Quote:
Originally Posted by fisher318
Ok, after running a pretty successful SEM service for several clients over the last 6 years with my 2 partners, we want to bring in 2 new sales reps so we can focus all of our time on the services we provide our clients. We have 2 very well known friends who are great sales people. They came to us with the idea of working for us on straight commission. Our services sell for a set up fee along with a month-to-month residual recurring fee.
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Currently you're splitting the pie 3 ways. Also sounds like you don't have employees at the moment. Introducing 2 sales people would be your first "employees".
I assume most of the work/costs are front loaded for new clients. This would involve setting up the campaigns, corresponding with your clients to get plans nailed down, etc. This is probably why you have a setup fee.
Quote:
Originally Posted by jawn_tech
Are they going to be on call, the face the client deals with continuously? IMO, between somewhere of 25 - 50% profit for what they bring in.
If it's more of a "finder's fee", a one-time sales pitch then turning the client over to the company, 10 - 20%.
A quote my father used to always tell me, "you don't get what you deserve, you get what you negotiate".
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25 - 50% of the profit is way too much, in my opinion, even if they are doing continuous support. You'll be doing all the work, maintenance, and problem solving. Why would you want to get someone else rich on your back... might as well get a regular job.
A finder's fee of 10 - 20% sounds more reasonable but puts no onus on the sales team to provide realistic expectations to potential business. You want your clients to stick around for more than a couple months.
I would suggest you setup your sales team commissions in the following manner;
1) small one time new client finders fee
2) residual income for the next 6 months
3) smaller residual income for the next 6 months after that
4) smaller residual income for the lifetime of the client after that
If the client leaves at any time you obviously stop paying commission. As well if the sales person decides to leave you also stop paying commission to them. If you don't want to outright STOP paying them commission make sure you have an end date in mind (1 month, 3 months, 6 months after they leave). I would also make sure that commission is paid on the payments of your clients, not what they are billed. Sales that you can't collect on shouldn't cost you money.
Example
Sales guy Bob gets paid the following;
$50 for each new client he brings to the company.
15% commission on each account for their first 6 months.
10% commission on each account for the 7th - 12th months.
5% commission on each account after 1st year for their lifetime with the company.
I think this type of arrangement would work for both the sales people as well as the company. Often new clients will speak with their first point of contact whenever there are problems with their service. This is usually sales people. They are compensated for this by getting paid their finders fee as well as an increased commission for the first 6 months of the client's business.
The longer the client is with the company, typically, the less they will be speaking with sales. Therefore their commission steadily drops.