Paying sales comissions

[Heatstroke]

I know that there is probably a thread like this somewhere on the forum...but lets face it i'm just too darn lazy Anyway, i was wondering if you guys have any ideas on paying sales commissions to an employee that already receives an hourly wage. what percentage of the sale is reasonable and should the commission be spread out over a period of time.

[1Chavez]

Nope. Getting new jobs is like job security for the employee. The employee should do a great job that when others see the work, want to hire your company. Employee should do nothing more than "Here's our card, please call my boss to set up a meeting". If he somehow lands a huge deal, maybe a gift certificate for a good dinner, but no money on top of the hourly (unless his job is strictly sales).

[Heatstroke]

Nope. Getting new jobs is like job security for the employee. The employee should do a great job that when others see the work, want to hire your company. Employee should do nothing more than "Here's our card, please call my boss to set up a meeting". If he somehow lands a huge deal, maybe a gift certificate for a good dinner, but no money on top of the hourly (unless his job is strictly sales).

Thanks Chavez, I appreciate your reply.

This employee of mine is a supervisor that would like to increase his earning potential by drumming up new sales leads. We are not a huge company and I still do some of the physical labor, all of the bidding, customer relations, purchasing and host of other things. We are not able to hire a sales person at this time and I find myself at a point were I don't seem to have the time nor the energy to hit the streets and talk with people at local businesses. I thought that if this guy would like to find us some new sales leads it would be worth something... I currently give my clients a discount if their referral leads to a sale. Maybe he should be required to do this in his own time if he wants to earn a commission?

Anymore thoughts?

[clclawn]

its a great idea, and gives your guy a chance to control his income. I have been toying with this but cant get past what its worth. i guess landscape is easy, 10% of profit, but maintenance is a bit harder. let me know what you come up with.

[stoneproperty]

Decide what a new customer is worth to you based on annual profit of a seasonal contract. Eg. bottom line profit from new contract $500, if you pay a commission of $250, then you are profiting (after paying yourself and staff, equipment etc. etc.) $250. The next year, if you have a solid retention rate, you are back to making full profit ($500) on that contract.

It all comes down to how much is a new customer worth to you?
How much time will a salesperson spends vs. commission payment.

[andersontl2]

I have always paid my guys a bonus for getting more business. The more I make the more they make. Seems to keep them looking for new customers and they hand my cards out like crazy, so they might not get something that day...but they have spread the word, and I can close it later on. But I will always pay a bonus, I have worked in sales and I know that money works in getting guys to work and help me out. So why not throw a guy an extra $100 for picking you up some more work. Seems like a fair trade off to me!