- The Follow Up
- Posts
- What Happens When You Take Commission Away from a Sales Team
What Happens When You Take Commission Away from a Sales Team
Can you motivate a sales team without commissions?
Good morning, and Happy Bitcoin Pizza Day! Thirteen years ago today, a programmer spent 10,000 Bitcoins on two pizzas, now worth $630 million. Next time you feel bad about that discount you gave to close the quarter, just remember: at least you didn't trade generational wealth for dinner one night. Now let’s get into today’s Follow Up. 🍕😁
What not to do in your follow up 👀
What happens when you cut commissions 💰️
How Zapier is re-building their sales team 📈
Sales jobs & a meme 😂
Sales Tip of The Day 💡
When you follow up on a cold email, never assume they remember your first one.
❌ Just following up on my previous note. Thoughts?
✅ We help {roles/company’s} solve {pain point}. Does that sound relevant on your end?
This does two things:
Removes the homework (they don’t have to go dig up your last email)
Restates the value without sounding like a pest
Masters in Marketing
The sales-marketing divide costs you commissions. Bridge the gap with Masters in Marketing.
Understand the customer journey before your pitch, predict objections before they arise, and transform marketing insights into closed deals.
What Happens When Sales Teams Axe Commissions
Imagine walking into your next sales meeting and hearing: "We're eliminating commissions. Everyone's moving to straight salary."
Your first reaction? Probably somewhere between panic and updating your LinkedIn profile.
I mean… commission is one of the main reasons we all got into sales in the first place.
It’s as fundamental to sales as cold calls and quotas. The entire industry is built on dangling financial carrots in front of hungry reps.
But a few companies have experimented with commission free models, and the results are pretty surprising. Some didn’t work, but others absolutely crushed it.
Today, we’re diving into what really happens when sales teams ditch the traditional comp plan.
Commission-Free Experiments
BambooHR shook things up in 2017 when they shifted their sales team from commission to straight salary. The HR software company saw an improvement in team dynamics. "The willingness of sales reps to help each other improved as the normal friction linked to commissions disappeared," leadership noted.
They also noted that reps remained just as productive without the commission incentives.
Special note: none of their open sales roles mention commission, so it appears they may still be without it.
Marshall Industries took a bolder step back in the 1990s, when CEO Robert Rodin scrapped commissions entirely.
Under the old system, Marshall's reps had been gaming it to inflate their commissions. Some were even hiding returned products in their car trunks to avoid losing commissions on those sales. After eliminating commissions, one salaried rep famously told a skeptical client, "I'm on salary... What possible reason would I have to lie to you?"
The payoff was massive: sales per person doubled from $360K to $740K after commissions were axed.
What Changes When Commissions Disappear
These companies discovered several unexpected shifts:
1. Collaboration Replaced Competition
Commission based environments can feel like the Hunger Games (and sometimes that’s a good thing). Reps guard territories and leads to protect their paycheck. But when BambooHR removed commissions, "working together and collaborating" became the norm.
ThoughtWorks similarly found that commissions created a cutthroat environment where salespeople put their own payout first. Without that zero-sum incentive, sales teams actually helped each other close deals.
2. Customer Focus Intensified
In commission heavy cultures, the pressure to "always be closing" can lead to pushing products customers don't need, just to hit quota.
A commission-free model flips the script to long-term customer relationships. Reps can focus on genuinely solving problems without worrying about their personal commission check.
3. Motivation Shifted from Extrinsic to Intrinsic
Traditional sales roles use extrinsic motivation, like dangling commissions and accelerators, to fire people up. This works for some. But can also create stress and an ‘every rep for themselves’ vibe.
In a no-commission environment, the emphasis shifts to intrinsic motivation and team goals.
When No-Commission Models Fail
Let's be real.. Ditching commissions can also have some serious downsides.
1. Attracting Top Talent
If you cut commissions, good luck attracting top talent. The best salespeople want uncapped earning potential, not a mediocre salary and free snacks. When ThoughtWorks tried this experiment, their best performers simply left for companies that paid for results.
They initially removed commissions in 2013, but restored them in 2018 after seeing an "unacceptable reduction" in sales effectiveness.
2. Motivation and Morale
The most notorious cautionary tale is Circuit City. In 2003, the retailer eliminated commissions and laid off veteran salespeople to cut costs.
The result? Morale cratered, and customer service tanked. And as we know, the company never recovered.
Commission-free models work in very specific environments with very specific types of people. For most sales orgs? It's a fast track to the grave.
Is Commission Free Sales the Future?
The evidence suggests that a commission-free model must fit your culture and business model. It works best in organizations that value long-term relationships, inbound sales, and slower growth.
If a company's success relies on intense individual drive, outbound sales, and competition, scrapping commissions is almost always a terrible idea.
The key is knowing what environment brings out your best performance.
Would you work in sales if there was no commission? |
