The efforts of many replacement contractors to retain top sales talent begin with this truism: Salespeople are motivated by money. Consequently, they structure sales compensation packages that, in effect, make the sky the limit.
“There is a price to pay for quality salesmen,” says Todd Schulz, vice president, Weather Tight Corp., Franklin, Wis. “I can either spend my time to recruit new salespeople, teach them the business, and have that constant turnstile, or I can reduce the burden by having very qualified salesmen that I'm willing to pay better wages than they can get elsewhere.”
Schulz says salespeople “want money and they go where the money is.” For that reason, “we make sure we pay them at least 5% more than any other competitor can afford to pay them.” Above and beyond the extra money, this means creating an attractive overall compensation package that at Weather Tight includes such benefits as paying cell phone bills, health insurance, and profit-sharing.
Salespeople at Maine Window & Sunroom, Kennebunk, Maine, continue to earn a larger rate of commission the higher their sales totals, says president Jim Lang. In addition, the company has monthly and annual goals and incentives that enable salespeople to keep earning more. Maine Window & Sunroom also pays its top sellers a larger percentage of their vehicle expenses. On top of that, supplier sales programs and contests add another layer of incentive to keep salespeople producing.
“When you look at the package of the guy who produces, let's say $1 million, for us, he is making 3% or 4% more than the guy producing $600,000 or $700,000,” Lang says.
Fine-tuning sales compensation is a constant process. Lang is currently testing a program in which more of the accumulated “overages” on jobs will go to the salesperson as his sales volume rises. What is normally a 50/50 split with the company can become 100% for the salesperson. “In that case, we are giving them the profit, but they have to sell the job clean to get it.”
He's trying to strike a balance between selling a job just to get the volume and selling at full margin, Lang explains. “It's a little more profit-sharing, tied to volume.”
At Dixie HomeCrafters in Atlanta, the danger isn't that salespeople will top out on commissions. Instead, says Rodney Webb, vice president of sales, it's that burnout can cost the company its top salespeople.
“In this industry, guys get tired,” he says, “so when we have top-quality salespeople, we try to promote them into being sales managers and general managers.” Those promotions are based on testing for skills to determine whether candidates can train other salespeople. “If they can, we put them right into management,” Webb says.