Hey Compu...gee, so much to respond to but I'll try to explain my thinking...out of order though.
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The sales team should go out and get sales. Account managers should look after the interests of the client and keep them happy. Account managers are liaisons for the clients that keep the wheels turning.
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Obviously, you work for a much larger company than I did. Where I worked, the salesperson IS the account manager! This might also explain why you think a 10-15% commission is a living wage. Your clients must have much bigger budgets. But, come on...if you're working with big budgets, a $50 finders fee is almost an insult.
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If he wants to unload that responsibility onto his sales people then I suggest he pay them a salary plus commission.
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I agree. Or maybe a fair "guarantee" that comes into play on months that their commission doesn't provide them a minimum amount of income. This is particularly useful to help new salespeople get over the hump when just starting out.
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I don't think this is a fair question.
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Why not? What is different in the equation from when the owner beat the bushes for accounts versus a salesperson (except the owner is now free to pursue their own interests and still make a profit from the salespersons blood, sweat and tears)?
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Of course he deserves the residual profits from his clients. This can't be disputed.
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I don't dispute that the owners should receive the bulk of the residuals. I disagree over the split. Using your example of 15% residuals for the first 6 mos., the owners are keeping 85% of the residual profits (remember, costs have already been covered)...not much of an incentive for a salesperson to put too much effort into maintaining the account. I mean, if you want good people to hang around, they need to make a living.
You mention that this is a team effort. You're so right. But, rewarding sales (the life-blood of your organization) with, I'm sorry, puny commissions is counter-productive. Management will spend so much more training, and training, and then training more new recruits. It takes a lot of the fun out of the project, nevermind costs a bundle. It also postpones those profits from being generated in the first place. It's the owners that have the keys to that vault.
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Using this stucture the sales person may consider it, at a certain point in time, more important to keep his existing clients then to find new clients.
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This is one of those winnowing the chaff from the grain things. You will have people that will sit on their keister and think the money's gonna keep rolling in. That's where your training comes in. 20% of your business falls away each and every year. The key to survival is prospecting. NEVER stop prospecting. You should leave a 20% hole in your clientelle list that always affords you time to prospect.
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The commission becomes a cost of the work. Tracking commissions and paying commissions involves some level of work. There are costs associated with that work.
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No, actually the commission is based on profit. Those expenses are already factored in before the commission.
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No offense taken. We're all entitled to our opinions. Expressing them helps us learn from others and even helps shape new ones!
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So right again...Thanks for being a gentleman/woman! Some people are not.