Sales People Incentives

[PointyWilliams]

I'm looking for some helpful advice. I want to get a standard of what is customary for incentives for sales guys. I suspect that what I'm seeing at a station isn't fair, but staff is just used to it. If you want to send a private message instead, I'd still appreciate it.

It's in a large market (top 25). The station is a small fish in a big pond with no significant ratings, but they make money. Here's the deal: I've got plenty of experience outside of sales, and I'm looking at guys who are generally making about 20%. I'm being told (by a source I want to verify) that 20% is higher than higher "rated" stations owned by bigger corporations (I'll leave names out), and that they more typically pay 8-12% to sales guys. The theory being that the higher percentage is to be competitive against the bigger players.

I don't know if that's true, and also what is customary in terms of comps and incentives for a smaller station. For example, would it be customary to provide a cell phone or fuel expenses? (Maybe it's so obvious it's a crazy question). Also, what else is typically included?

I have several other friends that sell in other industries, and they say not paying for a cell phone or something for gas reimbursement is crazy. This staff accepts it (I think) because they're used to it. Each of them has experience, and have been with the company on average for 6-8 years. It seems to me that if they didn't think they were fairly compensated, they would leave.

I'm being asked to create incentives and structure to this department because I've done some impressive things in other areas. I realize it's different, but instead of coming up with some meaningless incentives, I want to just come out of the blocks by paying for the basics. My take on why the staff is stagnant is that if gas doubles during times like this, and they're not seeing any more money, how would they be motivated to drive out on speculative prospects? I'll stop here, I have a million questions.

 

[pocket-radio]

In smaller markets 99 & below I've always been paid 15% agency and 20% direct.
Then when I moved to a medium sized market and direct dropped to 12% and agency 10%. And if you miss budgets you're are paid less! The larger players paid even less. I also found in larger market most of the business was transactional agency driven..Management thinking was why pay the reps more if the business is going to come in anyway with ratings. Though I think radio revenue is changing because traditional radio budgets are being shifted to new media.. leaving less for radio. So the hunt is towards NTR and direct again.

I think many radio reps except lower commissions with no gas or cell phone.
And so good reps are leaving radio. The new crop of management could care less about getting results for clients. They focus on getting new business and hitting budgets. And the time tested reps who understand relationships and results count are leaving.. What's left is a crop of untrained reps posing as marketing consultants walking around with heads filled with crap courtesy of their sales manager. The media landscape has become to complicated and in general radios sale teams are unprepared to compete. Rep turnover is high.. bump and dump burn & churn..

Results and relationships still counts. Teach your reps to build longterm relationships and how to get results for clients. If you can accomplish just that reps will make money and clients will be happy and you'll get what you want. Incentives help but they're short term bandaid at best.

 

[PointyWilliams]

Thanks so much for your input. I have tried to suggest change in this department that provides some of the "lost" perks, and tell ownership not to be afraid to hold reps to certain standards. The mode has been (for too long), we'll underpay and under-incentivize, and we'll quietly accept a sub-par performance.

Another question for you, or anyone else...what about rep to Sales Manager relationships? what requirements are or were on you to account for your new business prospecting, or even who you visited/called on? Did the GSM ask to be in on a certain number of those calls, or did you only ask him to come along if you needed the support?

My significant disadvantage is this... I understand the sales dynamic a great deal, just not in radio. I've been in radio for over 10 years, but with no real connection to "radio" sales until recently. It's really amazing how different it is from other industries.

Thanks again for your feedback!

 

[pocket-radio]

Sales mangers should ride with reps on a regular basis. From my past experience they'd only make an appearance when asked or needed. Managers are forced into multi-tasking managing multiple sales staffs at one time. The GSM, manages the sales team from the office with occasional customer visits and true sales coaching/training.

I was accountable to a weekly proposals, number of specs and monthly/quarterly projections. Though how they tracked my success changed, monthly and quarterly projections remained the same. I'd review my progress with my manger once weekly. It was more like a weekly beating though. I'd have to arrive on time with my paperwork filled out with the number of pending proposals I'd expect to close. I'd have to rate each account by total dollars, month where the dollars would fall and percent of likely hood to close. like 80% 50% & 30%. It was often more of a guess and trust me every rep wrote some fiction. It was a joke because the GSM never really looked at the paper work. You could fill in the same prospects week after week before someone finally took notice. Sorry I rant.

I thought tracking appointments made more sense than proposals. Because it takes a meeting with a business owner or agency to pitch an idea or proposal. Appointments = proposals and a full pipeline of potential business.

The business is screwed up. We hire people with no experience, give them no training and expect them to set the world on fire. Along time ago, a new sales person could be up to speed in 3 months. Now it's more like 6 moths to a year and 2 years to be firing at full speed. Though most never make it more than 2 months before the next new hire is brought in. You'd think someone would figure out the revolving door is expensive. The last place I worked we counted 35 people who were fired in one year. Most were sales people.

The best book I ever read was The 33 Ruthless Rules of Local Advertising. I'd suggest you make this your bible. It's not about selling it's about getting results for clients. I found the GSM was good at selling and shoveling bull but wasn't wasn't very good at getting results for clients.

The reps who last and make money will often be in the position of protecting their clients from the GSM and GM. Clients buy people and will buy your sales people well before they buy your radio station.

Some sales skills are built in, but I belive you also have to train. You have to teach selling skills and how to make advertising work for clients.

The business has changed. Management is finding their new selling stars on used car lots and strip clubs. Reps are more like Tin Men than then qualified and trained advertising consultants. Advertisers have more choices than ever. And many are shifting traditional radio dollars to the Internet as the local business owners become more ad savvy and sophisticated.

Sorry I've gone on..

Good luck..

 

[Shark]

I'm in a large (but not major) market and get paid 10% on agency and 18% on direct. In our market, gas allowances and even expense accounts for reps went out with mullets and suspenders.