Darrett

Hey guys, how you all doing?

I will be offering SMS services/mobile websites to local restaurants, and I have hired a salesman to approach them. I have it set for him to receive 50% of the initial sale as commission right now.

My question is, if I sell my SMS services ($297) monthly, what would be a fair amount of the monthly to give him? Since he's going to be the one that will be gathering and setting up table tents/all advertising stuff, I have to give him a piece of the monthly.

Anyone have experience with this that can help me out?

Thanks,
Darrett

If you want to reach for your dreams, first you've got to roll up your sleeves

nickhumph

That is a pretty big monthly fee...

Increase Page Conversions by 72% through the most underrated marketing tool out there!

Darrett

Up to 4,000 texts a month, I run all the campaigns, supplies, labor.

I got the pricing from another Warrior and he's using it effectively so I believe I can do the same.

Thanks

If you want to reach for your dreams, first you've got to roll up your sleeves

webworkssolutions

Anything from 0 - 20%
Call me greedy but depending on the amount of work I might not even give him anything apart from the initial 50%. 50% of the initial sale is pretty standard for salesman (in my experience, and I've always made sure they were happy with what they got)

But that said, if he really is doing a lot of work 20% might be a good number. If you're feeling generous and you feel you can still turn a good profit with giving away more you could even go above that. But my recommendation is 0-20%.

tycoonms

id say between 50-75 a month. Also I think you should offer other package sizes, youre leaving a lot of money on the table using a one size fits all approach

build upsells and cross sells into your initial package

nownzen

I offer 20% commission both on the initial sale and all recurring monthly payments on same sale. Seems to be pretty effective and extremely competitive, especially if you can get a qualified rep who had sold either newspaper, coupon, advertising (agency) and the like to businesses - their scale is much smaller.

Also, I generally throw out some spiffs which are incentives to sell a particular service at a minimum pre-determined price point such as 5 sales $50 bonus each for $250, then like each sale after that $75 or the like. It's just an example, but it's a great motivator. The spiff/bonus is in addition to any commissions earned.

I also spiff on upsells or addons.

Hope this helps!

Wishing you the best and continued success in the rest of 2012 and beyond!

isaacburks9z

I did exactly what your salesman will be doing for you . 50% is great for him, a high percentage but if you don't have a contract in place for the businesses it wont be as good from what I have experienced. It costs you some money to get it up and running not sure what methods you use but it will take time.

I was getting residual on a monthly bases off of every reacquiring payment for any service I sold ecommerce, places, mobile whatever. Set at 35% so it was a good deal. It quickly snowballs if your are getting the client base. It will take time to see a good amount.

If I were you I would have a few different price options available at a 6 month or 12 month agreement or a month to month. Pricing being slightly different and commissions being different. 50% is too high if you ask me unless it is a one time commission. You need to retain your customers and build your client base. I like contracts.

Just my thoughts as a salesman who has sold the product and many other things and ran a business of sales guys.

NewParadigm

Do you have a setup fee? I'd front load sales people as much as you can, maybe a big chunk of 1st month(when collected by check/CC) and ease off a bit on longer term residuals. You want them to be excited as hell to open new accounts. Hire someone else to do any ongoing mundane maintenance/customer service after that. Pay weekly if you can. You want to give them quick success to get them going. You could also design a real aggressive ramp commission to get them up to a minimum income, then slack off from there as well.

there are numerous books out there on compensation that works for sales people.

Darrett

Thank you everyone for the great replies, this was exactly what I needed!

The bonuses and spiffs are really what are going to help get me some eager salesmen.

And I agree guys, I'm not doing a one size fits all approach. I will have 3 different pricing options.

Thanks again

If you want to reach for your dreams, first you've got to roll up your sleeves

nickhumph

Do you pay him hourly or on commission only?

Are salesman happy with with no hourly rate even with a decent commission?

Increase Page Conversions by 72% through the most underrated marketing tool out there!

Nick Barton

The big problem if you give ongoing commission is that it builds up and generally salesmen with full bellies sit back. If I were you I would try and avoid cumulative commissions altogether.

I have learned that from experience!

If you have him doing the dog work as well pay him another 50% on the 13th payment. That way at least you should get a year out of him.

And for nickhumph commission salesmen would regard an hourly rate as an insult! They even pay all their own costs, car petrol etc and still expect to make at least £60k. As far as they are concerned it's their business. The snag is their only loyalty tends to be to themselves!

If You Want to learn quickly, watch an expert! Hear It, See It, Do It!

nickhumph

That's great! I wonder why they just don't do research on WSO's and sell them and keep the commision all to them selves

Increase Page Conversions by 72% through the most underrated marketing tool out there!

goharnett

50% commission on the upfront sale is good on the one time mobile site sale.

In general, a good sales person is your business. Treat them well.

On the monthly upsell for texting services, you might give them it all upfront, say 100% even swallowing some cost, then you get all the recurring monthly and they are happy. next sale.

Or you could give them 50% on the first month upsell too. And then after selling 10 units, that is, they prove their stuff to you, then give them a 20% recurring after that. That way you've a cushion. And honestly, setting up the accounting for all that is not always fun.

And you don't want them bucking out on you several months down the line with you still paying them a recurring income. put in a clause for action in your contract.

That recurring income to them comes at the price of them servicing those clients with phone calls and service calls. They are the point of contact for the client. They have to stay in the game.

in general, if you treat your sales people as integral to your business, not as expendable or "pay them as little as I can" then you'll grow. Pay them well. Incentivize them. You'll grow.

If you find 1 good sales person, who produces regularly, after going through 10 of them, then you are beating the odds. You treat them well. You don't milk them.

Eugene Harnett's Official Website
...no longer In the Pursuit of Happiness!