If you want to change their behavior, you need to do one of three things:

1. Require that salespeople hit certain targets/quotas for desired activities or their commissions get a haircut (e.g. you get 15% commission if you hit your target, 10% if you don't). Some possible targets:

* Make at least X outbound calls a week

* Close at least Y sales generated from outbound leads

2. Pay a lower commission for inbound leads and a higher rate for outbound leads. This will require policing so that salespeople don't mark inbound leads as outbound leads.

3. Stop using commissions as a stick/carrot and hire good self-motivated people, like you do for other departments. Here's a great article on that: http://www.inc.com/magazine/20030501/25416.html

P.S. Yes, all calls need to be logged for a commission to be paid. If you can't afford Salesforce or Netsuite, try Highrise. You need to be using a CRM anyway.

Seriously consider getting someone with experience in sales to come and manage the team, and bring processes in.

2. Don't worry about paying commission on a sale that occurred 2 days after the phone call. It is likely the rep played a key role in them signing up, so they likely earned most if not all of the commission.

3. Consider increasing your commission rate and/or lowering your salary (if you are providing one). It seems to me that your reps are not terribly motivated. This lack of motivation can occur for a variety for a variety of reasons: role confusion and rule confusion (see #1 above), lack of financial incentive for new sales/commissions, too high of a base salary. Basically, you need to find the right level of giving them a solid enough base, but low enough for them to be really motivated to make new sales.

4. Add a bonus if certain sales goals are met.

5. Be generous - I've found that a number of startup folks under value the role of sales/marketing in a startup. If you have measurable sales goals and they are meeting those goals, then be generous.

So it would be good to review whether that team is necessary, before spending much brain time revising their incentive structures.

Does this mean we need a new CS person and no sales people?

If I phone you already thinking I am interested in your product and talked to someone who sounded deeply knowledgeable about the service, this would increase my confidence level more than if I talked to a smooth-talker (obviously not knowing your niche this may not apply).

Fundamentally I think you need to listen in on some of the phone calls your sales people are taking. What are your customers looking for at that stage? Do they want to talk about pricing a lot? Do they want to discuss functionality or ask about future features?

I'm not sure if this article will help, but it may definitely make you aware of some possible problems with commissions.

It sounds like there might be an economical solution. do you know how much a dollar of ads earns vs. a dollar of base + commission? You could be up front about these numbers with your sales team and say "Look, I could pay you guys $100 and expect $200 in sales, or I could spend $100 in ads and see $500 in sales," and use those numbers to structure performance reviews and establish sales quotas.

You seem to want to push proactive sales so put the money there at the sign up add a how did you hear about us. If they indicate an advertisement then a sales men would have to show substantial effort on their part to claim commission. If they claim a salesmen then they automatically get commission. If they don't claim anything then salesmen can claim with some effort. If a salesmen pushes an ad then he gets reduced commission for everyone the ad brings in.

Perhaps have the sales people give the customers a discount coupon identifier (5-10% or something) when they call. When the customer purchases, if they use the discount code, the sales person gets some part of the commission.

Not only does it help you track who got the commission, but it might increase conversions of people who are interested enough in the product to call you.

...sales people are best used for 2 kinds of products or services.

1. High priced stuff (were a comission makes more sense, also). For example: selling yachts. The website generates the leads and the sales clerk does what he should know best: closing the sale.

2. Upsells. This is for example a seminar to write better content for your new website. You could work together with good writers. The thing is: you new clients, you know they need a good content writer _now_. And this kind of now is the phase were good sales people excel in.

If you don't have an extensive sales cycle, there is zero reason why you need to pay commission.

If you want rainmakers, you've got to set up a sales incentive program that demands it, and then brutally winnow out those who don't make the grade. Otherwise, pay them a base salary and then a fixed bonus based on the entire group making quota. Brutal winnowing is still encouraged in this situation, to cut out the losers who aren't closing.