buying a new phone – A simple study on the impact of commission in sales

Image result for phone market iconPhones have become an essential part of everyday living, we may try to deny, but most of us are completely reliant on them and probably everybody you know has one. With this massive increase in phone ownership, over the past 2 decades  a very competitive market has developed. The combination of numerous network packages coupled with different handset technology available leave me personally scratching my head when it comes to renewal or buying a new phone.

Where is the best place to buy one from? Who is going to give me the best advice, guide me into buying what I actually need, at the best price?  One could assume that a good place to go is a service provider, however on top of the already large number of factors, a further consideration is that the sales rep you purchase from within a service provider it is most likely being paid commission. Does the potential impact of the seller being paid commission mean we should always start with a third party store that offers phones without the commissionable sales issue?

Image result for store iconIf you walk into a service provider location, you will be greeted quickly with a positive and “eager to sell” attitude. These reps have a specific goal in mind, they want to sell. Their income from the work they do is based off a percentage of the money they can get clientele to spend.  Often our reaction is to look down on this model, the commissioned rep, recognizing the downsides of ‘pushiness’ and pressure.

However, there are benefits to dealing with a commissioned rep, as a start, we are forearmed with the knowledge they have an agenda, it is not hidden, and it is fairly easy to work out where their loyalties lie – If you’re in a specific store they likely recommend their services but should have little preference to the handset model.

The most important plus side for me, is that these reps have a higher drive to sell and therefore will typically put more effort into their interaction with the customer. They will learn and become more knowledgeable to answer any questions – if you want to know all the specs on the iPhone 8, your sales rep will most likely be able to tell them to you. Finally, a rep who wants to sell will have learned that in order to make someone a customer, they must listen to people, to understand their concerns, and work out the best option.

Image result for phone question iconSo, what do we get from the alternative, a third-party seller? They will have different options, from a network perspective, again we know this. What we must consider is if you are getting the same support and knowledge from the sales rep, if they are responsive to you, if they know the answers to the questions. Finally, are you sure you know any bias they may have.

There have been numerous studies done on the benefit of sales commission, almost without exception looking at issue from the vendors perspective, analyzing if it leads to increase sales. The consumer view on commission is arguably difficult to study broadly as there are so many factors, this is a very simple example but one we can all relate to. As we’ve all done this, bought phones, probably experienced both models we can form our own opinions .

I know where my experience leaves me -having a sales rep who wants to help is my preference, someone who translates what I could learn from pouring over reviews for hours into a short conversation. We’re a bit biased here, admittedly our whole company exists to advice and implement sales incentives within our client bases and we firmly believe commission leads to better customer service for the consumer.

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