Know-How Exchange : Advertising/PR

It's very demotivating to convert the account into a house account. In your biz, there is ongoing maintanence to keep the account. You shouldn't penalize him/her for retaining a client. I prefer to work straight commission but I wouldn't touch a deal that converts to a house account.

There are a couple reasons someone would take on a line on straight commission. One, (me) take it on because of its potential and don't want a cap on my earnings. The other, some take it on because they don't want a committment-- and just wanna do a "look see".

Just because they are working straight commision -- totally performanced based does not mean you are "risk free". Add the cost of missed opportunities. I don't care what you pay them, dead weight is costing you tons in missed opportunites.

Why are your people on draw having no success? Lets look there first.

House accounts are bad. You can drop to 5% but don't make it a house account. What if they grow?

Would you have gotten the account without the sales person? Its a sure way to move sales people to the competition.

Michael

I wonder, why do so many businesses work so hard to make their sales people miserable?

The commission schedule has to be profitable for you and the salesperson. Basically your biz is a service (except displays), so you have little in COG's, certainly have overhead as far as support. But you also have to consider what the market will bear.

When I take on a product line-- I am usually given a pricing grid to work off of. There are some items that are commodity type, hard to demand a higher price-- these do not have a high margin for the manufacturer. Those I am paid as low as 4%. But they are also everyday items-- orders are placed for these products daily.

Others, it depends on the competition, budget, etc. I have the flexibility to earn as much as 30%. In additon-- I can add an "overage", which is split between me and my principal.

And I cover my own expenses, health insurance, car, etc. Which is what your sales candicate wants to do-- be an independent agent. Also when I take on a line, I want an exclusive territory. This eliminates conflict. I have taken on product without exclusivity and without exception, we end up arguing over who initiated the sale.

I have also worked for companies that have a mix of agents and employee salespeople. Typically, my commission is twice what those getting a base are paid. I would never consider a line where I do the effort of getting the sale and have the commission drop-- or worse, as I stated in my first post-- become a house account.

Nothing happens in sales without an effort. So your draw salesperson might have been at xyz company, but your agent is the one who got them to buy. Now, that doesn't mean the 1st salesperson wasn't doing his job. It could be timing or other issues. It can take multiple touches to win a client. The last one just got the sale. Those kind of conflicts only happen once to a good salesperson-- they will leave. So give that some thought in your planning process. If you aren't going to divide accounts by territory, you might by niche, or find another way to register an account.

But as Telemoxie says-- don't make your salespeople miserable. We sell, we don't push paper. I do my basic needed reports my principals demand-- but when its reports for the sake of busy work, I tell them if they need this -- they need to buy an employee. I am paid only on performance, I move fast, and don't want a cumbersome system to slow me down.