Should you take a commission-only job?

Published: Wed, 06/26/24

Updated: Thu, 06/27/24

June 26, 2024

TOGETHER WITH

Good morning and welcome back. If you didn’t melt in last week’s heat wave, you’re probably ready for another exciting week of convincing strangers to buy things so that you can afford to buy things from strangers. In this week’s issue, we’ll look at the history of cold calling, share a Sales Fail about a real estate deal gone bad, and give some advice to an aspiring rep with a questionable job offer.

NUMBER OF THE WEEK

65% of outside account executives are attaining quota which is 10% higher than inside reps

Source: Spotio

SALES ROUNDUP

Here’s what’s happening in the sales world this week:

Car dealerships across the U.S. faced disruptions over the past week after a series of cyberattacks led to outages at many dealer groups. CDK Global, a company that provides software for thousands of auto dealers in the U.S. and Canada, was hit by back-to-back cyberattacks last Wednesday, which continued into the weekend. The company provides technology that helps dealers with operations like facilitating vehicle sales, financing, insurance and repairs. You can read more about the attacks here.
A ‘thoroughly dishonest’ UK used car salesman has been jailed after he siphoned off tens of thousands of pounds of company funds in order to fund his ‘lavish lifestyle’. Ceri Lewis pocketed almost £33,000 in ill-gotten gains during a three-year stint at Penybanc Car Sales in Ammanford – which had taken him on despite a previous conviction for theft from an employer. After the employer discovered the theft, they agreed to a repayment plan, which Lewis defaulted on. You can read more about it here.

FEATURE

Martin de Jong/shutterstock.com

A Brief History of Cold Calling

If you’re reading this, you might be procrastinating instead of going through the list of calls you’re supposed to make today. And unless you’re really new to sales, you’ve probably made thousands of cold calls in your career. But how did we get here? We dug through the archives of the internet to find out how cold calling became a daily part of life for salespeople (and customers) across the world.

The concept of cold calling dates back to 1873, with the man who invented modern selling as we know it, John H. Patterson, of the National Cash Register Company (NCR). Patterson’s first “cold calls” weren't actually phone calls, but face-to-face client conversations, usually at their place of business, with the goal of earning the stranger’s trust before offering suggestions for which cash register would best fit his customer’s business needs. Patterson documented his technique in what would become some of the first sales training manuals to give his employees a playbook to sell to strangers.

In 1876, Alexander Graham Bell gave salespeople the gift of the telephone. But the telephone wasn’t rapidly adopted like new technologies are today. It wasn’t until 1946 that the majority of U.S. households had phones. However, businesses were quicker to adopt. In 1886, the Yellow Pages launched as the first business telephone directory, which allowed salespeople to call businesses directly in what would become the first true cold calls.

The Golden Age of Cold Calling

By the late 1950s, 75% of U.S. households had telephones, which launched the golden age of cold calling. During this time, telemarketing became a significant part of sales strategies across industries. Companies invested heavily in training programs and call centers, focusing on scripting, objection handling, and closing techniques. The expansion of consumer credit and the booming economy created fertile ground for cold calling to thrive for decades. By the 1980s, cold calling surpassed postal mail as the most popular way for salespeople to reach prospects.

Regulation and Consumer Protection

As cold calling grew, so did concerns about its impact on consumers. In the late 20th century, regulatory measures were introduced to protect consumers from aggressive and intrusive sales practices. The United States implemented the Telephone Consumer Protection Act (TCPA) in 1991, which restricted telemarketing calls and introduced the National Do Not Call Registry in 2003. These regulations aimed to balance the needs of businesses with the rights of consumers, leading to more ethical cold calling practices. The regulations stated that cold calling could only be done between 8 a.m. and 9 p.m. Salespeople were also required to disclose if they were calling for a for-profit or charity organization, and they were required to reveal all the information about the product they were selling, which meant that they were legally obligated not to lie.

The Present and Future of Cold Calling

Today, cold email (and LinkedIn direct messaging) has emerged as the primary way to reach prospects. Much the same way cold calling largely replaced face-to-face prospecting for its ability to allow reps to pitch more customers per day, cold email lets reps reach out to thousands of people via bulk sends and automated sequences.

While some argue that cold calling is becoming obsolete, it still remains one of the best ways for a salesperson to provide a personal touch and get immediate feedback that only a phone call can provide.

Cold calling continues to evolve. Modern sales strategies often integrate cold calling with digital tools and analytics, enabling more targeted and personalized calls. Sales reps are now listening back to call recording and gathering insights around their performance to sell better. Although it’s harder than ever to build trust with a stranger on the phone, cold calling is still a widely used sales tactic. As new technologies emerge, picking up the phone and giving your prospect a call might become the best way to stand out in a sea of unread emails. So what are you waiting for? Pick up the phone and make that call... after lunch!

TRACK ENGAGEMENT ACROSS ALL YOUR SALES MATERIALS

Are you tracking how buyers are interacting with your proposals?

You could be leaving money on the table! If you’re not taking the time to understand your buying committee, you’re probably missing out on some deals.

This is as true at the proposal stage as it is at any other stage of your sales cycle. Luckily, our friends over at Qwilr can help with this.

Qwilr not only lets you cut through the noise with eye-catching and engaging sales materials, because their platform lets you send your proposals as webpages – you also get access to a heap of useful data that you can use to help close deals.

With their new analytics, you’ll be able to see who is in your buying committee, which sections of your proposal they are spending the most time on, what they’ve clicked on and more! You can even set up notifications to better time your follow ups. For example, if your buyer comes back to view a proposal weeks, or even months, after you sent it – you can get notified!

Want to learn more? Try it free here!

Try for free!

MEME OF THE WEEK

Source: Instagram -- Sales Humor

QUIZ

According to the Bureau of Labor Statistics, how many people work in Sales and Related Occupations?

A. 11,482,110
B. 15,900,565
C. 410,076,443
D. 13,380,660

SALES FAILS

Each week, we bring you the most cringe-worthy sales moments from across the web. To submit your sales fail story for consideration, click here. (Don't worry, you'll remain completely anonymous).

I work in the mortgage industry and have been doing it for a very long time. My best Sales Fails story happened about ten years ago when I was an LO (Loan Originator) for a big lender. I got a web lead for a married couple looking to do a home purchase and I prequalified them and they started shopping around together for a house.

They found a house they liked and got an accepted offer. We did all the paperwork, they did their inspections and everything else, and we were all set to close at the end of the month. It was a done deal and had gone really smoothly, with no income or home issues. I was already counting the commission from the deal.

Well, about a week before the closing, I called the couple to confirm a few last minute things, and neither one of them would return my calls. This was not a good sign. Finally, a few days later, the wife called me and was extremely apologetic. She told me that her husband had decided to leave her for a “young girl” that had been hired at his company, and that they were no longer buying the house together. I didn’t even know what to say. She sounded more angry than upset and was venting to me about how "absolutely disgusting" he was.

Needless to say, the deal did not close. They backed out of the home purchase and lost like $10k in earnest money. I never heard from the husband, so I’m assuming the wife told him she would handle it. I always wonder what happened to them. Maybe I will look them up on social media.

Anonymous Location withheld

GRAPH OF THE WEEK

Source: LinkedIn Poll -- June 2024

WORTH A PEEK

How confident are you on discovery calls? Nailing them can make the difference between a wasted lead and a deal on its way to closing. Our friends at Salesroom put together the most comprehensive guide to effective discovery calls we’ve ever seen, and it’s free for readers of The Quota! Grab it here.

ASK THE QUOTA

Want to submit a question and be featured in our advice column? Click here. (Don't worry, you'll remain completely anonymous).

Dear Quota Team

I’ve been reading your newsletter for a while now as I've been trying to break into sales. I don't really have any experience aside from working in the food service industry. I've gotten a handful of interviews but I haven't been getting any offers — until now. I interviewed for a sales job for a small company that sells marketing services. They told me that the job is essentially selling marketing retainers (that start at $5k) to net new customers that I'd have to source myself. The role is commission-only. I'd be getting a 10% commission of the first year contract value for any deals I source and close. Theoretically this sounds good. If I sold $5k monthly retainers ($60K/year), I'd be getting $6k per deal. Just doing that math quickly, I'd only need to close 17 deals over the course of a year to make $100k, which seems doable.

But my biggest concern is that the deals are structured month-to-month, so the customer can cancel anytime. Basically once I close the deal, I'm completely out of the picture. I'm worried that my potential earnings will be based on whether or not the company can actually retain the clients. What if I close a deal and the client cancels the next month and I did all that work for 500 bucks? The company doesn't have any full-time salespeople. I interviewed directly with the owner of the company and he said that all their sales are either done by him or other commission-only reps they've had in the past.

I really want to break into sales as a career, and this seems like the best way to get in and prove myself, but I don't want to be taken advantage of. I'd be putting in a lot of trust that this company can deliver. It feels like the situation is all upside for them, without putting any trust in me. Should I just take the job and give it a shot?

Concerned in Virginia

Dear Concerned

The job you described has a lot of red flags, not the least of which is the fact that none of the salespeople who have ever worked there have decided to stay. You can bet this is for good reason. Also, while there are some commission-only jobs that have an excellent upside, most reputable companies will offer some sort of ramp or draw to make sure you get paid while you’re building your pipeline. Otherwise, there’s literally zero investment on their end. Easy come, easy go.

All that being said, having any sort of sales job on your resume, even this one, might be a good way for you to break into the world of sales. You could try this for the next six months and if it’s not working out, start interviewing, with some sales experience this time. Are you willing to take the risk?

Of course, this isn’t the only way to break in, and you might want to ask yourself (or maybe one of the companies that’s turned you down) why none of your interviews thus far have turned into job offers. What are you doing, or not doing? Sales takes tenacity, and it will take some tenacity for you to break in. Network like crazy, reach out to people you would want to work for on LinkedIn, ask for advice (and take it), and show any potential employer that you’ve got hustle, grit, and chutzpah. Keep trying and soon enough you’ll get what you want. The company you're describing is far from the only game in town. Good luck!

Quiz Answer: D. According to the Bureau of Labor Statistics,13,380,660 people work in Sales and Related Occupations (you can read the source article here)