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For this article, Sanitary Maintenance asked members of its advisory board for their insight and expertise on compensating sales reps. Here’s what they had to say:
When should a rep start to be compensated as a veteran sales person?
We have a basic program that all of our salespeople start with that include standard commission rates, expense reimbursements and benefits. Then each of our salespeople’s compensation plans are tailored to them specifically. This allows us to meet the needs that are most beneficial to the company and the employee. Because no two salespeople are the same, it is understandable that no two compensation plans can be identical either.
The main point to remember when creating a compensation plan is that compensation is only one factor in keeping an employee’s morale, satisfaction and performance up.
Compensation plans should include commission, benefits, expenses, incentives, bonuses and non-monetary compensation as well. Understanding that each person is unique and compensating them to their uniqueness will ultimately result in a more productive and successful sales team.
— Eric Cadell, V.P. of Operations, Dutch Hollow Janitorial Supplies, Belleville, Ill.
Our pay plans are virtually the same for veteran as well as new hires.
— Paul “Dutch” Owens, President, Gem Supply, Orlando, Fla.
We have only one commission structure but with a new sales rep we do develop a tiered approach of salary plus a commission. We do this so they can learn our system and we hope that it leads them down the road to a successful career.
— Chris Nolan, President, H.T. Berry Co., Canton, Mass.
The only time we deviate from our standard compensation model is when we hire someone to handle a specific piece or pieces of business. Usually, this type of person is not a full time JanPak employee and their compensation is based upon what they generate with their specific “book” of business.
— Rick Fiest, Executive Vice President, JanPak Inc., Davidson, N.C.
Veterans usually have established territories and are on the commission/base structure. It is our goal to see new representatives that are on salaries to get to commission/base structure as quickly as possible.
— Mark Melzer, President, NASSCO, New Berlin, Wis.
We use various combinations but all lead to total draw vs. commission. We switch as soon as the rookies surpass their minimal salary on a regular basis.
— Hank Josephs, President, Spruce Industries, Rahway, N.J.
The difference we have between new reps vs. veterans is only distinguished by putting a new rep on salary, then a salary decline program before transitioning them over to 100 percent commission. A new rep will have the opportunity to build up business over a period of time before going on 100 percent commission, but we typically do not go over one year on a salary decline program, so it can be quite aggressive if they start off at a higher salary.
— Charles Wax, President, Waxie Sanitary Supply, San Diego
It varies from case to case.
— George Abiaad, President, Royal Corp., Santa Fe Springs, Calif.