If you are going to keep your sales reps happy, and more important, your top billers happy, here are three points to consider:
1) Determine what you are willing to pay. Most of us use different sales percentages in cost per sale. Depending on the variables that you might include in cost per sale and what some others don't consider cost of sales, it should hover between 17 percent and 22 percent. With turnover and high guarantees, this could escalate,so simply put: Pay to keep your top billers in the company without being held hostage. Don't take it personally if your top reps are making more than you. Look at the profitability they are providing for the station. If the top reps are not making their goals, that's another thing. Do not cap earning power. They should know that the harder and smarter they work, the more they will be compensated. Your compensation plan should align itself with your sales department's strategic plan.
2) Compensation model. In some cases, I have seen top sales reps bringing in more than 40 percent of the business. Be careful. Being overly dependent on one or two reps could bring a quick downslide to your sales if something unforeseen were to happen to them. The percentage of what they should be bringing in will vary, depending on whether you are in a small or major market. But let's say you have eight people on staff. Here is a thumbnail sketch of where percentages should line up for your station to remain productive. You don't want to be overloaded on the top end or the bottom end.
(with Rep No. 1 being the top rep, and Rep No. 8 being new and in training):
Rep No. 1 25%
Rep No. 2 20%
Rep No. 3
Rep No. 4 - Nos. 3, 4, 5 should divide 35%.
Rep No. 5
Rep No. 6
Rep No. 7 - Nos. 6, 7, 8 should divide the remaining 15%.
Rep No. 8
With this model, proper balance is self-contained in the numbers. When these percentages get out of proportion, you might want to take a look at balancing your staff.
3) Beyond the money. According to Harvard Business School research, 25 percent of good people leave organizations every year because of lack of recognition. Just because you're paying Sally top dollar, doesn't mean she is happy and will follow you through a brick wall. If your biggest challenge is keeping your top reps happy, then you should pay as much attention to how you reward them as you do to how much you pay them. Do you have a Sales Rep of the Month in place, plaques on the wall showing their accomplishments; monthly memos, recognizing their performance and being something to take home to their family and make them feel a part of the team? Do you have annual sales rewards and banquets with family members in attendance?
It's hard enough to get these superstars, but it's even harder to replace them. And the cost of replacing them far exceeds the investment in keeping them happy. Sometimes the little things mean everything.