Paying Your Sales Reps

Posted by: Rod Kurtz on April 25, 2007

Many small companies are tapping into or dove-tailing with existing sales channels with limited results. Assuming that the company is linked to the correct sales channel, the problem may be getting the sales rep’s attention. If a salesperson represents 20 products, he or she can present only a limited number of them. The decision regarding which products are routinely presented to customers is based on several factors: what the customer wants, needs, and expects, as well as how much money the sales rep can make from a product.

If there is a time-consuming learning curve for a customer, the sales rep may instead offer products that are obvious to the client. Make your product as user-accessible as possible.

If sales materials are below the standard of other products, a sales rep may not present them for fear that the subpar sales materials would reflect badly on him or her. Hire a company that creates sales materials, and pay for high quality printing and production.

Most importantly, if the sales rep has to choose between a product that will earn them $1 vs. a product that will earn them $10, the $10 product will win out. Pay your sales reps more based on how much they sell. Get them to sign up to sell more for a higher rate of return, perhaps 9% of the gross sale price for selling $500,000 of product instead of 5% for selling $25,000. Rates will depend on industry standards. This is counter to old-fashioned practices, but don’t be shy about sharing the wealth with the person who brings in the cash.

Marilyn Holt, CMC, CEO
Holt Capital
Seattle

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