I will hire my first sales staff in the coming months. I am eager to learn about:
Thank you,
Kevin
Excellent question Kevin,
I'm curious about that too, can't wait for a reply on that.
Hello Kevin,
Typically compensation is salary (you can google this for your metro area as it depends on location
Commission, this will depend on your margins and the amount it will take to give you compensation and take care of the overhead.
Cell phone, car allowance, and sometimes expenses for travel or client entertainment, and 2 -3 weeks of vacation, medical benefits also.
Supervising the sales force is generally given to the senior sales person with proven sales ability
Your success depends on your sales team, typically the sales cycle is 1 to 3 weeks for smaller accounts and up to 6 or more months for very large accounts. If you have solid leads to follow up on right away it helps.
By the way, where is your city located? Just curious
Doris
Thank you, Doris!
The metro area of which I speak is Indianapolis.
Is the commision usually a lump sum or a percentage of revenue--for a specified period--for a given account?
And to clarify--are you saying that within 1-3 weeks after hire & orientation, this position should begin generating small accounts for us? and how would you identify small (> 10,000 sf?)
Kevin -
Good Question. Salary of course depends on two things: geographic location and experience. In the NE particularly the greater NYC area experience sales people can expect a base salry rangeing from 70-125k depending on experience and contact base. I would think that in the IA region a base of 45-75k would be appropriate?
Commissions are generally structured as follows; 10% of first months fixed revenue then 1% of the monthly fixed for the next 11 months. After the first year it drops off completely. Additionally ( this is up to you) 10% of the sale price for any special work sold by the sales rep such as shampoo, w/c, floor refinishing , etc. that is above and beyond the contract specifications with the minimun requirement of the sale price being at least 2x the direct labor. Any inordinate supply and equipment costs that may have been required for the particular job need to be considered.
When I started in the business in the early 80's as a salesperson we were called account executives and had responsibilities of handling the customer's issues on a day to day basis. This is a great way of learning the business but nowadays I recommend that the salesperson focus only on sales. They're much more poductive this way.
Kevin,
As I am International based I can't tell you about figures and numbers as such, but I will tell you, that after been dealing with sales people for many years and used to be one my self, salary only, is not for true sales people.
A base salary and commision is what makes sales people get up at 3am and do a demo and go the extra mile.
This is something that needs to be thought out as you want to pay a good salesguy good money, but you do not want to pay too much either.
At the company I work for, half is base and in average half is commision. Yeah there are slow months but also good ones and if too many slow months I just have to run faster. That is the whole point.
We are currently looking for salespeople in Mid Europe and South Europe, but no way they will get salary only. Commision is a great motivator.
I fully agree on one of the comments. Let the sales people sell, let others do the strategy, management, key accounts.
Torben Andersen
Pioneer Eclipse
All very good points. Make sure you can afford to carry a sales person until he can generate business. To many owners hire a salesperson and expect them to generate immeadiate business.
Don't hire a sales person and expect miracles if they are new. Too many distributors hire a new sales rep and expect immediate returns when the reality is 90 - 180 days before there is a return. You should measure success weekly and give guidance daily! Start with a plan and then modify as needed.