A high performance sales person is one of the most valuable assets a company can have.
The purchase opportunity a consumer will pass up if left to their own isolated mind and will, the consumer will buy and pay twice the price if helped by a good sales person.
To better explore this notion let's take a look and explore some thoughts on home loan lending and the loan agent.
The loan agent for the modern day private lender is there for one reason. They are there to hold the borrowers hand, keep them happy, and most importantly to see them through the entire closing process. This is important because the borrower and home buyer has a lot to deal with. The never ending list of closing costs can be overwhelming and borrowers often want to back away as they become overwhelmed with all the financial obligations and contracts.
Because good sales people are hard to find and historically impossible to control, the typical employee to employer arrangement has proved a poor performance strategy.
Salary is a commitment and if the employer is wrong about the hired employee than they are out quite a bit of money. Sales people have a reputation of taking their own interest to the extreme. If they are guaranteed money this is gonna make managing them even worst. Why go the extra mile if there is no perceived self benefit?
Thus the commission has proven to be a great fit for the marketing and sales side of business operations.
Sales people are also good at extracting the highest price tolerable by any one given borrower. Thus loan origination points are a great match for originating loans. The sales guy is able to pull huge commissions and thus make a fruitful living and the lender carries zero risk.
By giving sales people a optional margin and commission take depending on the price obtained for any given product a company is able to give their sales reps greater opportunity for tremendously less risk. The price and risk is passed on to the consumer. If the consumer or borrower negotiates the price down to the bare minimum than they have avoided the extra cost of the reps allowable premium. The rep in this scenario still gets a commission. The commission is not as high as it could have been if they were able to get the consumer to purchase the product for a higher premium.
Sales people learn to live and cope with this uncertainty.
Understanding Risk and the Certainty of Uncertainty