I just had to pipe in as a former salesperson...
Compu's statement:
Quote:
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Why would you want to get someone else rich on your back... might as well get a regular job.
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I think that's a little one-sided. IMHO, you both should get rich off each other's backs!
A commission should reflect a good-faith estimate of the value of each components input and benefit from that input. Ask yourself this, did you deserve the residual profit that you got when handling these accounts by yourself, regardless of how long they were with your company? Why shouldn't your new salesperson benefit too? I look at it as income you would have never received if not through the salesperson's effort. With a continued residual commission equal to the starting commission, a salesperson would then be invested in that client remaining a client long-term, rather than be in a perpetual search for new clients for that larger commission. At least consider structuring the residual commission so that they increase over the years they are with your company. That way, the salesperson will naturally hang onto the clients that pay a larger commission and would be happy to turn over less productive accounts to new salespeople for them to build.
Please keep us informed of the outcome...expecially long-term. I'm curious if you will see short-term benefits with long-term client loss. And a higer turnover rate in salespeople. Good salespeople are a treasure that keeps on giving. After all...they're just tryin' to make a good living too!
(Sorry Compu, I'm not trying to insult you, just honestly bringing up how my idea contrasts with yours in this one, small area.)