A distributor’s success is directly tied to the performance of its sales team. In order to grow, distributor sales reps (DSRs) need to remain hungry and motivated to land new accounts, and continue to serve existing clients well. Figuring out the best compensation plan for DSRs is critical.

There are a number of options available for compensating salespeople and the biggest determining factor tends to be service time. Distributors pay veteran reps quite differently from new and inexperienced salespeople.

Sanitary Maintenance surveyed our readers to determine how the industry compensates distributor sales reps. From there, we asked about commission structure and salary amounts. Distributors can use the results to compare how competitive their compensation plans are to others in the industry.

Money tends to be the best motivator, but it is only one “carrot.” Check the survey results to see if there’s an additional incentive that could be added to improve DSR performance.

Sanitary Maintenance last surveyed its readers on DSR compensation five years ago. Since then, the economy has improved; in addition, the cleaning industry has come out of the Great Recession experiencing small, but steady growth.

During this time frame, DSR compensation has changed very little. Based on the survey results, distributors’ answers are very similar to five years ago.
 
Most veteran DSRs are still compensated with a commission-heavy plan, as they were in 2009. The most common commission for these reps remains at 26 percent to 35 percent. However, the average salary for veteran reps has increased. In 2009, the majority of distributors paid their veteran DSRs between $25,000 and $39,999. Now, a majority of reps earn between $50,000 and $64,999.

Distributors feel that a salary focused compensation plan is still best for new and inexperienced hires. A majority of distributors still pay a salary between $25,000 and $39,999 to these reps. Distributors who offer newer salespeople commission have reduced the percentage. In 2009, 26 percent to 35 percent was most common; now commission is between 16 percent to 25 percent.

Money continues to be the best incentive and this notion is furthered by the fact that cash bonuses were the most popular motivator used by distributors in 2014. Five years ago, sales goals topped the list. 




POSTED ON: 11/14/2014