually learn about the functions needed to support his sales effort and who had those skills

In the end, the sales guy, rather than being a brash, drive by, finger pointing irritant to the company -- rewarded for everybody else's work -- had to learn to lead micro-teams for each sales effort, or learn the products back and forth and serve themselves.

The results:

- small sales efforts ended up being handled solo, the sales guys started to get really good at estimating LoE for a sale. One guy ended up specializing in these and handed off larger sales to the rest of the sales team as he didn't want to coordinate people...he kept selling so it was fine

- larger LoEs automatically pulled in a few core people who ended up more or less as sales engineers for the sales staff, we became much more careful about sizing sales vs. LoE so we didn't waste now 2 or 3 people's time

- support staff loved getting extra checks every quarter, motivation was up and resentment was down

- sales guys became much more part of the team than slick lone-wolfs

sales were up record percentages

What went wrong?

When more than one support staff worked on a sale, it became unclear how to split the 40% at times.

There were still sales where the support work dwarfed the sales guy's work, and/or times when the sales guys thought they could game the system by delegating virtually all of the sales process to a support person, then collect their 60% for virtually no work (this happened under the old system when they made 100% too) the 60/40 split didn't always make everybody happy.

It introduced quite a bit of complexity into the sales process. Pre-commission, we were free to just focus on the sales process, post-commission there was endless negotiations over commission splits, payout times, etc.

If I had to do it over again, I make the rules this way.

Sales people would be payed a normal competitive salary, no commissions until they've at least covered their own cost to the company, then commission pay outs as before.

Actually, I'd still setup a commission-free system, but with generous bonuses to outstanding members of the team.