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Discussion in 'Business Operations' started by NCL, Jan 18, 2012.
Do any of you guys have salesman? If so how do you pay them? By the hour or a percentage of sales?
Great question! Looking at doing the same thing, interested in hearing the response!
I have a brother in law in hardwood sales, and a best friend in pharmaceutical sales, both said that they would do it in their off time for a percentage of sales.........contemplating taking them up on the offers.
I have a friend that lost his job,so he is willing and able to do sales calls, not sure what the percent would be?
A few years ago I gave my last sales guy a starting salary of around $35K + 7% commision on a 3-2-1 format so that he was also responsible to keep up with the clients satisfaction level. If we lost the client....he lost his commision for the rest of the year on that client. It was paid monthly based on that percent spread over a year.
How come you don't do sales and hire another laborer?
No-body around here would do sales for just a commission.
If a sales guy has a large base salary what incentive is there to sale? Just curious? I would want my salesman to make their money on the amount of sales they create not a base salary.
I am a salesman. Based on my experience, a fair salary plus a commission will produce the best results from a good salesman if the commission is based on profitability.
Job goes for $5000.00
Job costs = $4000.00
Job profit = $1000.00
15% Commission = $150.00 paid to salesman.
No commission paid for any job less than 10% profit.
After salesman sells $200,000.00 for the year raise his percentage to 20%.
Pay an extra 5% for leads he generates himeself.
The higher the profitability, the more the salesman makes.... the more you make. This removes his temptation to sell high volume but low profit if he gets a flat rate or % of gross sale price.
How many of the leads does the sales men NOT generate himself? I always expect a sales men to generate at least 90% of the leads on his own.
That will vary from company to company and also depends on the services being offered. I have worked for a company that had so many calls coming in, the salespeople barely kept up.
Some companies may not invest much in marketing and advertising (or are not very good at it) and the salesman will have to be aggressive at lead generation. Expect to pay a higher salary and commission rate if you want to attract and keep a good salesperson if your phones aern't ringing.
Last year, I generated about 50% of my leads. The other 50% were the result of prospects responding to advertising and referrals. When I did not have leads coming in... I went out to get them.
I am working for a different company this year where I need to generate more of my own leads. Will propably be close to 75%.
Dave what made you transition from the last company you spoke highly of? Were their expectations to high? Bad management? Last we spoke through PM's you gave me super good selling tips.
IF my phone was ringing off the hook I would have no reason to hire a salesman. Our advertisement isn't working like it should in our market. I THINK we have tried what should be most effective and have gotten little response. That is the ONLY reason why I would want to hire a sales associate. If I can't bring the leads in myself through our advertisement & word of mouth I need to find another outlet.
I screen all the calls coming through the pipeline and can tell if the client fits our desired "niche" if not we pass them along as a referral to another company that might fit their needs better. With doing this Im able to close on 80% of our estimates. But if Im only getting 4-5 calls a month and only two of those fit what we are looking for