This is an important, underestimated issue which is the cause of pride, grief, strife, success or failure. First of all, there is one major distinction to clarify. If the phone is ringing because of people who have made up their minds already, then the person who is "taking the order" needs only to be knowledgeable on the product or service and be able to fill out the order form correctly (in-home or otherwise). That individual is not (needn't be) a trained professional sales person - nor should he be paid as one. If the leads are of the "they-come-to-you" type, the above description will suffice. But, if the leads are generated by mail, ad or phone, a trained professional is necessary for any predictable success. A trained professional is defined here as one who can paint a logical justification, instill a sense of urgency and handle objections - and get sales! Compensation for such individuals is a complicated situation. Following are a few sensible ground rules: 1. Sales are the lifeblood of any business, and productive sales people are valuable professionals and should be paid accordingly. 2. Compensation should be based upon the better sales people earning over $60,000 per annum (some earn $200,000 - and deserve it), and as open-ended as possible. 3. Turn-over kills you in two ways - a) retraining is expensive and inefficient, b) consider where the sales person you lost went straight to the competition! It happens that revenge, as distasteful as it is, is one of the greatest motivators. 4. Sales professionals work for recognition. Money is only one form of recognition, and a necessary one, at that, but most sales professionals would work for approval. 5. Sales professionals who are very productive are not necessarily suited for sales management. Sales management is a particular skill of leadership, for which the average sales professional is not suited. There is a gray area in paying sales people. You will want to pay them well, to keep them, but not necessarily to the point of having their incomes dictate price increases or margin decreases. The measuring rod is a combination of two factors. One is ease of replacement- what degree of difficulty exists in finding someone who can do the same job for the same or less. The other factor is your ability to weather the negatives of a turn-over, including the impact on morale. All compensation packages should be on a graduated plan, upward. That is, more sales should make for more commission (percentage), not less. There are far too many companies that limit sales professionals to earning no more than a sales manager. This practice is bad management, destined for failure. Sales professionals should be paid both regular commissions and bonuses on a quarterly basis. Having bonuses on a weekly basis dilutes the impact, because they come to be expected. Take care of your sales people! Sample Compensation - adapt proportionally $350 per sale (or 8%) $50 extra per sale, beginning with three in one week $50 extra per sale, beginning with twelve in one month $50 extra for a self-generated lead, including referrals (if the sales professional sets the appointment) $50 extra if no offer is used (assuming you saved $100+). |
