Getting The Most Out Of a Small Advertising Budget

One of the most annoying business practices I come across (and honestly think is very short sighted) is this crazy idea called “Commission Sales People.”

I get the attraction. You only pay them when they make you money, so you can mitigate your risk. It’s a very defensible business position, because the sales person hopefully feels a sense of ownership of the prospective transaction. Having skin in the game will motivate them to push the envelope and close the sale.

In reality though, I am much more likely to buy from a non commissioned salesman than one who I know is more interested in closing the sale than meeting my needs.

Whenever I come across a sales pitch from a fellow who is clearly earning a commission, not only can I smell them out really quickly, I naturally put up defensive walls, and let’s be honest, no one likes being sold to.

What I really don’t get though is this idea that sales is about making money. It isn’t. (We’ll, it sort of is, but it’s more than that.) It is about exchanging value! In no world that I know of is there a scenario where taking advantage of consumers or focusing strictly on taking their money does that produce long term customers or any level of sustainability. If your business truly provides value to exchange, than you probably need good story tellers to showcase its benefits, but you shouldn’t need someone with skin in the game to close the sale.

Here’s the way I see it. If you have true value, why would you pay out high commissions if you could pay out a decent salary and make much more money. Sure, you might need to fire people quickly, but that’s a bedrock of any sales organization. Turning over bad employees to find good ones.

Having commission sales people is like a drug.

A drug that you get addicted to as it kills your business and you become more and more dependent on better sales people. No business that puts taking my money first above and beyond the value they are exchanging with me, will make a long term customer out of me.  In essence, commissioned sales people are basically creating short term gain and sacrificing your long term opportunities.

The main problem with commissioned sales people is that they like to count their commissions before they are earned. They already spent their cut of my transaction before I am ready to buy.

To be clear, small business owners who are doing business development or sales for their startup are not in the same category because they are thinking long term, even though they make money when the company does. The commissioned sales person only makes money from his direct sales.

There is one formula I know that actually works to have salespeople have skin in the game, but doesn’t hurt your business, and that is a bonus pool based on company wide profits. This rewards good behavior and punishes weak employees, and creates social pressure to succeed…Long Term.

For some reason though, many companies choose to make poor decisions and hire commission only sales people.

When I try to negotiate with a commissioned sales person, they view me as an adversary, trying to steal from them. Trying to take away their hard earned commission.

When I raise questions, they get defensive, when I explain that long term contracts don’t work for me, they don’t see me as a prospect that could stay with them long term, they view me as a pain in the rear, trying to squeeze them dry. Here’s the thing, many times the list price and proposed contract terms are actually make it or break it. I would be ready to move forward and probably be a happy customer for a long time, but the dynamic of my situation might make that a deal breaker. For example, I prefer not to lock customers into contracts, but almost every bid management solution or SEO tool or platform or even Saas provider wants a long term commitment. This is a deal killer because their terms are not aligned with my terms. Another example is charging a percentage of ad spend. As we discussed, I prefer to charge flat rates because I think paying out a percentage of ad spend creates a scenario where my interests are not directly aligned with my clients. How can I lock into a percentage of ad spend with a bid management solution, if I don’t lock my clients into similar terms?

Both of the scenarios above are actually super easy to work around, but more often than not, since the commission sales person already counted their commission when they started talking to me, I am at a massive disadvantage. It becomes me against him, and he does not have his employers best long term interest in mind.

One of the most important things to know in marketing is how to buy more advertising space for less money. Often times the price can be the difference between a successful ad campaign or a failure.  In a minute I will share exactly how you can come out on top.

So, How do you negotiate with a commissioned salesman?

You never touch their commissions. What do I mean, let’s say they stand to earn $1,000 from this sale, and the deal costs you $3ooo. Instead of trying to save $500 and cutting his commission, Try to squeeze more out of the $3k. Ask for more bang for the same buck. this way their commission is in tact, but they need to fight for you to get the close.

When you create an environment where yours and the sales persons interests are aligned, where you are fighting for their commission, you just need more for the same price, they will fight tooth and nail with their managers and bosses for you.

So, the next time you are negotiating for advertising space, don’t negotiate the final price, negotiate what you can get for that price.

BONUS: If you want another trick for buying cheap media, here is a strategy to get billboards for dirt cheap. Another trick Gary Halbert shares for buying newspaper ads, or others for that matter is to just mail a check for the amount you are willing to pay. For example, if they quote you $1000 for the ad space, and you only want to pay $600. Mail a check for $600, along with your ad copy and say, I can only afford to spend this much. If you run my ad, feel free to deposit the check, if not, kindly shred it. It is very hard to say no to cash in hand.