Discussion in 'Business Operations' started by NCL, Jan 18, 2012.

  1. NCL

    NCL LawnSite Member
    from NJ
    Messages: 132

    Do any of you guys have salesman? If so how do you pay them? By the hour or a percentage of sales?
  2. McCord L & I

    McCord L & I LawnSite Member
    Messages: 25

    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.
  3. NCL

    NCL LawnSite Member
    from NJ
    Messages: 132

    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?
  4. Bunton Guy

    Bunton Guy LawnSite Bronze Member
    Messages: 1,895

    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.
  5. Dr.NewEarth

    Dr.NewEarth LawnSite Bronze Member
    Messages: 1,476

    How come you don't do sales and hire another laborer?

    No-body around here would do sales for just a commission.
  6. cpllawncare

    cpllawncare LawnSite Silver Member
    Messages: 2,659

    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.
  7. David1970

    David1970 LawnSite Member
    Male, from Midwest
    Messages: 202

    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.

    For example:

    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.
  8. Bunton Guy

    Bunton Guy LawnSite Bronze Member
    Messages: 1,895

    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.
  9. David1970

    David1970 LawnSite Member
    Male, from Midwest
    Messages: 202

    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%.
  10. Bunton Guy

    Bunton Guy LawnSite Bronze Member
    Messages: 1,895

    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. :weightlifter:

    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 I’m able to close on 80% of our estimates. But if I’m only getting 4-5 calls a month and only two of those fit what we are looking for :hammerhead:

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