10 Bellevue Salary vs. Commission Advice
10 Bellevue salary pay advice / 10 Bellevue salary vs commission advice. How to pay your employees in a sales environment – by 10 Bellevue
If you are just starting your business and are wondering about your employee compensation packages, you have probably thought about salary vs commission. Hopefully this article will help you.
In today’s economic climate, it’s only natural for someone to be concerned with how they are compensated for their efforts within a company. Throughout the history of the sales and marketing profession, there is always the debate of commission vs. salary.
There are several factors to look at when deciding which is more effective for compensating your employees.
10 Bellevue salary vs commission advice suggests that you…
Begin with the end in mind. If your company puts a heavy emphasis on customer acquisition and feeding the sales funnel, in my opinion, your compensation structure should be heavily weighted on new customers.
An employee’s efforts should be reflected in their pay. However, if your company puts a heavy emphasis on customer satisfaction and follow-through, a base salary is most likely the best option.
There are several pro’s and con’s to each, but with some research, you can figure out which best suits your company and your employees.
10 Bellevue’s over-simplified ‘value of a customer’
[AVERAGE LIFETIME VALUE OF CUSTOMER – AVERAGE COST FOR SERVICES RENDERED = AVERAGE COMPANY PROFIT PER CUSTOMER]
*Review the video at the bottom of this page for more clarification on this formula.*
If the costs outweigh the profits, you’re in some trouble. Here are some quick examples.
If you are paying your employees a fixed salary, and the cost outweighs the income they are bringing in, you will quickly have to cut the poor performers and replace them with higher-producing employees.
If you choose to keep those under-producing employees, you will have to increase the value of a customer by decreasing your company costs. Is there anything that you can in-source? Are there any additional services offered that aren’t bringing in a good ROI?
Don’t undercut the value of your employees.
If you are paying your employees too low of a wage (salary, commission, or a mix), you can expect some heavy turnover on the lower levels, and even some in the middle area of your organization due to burn-out.
10 Bellevue Salary vs Commission advice:
Managing salespeople is a tough job. You’re not going to please everyone. So think, who would you rather not piss off: the sales rep that is getting the job done by going above-and-beyond, or the sales rep that is just sort of “hanging out?”
The following article might help explain this point: http://www.netmba.com/mgmt/ob/motivation/mcgregor/
Below are some typical pro’s and con’s of employee pay in a sales environment:
10 Bellevue Salary Vs Commission: COMMISSION
- gives salespeople a major incentive to work very hard on behalf of the company
- creates a hunger among employees that salary does not
- staff shares in their employer’s success
- easy to determine the top performers
- pay costs are adjusted according to income = fewer, if any, layoffs
- no cap on employee’s income
- leaves employees with compensation uncertainties
- salespeople could ignore non-sales-related tasks (customer follow-up, customer retention, and customer satisfaction) and even try to shortcut some procedures just to get the sale
- High rejects on the sales-support and delivery of services may be uncontrollable to the employee, but is reflected in their pay
10 Bellevue Salary Vs Commission: SALARY
- provides salespeople with the security that they can maintain a certain lifestyle
- Helps employee job satisfaction and employee retention
- fosters an environment of complacency, eliminating employees’ incentive to perform.
- Employers are unlikely to distinguish significantly between the best performers and the mediocre due to lack of pay differentials.
I’m not sure who this guy is and I don’t endorse his product, but watch the short 5 minute video below and this might be able to help you wrap your head around the cost of an employee vs. their value added as described in the formula above.
10 Bellevue is a sales and marketing company based in Bellevue, Washington. 10 Bellevue represents Fortune 500 clients and puts a strong emphasis on customer acquisition AND retention. Therefore, 10 Bellevue provides a mix of commission, base / hourly pay + commission, and salary (depending on the sales campaign and on the person’s position within 10 Bellevue) to increase results. At 10 Bellevue – salary is reserved for our mid-level and upper-level management.
By having a compensation structure where employees are rewarded for their efforts, 10 Bellevue salary ranges exceed nationwide averages. 10 Bellevue consistently exceeds our clients’ goals and have expanded into several markets.
10-Bellevue keywords: [10, 10 Bellevue, 10 Bellevue Salary, Bellevue, Salary, Bellevue Salary, 10 Bellevue Company, 10 Bellevue Company Salary, Salary Pay, 10 Bellevue Pay, Salary Commission]
Since this is a highly debated topic, your comments are welcome.