douglas

We are about to hire our first salesperson who is expected to be ’on the road’ most of the time. What is your recommended compensation method e.g. salary, part salary with commission, full commission. We provide a light industrial product typically around 100 per month.

Many companies fall into the trap of hiring a sales person on a heavily weighted commission basis and then wonder why that person burns out and quits after a short time on the job.

Your product offering will likely involve a somewhat complex sales process and so it is important to recognize that you have to make an investment in an individual who will be charged with executing this sales strategy.
The individual also needs to know that an investment is being made in their future success.

So, rather than jumping on the commission band-wagon, you may want to consider hiring the selected candidate on a salary (+ potential bonus) for the first year with the intent that they understand that they have a finite time frame (maximum twelve months) to develop their own sales and marketing plan and then implement it.

In most cases, the empowered sales person will generate the required first year’s revenue and margin targets and then will be amenable to moving to a limited commission split.

If they do not make headway, then it will be time for both parties to move on.

A key caveat here is the time and due diligence that has to be taken to ensure a strong and enduring candidate is selected.

Mike