Hired A Salesman!

Good point guys! I just hired a salesman and I pay him not on how many closes he acquires, but how much money from those closes. His commission percentile goes up when he reaches certain dollar amounts, for incentive purposes.

Acclaim can you tell me a little More about this?

I’ve hired 2 actually. I gave them both the same commission structure.
For the jobs that they get me from door to door sales, they get a percentage of the first service call to that location. After that they get a 3-5% residual for as long as they are an active salesmen bringing a minimum of revenue (in-house) a month. The structure works like this (per month):

residential:

$1-$1000 in house 30% of sale

$1001-$2k in house 40% of sale

$2001 and up 50% of sale

residual :5%

Storefront:
similar structure but for a one month add up (if its a weekly account
residual: 3%

high rise, mid rise:
15% flat
no residual

low rise commercial:
similar to residential but caps off at 30%

All of this structure is subject to change from month to month so I can tweek it. I have done sales jobs so I know commission structure, although every company is different and I must experiment (but not to much, dont want to loose salesmen). Nay-sayers will say that such percentages are too high but i dont pay hourly so they must motivate the worker. And I’m only really paying for the fist service call, I come in later and solidify the deal after the job is done by introducing “you will be in my route” thinking into my residential customers (yes I have a route for residential. They must know when you are coming back before you leave the house. None of this “I’ll call you in a few” from me!) This is for real sale men. Also, of interest to mikeup and paneless, I dont base commission off of amount of closes, but amount of real dollars.

“Real dollars” vs. “Closes” ?

You mean after client has already PAID in full?

Hmm thats an interesting structure. I have had the same sales guy for about 3 years now and he gets a combination of hourly and commission. How long have you been using a salesman? What is is typical weekly salary … if you don’t mind me asking?

I mean I don’t say to my salesmen: " Get me 5 closes and your comission goes up." Because a close could reall be only 15 bucks.

The sales men need to reach a dollar amount in a particular month not an amount of clients.

The thing with hourly/commission compensation is that it dilutes the ‘go-get-um’ motivation. A real salesman isn’t in it for the hourly anyway.

I just hired the salesman last week so there isn’t anything typical yet.

How do you structure with your guy? Is he successful?

This is good thread is there any more of threads about salemen.

When I sold commercial carpet cleaning services the commission was based on yearly revenue growth not just new business. Anything I did to increase revenues for the commercial division was rewarded with a commission. I could bump a really old customer from 6 times a year up to 12 times a year. If they quit using us all together I had to make up that lost business in new business. If the division grew I made extra money. So I had to keep in touch with the old customers as well as my new hot leads and make sure EVERYBODY was happy.

The boss wanted to see growth not necessarily new sales and that’s what was rewarded.

A salesman will always work the commission structure to his best advantage. He will do exactly what you reward him to do. Be smart. Only reward behavior you want to see.

Are the totals kept separate or are they combined? For instance, let’s say he brought in $700.00 in store front and $1400.00 in residential for a total of $2100.00, would he receive 50% of the total $2100.00, instead of 30% and 40% respectively?

I just realized how old this thread was. How did it go?

that’s almost a 4 year old post
If he still checks in, I’m sure he would have the answer to Chris’ question now! since it was only his first week of a salesman at the time

People respond to incentives (not just cash) but I think this will motivate a sales person to really go get it. August my man comes back from Denmark and is gonna be knockin down doors for me. I am going to use this structure. Thanks for the great info!

May I ask everyone were are you finding the sales man and are you guys makingthem go door to door in residentail

When I sold yellow page advertising the young women were always at the top of the leader board. Something about them us guys just can’t duplicate.

So whats the new scoop on this? I tried hiring for this and I had salesmen say there is no way anybody will do this because there isn’t any guarantee on funds. They also said that it would be tough to fill this position because the salesman would need to spend there own money on fuel and car wear. So do you guys pay for fuel plus commission or what?

Wow this is old…and wow those structures I had back then were whack!

I can’t believe that I’ve been on this forum for that long already.

Those two initial salesman didn’t last long at all. They were not motivated like I thought they would be. Chris really has the best idea…I think that when someone feels like they have something guaranteed (hourly), they are more likely to show up to work. They know that they will make something. They will see it as a real job. Then when they are at work they will likely be motivated by the commission possibilities and the fact that their skills must at least justify their hourly.

I’ve used mostly door to door flier guys since then. I tried out two more salesman after those first two, but they bailed too. I didn’t have any of them long enough to tweak the commission and sales systems. The first two guys kinda just disappeared. I think it was because I didn’t set a schedule for them. So I learned a lesson there.

The last two guys had more of a set time but didn’t last long either. They were basically at 30% commission, I think. So the lessons I learned from them were:

  1. I need better hiring techniques.
  2. I need a solid training program.
  3. I need to give a base pay.

If someone worked long enough for me to track the ROI, I would be able to say what commission amount and style works, but…

I don’t really care to have a salesman anymore. At least not now, I have other things working out at the present time.