What is a good Advertising Sales Commission Structure or where to find one?
We need to start an aggressive selling campaign for the advertisement/projects within our agency & magazine. Hence the need to start hiring advertising sales executives and have a solid commission structure for them to be moviated to stick around.
I would like to get some good solid feedback on a few things; setting up our primary sales commission structure and to see if we are on a good solid footing with our current sales commissions.
These are our current media kit and sales package.http://www.redcometstudios.com/Documents/RCS-SALES-DOCS.zip
BACKGROUND INFO ON RCS:
My company Red Comet Studios that has 4 different division under it; Publishing, Film/TV production, Marketing and Model/Talent management. Our flagship products is called SwimSuit Illustrated and is currently being released 4 times a year, but we will get to the point of being a 10 issue per year magazine. Most recent issue of SSI http://issuu.com/jlgoodwin/docs/swimsuit_illustrated_magazine_march.
I've designed commission and gain-share programs for many industries and I agree with Mohammed, the essentials of an effective commission program are based on what will drive the behavior you want regardless of your industry. Every industry typically has a certain set of types of commission programs and most all are not effective.
The sales person needs to get some immediate benefit from good sales and additional long term benefit based on how the type of sales in your industry generate profit for the company more long term benefit based on how the company is doing overall. It isn't rocket science to set up this type of a program but it does have to be done correctly or it will cost you more money than it makes, alienate your best performers and restrain growth. Call us if you want help setting this up. Will Moore, Moore Performance Group
Hi Joseph. I sent you a private message with some specifics regarding a project we completed for a full sales program deployment. Hope it helps.
The magazine industry lives a lot of times based on the publicy that it gets from its sponsors. The commission range statrts at 1% and goes to 5%. The products are generally considered to be on the range of all consumers types and therefore the sales have the tendency to be high. These commissions value end up being higher than espected since the sales levelss are also high. The commission exact percentage value should be defined according to the sale potencial of the product, the consumer's target classes and the established objective previously planned by the sales manager. Of course that if the seller achieves higher values than the established ones on the sales plan he/she should have the highest percentage and its range should vary according to intervals on the annual liquid sales value, i.e., the sales after taxes.
OK This question is a Classic in the pharm industry when you build a new reps team to launch a new product.
Team building, qualitative and quantitative parameters are to be introduced in your rewarding scale.
A minimum salary or nothing if your local laws allow This.
Qualitative: could be the number of calls per day 8 normal, up to 10 a fix reward up to 15 double reward . etc...
Quantitative: the sales contract signed, 1 per day normal, 2 to 4 X% on sales , up to 10 X+Y% on sales.
Team reach Z contract per week a fixed w$ amount for each members.
It depends on your market, your people, you cannot always rent sales machines, this is what I would introduce not only quantitative parameters.
Commission is based on mutual understanding and accordingly agreement is drawn and signed by the two parties as MoA.
Usually the commission ranges between 10% to 15% however you can start with 5% and then increase the commissions based on their results and have increments of 1% every quarter or in a specific period of time. Give your team reachable goals. Throw in a bonus once in a while to keep them on board because training is the biggest expense a company usually has. Good Luck.
In the publishing/advertising business, sales commissions are normally paid on advertising contracts. Commissions can be paid on total contract value or monthly/quarterly recurring revenue from the contract. Sales commission rates may change with year of contract.
Renewal of contracts may provide commissions or bonuses.
Different type of advertising contracts may have different rates of sales commissions.
We have a lot of free articles here:
These two documents may also help you:
What Sales Commission should I pay my new sales person?
Sample Media Publishing Rep Sales Commission Template
We may be able to assist you with this, Joseph. Please PM me.
A good Advertising Sales Commission Structure , I think its very difficult to make or build one , But as I know from my personnel experience & from international companies who could score strong record gradual increase in gaining the target as long as the employer hard working gradually -there is increase ,what is the harm paying high commission , in some companies the commission reaches more than 50% of the deal .
It would depend on what kind of talent you are trying to attract much more than what industry or product you are selling. Offer what you desire, and if you find the responses are not in keeping with what you are trying to attract, change course. I would ask your current staff to weigh in as well. Good luck.
Make sure that you provide bonus incentives to encourage your goals being hit regularly. Structure it so that you won't take a loss if the sales person is unusually successful.
A salary and commission would be appropriate. The associations related to your business are very good sources od updated compensation structures. They are also great sources to find high quality sales people.
One very important point - if you want stellar results. do the following two things:
1) Hire the best away from the competition and/or find out who is looking through the associations. The compensate them substantially so that they hit the ground running. Find out what motivates The "Gift of God" sales type" Usually they want a piece of the company and they earn it.
2) If equity is not possible , then offer a discretionary bonus structure to the gift of God type, with an emphasis on not just groaa sales, but more importantly net profits. I would also have these types assessed to make sure that it's equity that motivates them. I would then offer the discretionary bonus structure and points towards shares based on longevity.
Those that can hit the ground running create cash flow quickly. If it's quality business, the sales person deserves an equity and bonus structure.
Hi Joseph. Its best to design a scheme per job to drive and reward the behaviour you want. Its about analysing what managements intent is for the job and then desiging compensation (incl commission) that will drive this behaviour and especially reward outperformance. We design these schemes and would gladly discuss further if you want to engage us to do this. Sales schemes are not industry or country specific but rather job specific.
Sales commission structure is basically the same regardless you are in advertising or something else.
Take the structure as an empty framework that you need to design or tailor first, then to fill it with details, and verify that this structure (framework + details) serve the purpose that you are trying to reach and the numbers that you are trying to achieve !!
The salary should be based on the 15% of the committed Sales Target.. So, you should first calculate how much business a sales executive can fetch on an average..
Further you can make 10% salary and 5% commission on sales
Joseph ... Here's an article that should answer your question. http://www.foliomag.com/2012/2012-advertising-sales-salary-survey#.U5KHo_ldWSo The salary survey provides you with guidelines and benchmarks you can use in putting together a compensation package for your sales people.