Ask the Experts | Salesperson and Customer Relations Compensation

Question: What is the best way to compensate a salesperson that would also be managing and taking care of customer relations in our company?

Gary Elekes; Founder, EPC Training:

The very first concept is meritocracy. It should be merit-based. Customer relations is a broad term. I would classify that and detail it more, I would say create client experience principles. Have them written down and define them. Tell someone, including myself, Wally, and Drew if we’re all working in your company, what are those things? What are the client experience principles – what are the expectations? That’s a clarified piece of information for a comfort advisor or a selling tech or anybody in your company. Once we do those things, compensation can be in alignment.

Alignment is everything. People are going to do what you ask them to do. Almost everybody in today’s world shows up trying to figure out what it is that the owner or manager wants them to do. We’ve been wrestling with that for years, to just create the structure of what we’re trying to accomplish. But once it’s done, you’re a long way down the road. It’s a one-time investment.

If your company is on performance-based pay with your production crew, I’m a big advocate of gross profit dollars being the measurement for the pay plan for a salesperson, which is going to include customer follow up, a call to walk through, etc. It’s going to be a higher percentage than it would be if it was top-line sales but we want the comfort advisor or the selling tech to bring their gross profit dollars per hour, per day. We need that to be in alignment so when we pay them based on gross profit dollars, we’re essentially setting up an aligned compensation system with the production side, the selling side, and the company profitability side. So, it’s a three-legged stool.

If you’re not performance-based pay and the production teams are hourly, you’re probably going to get a little bit of pushback on that. It can still be done but it’s more sales process at the leadership level to convince the sales people that managing the customer experience after the fact is beneficial. I think you’re going to have to convince the sales person that it’s in their best interest to create referrals. It’s going to help their average ticket. Probably give them opportunities to speak at neighborhood events, things like that.

I think the main thing is that you create customer experience principles. You define those. You create compensation systems that are aligned and you set them up where it’s meritocracy – where people understand what it is you expect them to do and it is defined in a role description. For us, that’s going back at the end of the job, doing the walkthrough – it’s a second walkthrough. The production side did it to begin with, the comfort advisor then asks for the referral. There’s an opportunity to ask for the reviews electronically – there’s just a whole host of things we can go through that’s part of that process.

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