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KristineS
04-16-2009, 12:36 PM
I've had this argument with friends who are salespeople, and I wanted to see what you guys think about the subject.

Many companies that have salespeople have two types, outside and inside. Outside salespeople are the people who have territories and make calls on customers. Inside salespeople are generally called Customer Service Representatives and stay in the office. In my professional life I've worked with both types.

Where the argument comes in is in how the two groups get paid. CSRs are generally hourly or salary. Outside sales people usually make commissions. I know that means the outside salespeople are taking more risks, but it also means they can be rewarded to a far greater degree for their hard work. If the CSRS work hard and land a new customer, they don't get any extra pay, in fact the outside sales guy who has the territory will reap a commission for which they've done exactly nothing.

Something about that seems wrong to me. I don't begrudge salespeople their commissions, I just think the same system should extend to outside and inside sales. Am I off base about that?

Spider
04-16-2009, 02:43 PM
...Am I off base about that?Yes, since you put it in those terms, I think you are. A company sets up its compensation program for salespeople. Salary, no commission suits some people and commission only or base plus commission suits other people. Each to their own. No-one is forcing them to work in any particular format, and some companies even give their new hires a choice.

Personally, I think any salesperson worth their salt would choose commission only, but that is me. Others feel more comfortable with a "guaranteed" income.

Steve B
04-16-2009, 05:55 PM
I agree with Spider.

I'll also add (as a former HR Manager) it's also a matter of what is available in the market place. CSR's are extremely easy to find. There are TONS of people who are willing and capable of answering the phone and providing the customer service (including inside sales) required of CSR's. Finding capable and willing outside sales people willing to put all or a large part of their compensation at risk is a whole different animal. So, there is also an element of supply and demand involved.

Dan Furman
04-16-2009, 06:04 PM
In general terms, I have found most CSR's double as clerks, stockpeople, etc etc. Very few "inside" salespeople really "sell" like an outside salesperson does. Plus, an outside salesperson usually prospects and cold calls - an inside salesperson doesn't do much of that.

I've done both in a variety of ways, and outside salesperson is a MUCH harder job. It's not really close. They deserve to get paid more. The only "inside" sales job that really comes close is selling cars (and that's usually all commission.)

vangogh
04-16-2009, 08:01 PM
Very few "inside" salespeople really "sell" like an outside salesperson does

Maybe if they had more incentive...just saying.

Kristine I agree with what everyone else is saying. I think as you're describing it the inside people are really hired more for the customer support and other task. The selling is something you want them to do, but it's not their primary job function.

However I don't see why some kind of commission couldn't be built into their compensation. I would think that would make them more motivated to sell.

SteveC
04-16-2009, 10:17 PM
I think we need to distinguish here between sales professionals and simple order takers, there is a massive difference with most internal sales people simply employed as order takers whereas sales professionals have to source leads, do sales presentations and convince and close sales... and as mentioned they are often paid well based on results.

Spider
04-16-2009, 10:25 PM
Consider, too, that many inside sales situations are salary-only to better serve their customers. Clothing stores (eg. Jos.A.Bank) and electrical stores (eg. Best Buy) that have uncommissioned sales staff are telling their customers not to worry about being pressured into buying something that you don't want. Our people don't gain from selling you something/anything, they are here to explain, teach, help and serve.

Great sales tactic in their particular niche.

SteveC
04-16-2009, 11:05 PM
I actually think this to be a weakness... sales staff should sell product and they should be judged on how much they sell... and if they are trained correctly they should be able to sell and also solve customer problems.

Too often I find uninterested sales staff in stores, often more interested in talking to their friends and answering phone calls than in helping customers and selling product.

billbenson
04-17-2009, 12:48 AM
A differentiation should be made between customer service people and inside sales people. Customer service people are part of Marketing which is rarely commissioned aside from bonuses in my experience. Frequently people and employers use customer service as a training ground to move into sales. Some CSR's don't want to go into sales. They don't want the pressure or have other reasons.

Inside sales people in the true sense of the word "sell". In a well structured inside sales company, the marketing department may get the prospects to call via web, advertising, whatever; but the inside sales people close the deal. They may have the personal contacts with the customer, negotiate price, prospect in slow times etc. That's sales and it should be commissioned. BTW, all good sales people should have very good product knowledge. They fill a customer service roll at the same time they are selling.

Outside sales is a completely different job than the above. You are selling yourself and your product to the prospects. To my experience, outside sales jobs have dropped dramatically. Purchasing departments now go price shopping online. In my day, we did a lot of wining and dining as part of the job. Those types of jobs are still out there, but most companies have moved in the direction of online presentations, marketing, etc. Its cheaper and the customers have adapted to doing business this way. In this case, the company wants the customer to talk to a "sales" person, if they call in, not a CSR. The sales person closes the deal.

Obviously all of the above varies depending on the company, industry, marketing strategy etc. In some companies sales reports to the VP of Marketing. In other companies they report to VP of Sales for example. That's not a good structure IMO as Marketing people have a very different mindset than sales people. Marketing generally are focused on a longer term. Sales people have a weekly, monthly, quarterly, yearly quota to meet or beat. Much shorter term.

vangogh
04-17-2009, 02:07 AM
Too often I find uninterested sales staff in stores

Minimum wage and rude customers will do that to you. I've worked quite a few retail jobs in my life.

Spider
04-17-2009, 09:15 AM
...Too often I find uninterested sales staff in stores, often more interested in talking to their friends and answering phone calls than in helping customers and selling product.Perhaps you need to find better stores. I have never found that in Jos.A.Banks nor Best Buy. And, in fact, I have never encountered that in Wal-Mart, either, the epitome of low-wage employees.

Either we always get what we are looking for or we have better store employees in Texas :D

Blessed
04-17-2009, 10:38 AM
It seems to me that Kristine's real question is a differentiation between outside sales reps and customer service reps, not inside sales reps - at least to my understanding of the field. I've done "inside sales" before, and was paid base + commission - I was cold calling, following up, working deals, developing relationships and building accounts, I just did it all from the office. I've also done outside sales that I received commission on and I've done customer service sales - I didn't get commission for those positions. There I wasn't cold-calling, I was just assisting people who called and doing my best to close a sale with an already interested potential customer.

One of the places I worked did have a bonus program for their CSR's - if a new client called in and the CSR landed the sale, etc... they received a bonus for that first sale that came out of the outside sales rep's commission. The outside sales rep earned the full commission for any follow-up sales. It worked well and the outside sales reps didn't mind because the CSRs worked harder to help them out. Unfortunately I wasn't a CSR at that place...

KristineS
04-17-2009, 04:25 PM
You're right Blessed, that's exactly what I meant. I've been in several situations where the CSRS did the work and pulled in sales but didn't get any of the benefits of doing that. So, that's why I question whether the system should be set up differently.

Steve B
04-18-2009, 03:36 AM
It sounds like their system is fine. If their CSR's are taking incoming calls (without the cold calling that Blessed did when she was an inside sales) then they are probably paid fairly. Their paycheck (even without an extra commission or bonus) was their benefit for doing that.

phanio
04-18-2009, 05:04 AM
Depends on the personality and sitution of the person. Some people are born outside saleman - some are better inside. If you want more financial security - take a salary position. If you want the rewards and are willing to take the risk - go outside.

I have seem very successful companies that pay inside sales people commission. They use their website to generate leads then let the inside people follow-up.