One of the questions I’m asked most often is, “How should we compensate our sales people?”

          Let me begin by suggesting that the great sales people in our industry don’t perform just for the money. They enjoy the challenge of managing their own account lists, the creativity that fosters great campaigns and find personal gratification in the value they are delivering to both your clients and your audiences.

          Having said that, it is increasingly difficult to attract and keep good people in broadcast sales.  We are competing with other sales organizations, from technology companies to insurance companies, and from car sales to real estate sales for the cream of the crop.

          In many markets today, truck drivers and used car sales people earn more than the average broadcast sales executive. Not to speak disparagingly of those professions, the intellect and self-management skills it takes for broadcast account executives to work effectively with top decision makers certainly requires that our compensation levels be at least competitive with those other professions.

          Here are a couple of guidelines I use with my clients when developing sales compensation plans:

1.  The best self-managed sales people perform best when on a      commission system.

2.  The basis on which I develop commission rates revolves around, oddly enough, the average housing prices in your market. Your commission structure should provide the opportunity for an above-average producer to realistically earn 30% of the value of the average home in your market in their second full year of employment with you.

          Until we are prepared to offer competitive compensation structures to our top performers, we will continue to find it difficult to attract and motivate good people.

          We tell our clients that, “advertising does not cost, it pays.” If you do not already, you should apply the same philosophy to your company’s sales commissions. Lucrative sales compensation structures do not cost, they pay.