Sales person - commission

[Sunshine]

I am wondering, when you hire a sales person and you pay a base plus commission, how does it work when they get maintenance contracts?
Do they get a commission every month for as long as you have the contract? Do you pay it only based on the first month? Do you have a flat rate for it?

I appreciate any of you sharing the way that you do it

[FoxCPM]

Originally Posted by Sunshine

I am wondering, when you hire a sales person and you pay a base plus commission, how does it work when they get maintenance contracts?
Do they get a commission every month for as long as you have the contract? Do you pay it only based on the first month? Do you have a flat rate for it?

I appreciate any of you sharing the way that you do it

We pay 10% and up as long as the contract is alive. That's for sweeping or porter.

[FullBlast]

Would like to hear more input on this subject!!

[ValleyPressureWash]

I don't have any sales reps yet but I can tell you what motivated me when I was in sales. I was a sales rep for 16 years.

I'll give you a few options on the way you can motivate the sales reps with pay.

I'm not sure what type of dollars that you are looking from your reps but I'll factor on the low end for ease of figuring this out. You can change the dollars any way you want but this will give you an idea.

1. Pay on a progressive scale. For the first $1000 sold each month, the rep would get 6% commision. Between $1001 and $2000, the rep would get 8% commison. Between $2001-3000, the rep would receive 10%. Over $3000 you pay 15% commision. If the rep sells a maintenance contract, that money gets added on every month that the contract is good for. For example, if the rep sales a $500 monthly contract for 6 months, every month he's $500 ahead going into the next month. This does two things: It give the rep a reason to sell a longer term contract plus it gives them a reason to stay with you and not look for another job. This helps both you and the sales rep.

2. Pay a straight commison with bonus tiers. You can pay a straight commison of 8% with bonuses at different levels. For example, when the rep gets to $1000 they get a $50 bonus, when they get to $2000 they get an additional $75 bonus, when they get to $3000 they get an additional $100 bonus so on and so forth. This is assuming monthly billing. On maintenance contracts you would only want to pay per month because that always makes the rep stay.

3. You could use number 1 & 2. Use number one but add bonus tiers. For example, after the rep gets to the highest commision level, add bonuses levels for each additional $1000 sold.

4. Another options is to pay a higher commision for longer contracts. For example a one time cleaning gets 5% commission, 3 month contract 10% commision, 6 month and higher 15% commission.

Hopefully this helps you. The main thing you want to remember is it's all about making money for you and the rep. It's all about getting the sales rep to work as hard as he can for you because it helps him out. It's normally only about him and not about you. He's worried about his family. Every sales rep looks at WIIFM (What's in it for me?)

Something that I've seen from experience that helps motivate people is suprising them. If your rep is doing a great job for you, go buy them a gift card to their favorite restaurant so they can take their family out for dinner.

I'm sure there are plenty of other people out here with things that work for them.

[Christopher]

Sounds like a good idea Todd.

Did you hire salespeople with experience or did you train them?

[Sunshine]

Thanks for sharing guys!

I think there are some great ideas here

[Clean Image]

That's good stuff Todd thanks!

[ValleyPressureWash]

Glad to help guys!

Chris....I haven't hired anyone to sell for me yet as I stated at the start of my 1st post however I have hired sales reps for other companies in the past.

There are two rules of thought and they both conflict each other.

1st: You want to hire someone who has experience because they know what they are doing and have done it in the past. They know what they are supposed to do and you don't have to train them. The problem with these people is that some of them think they know how to sell and they are set in their ways.

2nd: You want to hire someone who has no sales experience because they don't have the bad habits of someone who has done it and think they know everything there is about selling. These people you can train to do what you expect them to do without them sitting there listening to you with it going in one ear and out the other. The problem is they don't have any sales experience.

I've hired both types and received mixed results.

I ultimately think you need to find someone that is hungry to make money and show them how much they can make doing what you ask and expect. Don't hire someone that seems content to make a decent living, hire someone that wants the expensive things in life. I had a manager years ago that would always ask me if I had bought a new car, boat, or anything expensive lately. When I had done something like that, he would say "great, now you have to work harder to pay off your debt!" In a way, he was kidding but on the other hand, it was true. The more I bought, the harder I needed to work to pay the bills.