Increase Sales With Results-Based Compensation

joint venture marketing

Why pay salespeople who are not motivated or do not make adequate sales? If your joint venture product or service depends upon face-to-face or direct contact with potential customers and clients, you should consider using a results-based compensation system.

Auto dealers do it. Real estate agents earn it. Corporations pay brokers with it. What is it? Commissions. People who meet face-to-face or talk directly with a potential lead earn their keep by commissions. They close a sale and enjoy commission earned.

A set salary can become un-motivational when sales staffs realize that they still get paid regardless of whether a sale is made. If you use in-house staff, set up a motivational compensation system that pays them a percentage of every sale they make. Set sales goals so that each staff has a purpose and destination to reach with total sales. And incorporate bonuses for meeting and exceeding goals.

This type of results-based compensation will ultimately bring your JV sales staff greater salaries, and ensure that you hire and retain the best sales force available. If you prefer not to have in-house staff and your JV product or service can use an independent contractor, such as a licensed broker, set up a similar compensation system with them.

Structure for Results-Based Compensation

Simple Gross Percentage
– This is the easiest type of results-based compensation structure. When a salesperson makes a sale, a percentage of the total sale goes back to the seller. For instance, if one of your sales staff makes a $5,000 sale with a 10% commission, they earn $500 for that transaction.

Gross percentage can be tiered as the value of the product or service increases. For instance, you may pay a commission of 10% for items valuing $0-$999, 8% for items $1,000-$4,999, 6% for items $5,000-$9,999, etc. You can structure a tiered commission any way you like to motivate your sales staff, and when items increase in value, so does the commission percentage.

Residual Commission Income – Many JV businesses are offering not a product but a continual service. Service subscriptions are the way these businesses make money. When a customer subscribes, they pay a fee, usually on a monthly basis to have continual access to the service. The more subscriptions gathered, the more income your joint venture can realize.

Salespeople can be motivated to sell subscriptions for a residual commission fee. Every time they sell a subscription, they receive a portion of the monthly service fee for as long as the customer remains a subscriber. With this type of result-based compensation, a salesperson may have unlimited income potential.

Bonus – Bonuses are important for sales staff to remain motivated. As well as receiving compensation for each sale, a salesperson can earn a pre-specified bonus for meeting sales goals. A bonus could be cash, or something else of value such as an automobile, a Hawaiian vacation, or even stock options if your JV structure is a corporation.

Be wary of how you pay your people to sell what your JV produces. With results-based compensation, your income grows, and you attract the most talented and motivated sales staff. Make sure your JV business compensation is win-win.

christian fea is CEO of Synertegic, Inc. A joint venture marketing firm. He exemplifies how to profit from Joint Venture relationships by creating profit centers with minimal risk and maximum profitability.

To discover more joint venture marketing Strategies join his free joint venture marketing Wealth Report.

joint venture marketing

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.