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For this article, Sanitary Maintenance asked members of its advisory board for their insight and expertise on salesperson compensation. Here’s what they had to say about veteran reps:
What is the best veteran sales reps compensation strategy?
I think that the best compensation for veteran salespeople is a commission with incentive program. The commission is what keeps their paychecks rolling and has them continue servicing the accounts. If the accounts do not pay, or the commission declines, the customer-service level suffers.
The incentives are what help keep the veteran from becoming complacent and stale. The more they are incentivized the more likely they will be to promote the products that the company wants them to sell and to continue to sell after they have reached their proverbial “comfort income level.”
Draw vs. commission — you need to keep veterans on their toes and responsible for constantly increasing new business. As they handle a maturing customer base, customer loss is inevitable so you need to incentivize them to find new customers.
Straight commission is the preferable way. Without a commission structure, I think you can run into complacency.
The straight commission salesperson does not seem to be out there as in the past. The market place requires a more cohesive team approach to selling, with that in mind the salary plus bonus, works best for us.
We have chosen to blend our compensation model to include a salary and a commission component. Our belief is that most people, inherently, need to feel that there is a “base” amount of money that they will receive even if they have a bad month. Our base compensation is structured in a way that if you continue to grow your business, your base salary will go up commensurately, as you reach additional plateaus.
The veteran reps can contribute in becoming a leader in team sales, and their compensation can be a blend of both. More importantly they can become part of the critical path of the company’s overall vision and execution.
If you are talking about business that is up and down the street, then we still feel the best way to compensate a veteran sales rep is straight commission. This form of compensation still offers the most incentive and keeps the seasoned rep engaged and connected to the business growth goals, A/R goals and ensures that the reps performance is fairly and consistently related to performance in the field. In some other areas we might have some people on salary/bonus.
Our compensation is designed around a commission and base (salary) plan. We have found that the commission is a key component in rewarding sales efforts of the representatives and helps them measure the success they have in the field.