I'm considering filling a position for a salesman. I envision the person meeting with customers, job site measurements, helping the customers with various selections etc. After putting together the information I'll take it and design the job for output to the shop. In this scenario would you have this as a commission or base plus commission?
From your description of duties, I don't see many typical sales responsibilities on the list. Think about a few of the following questions?
How many hours would it save you per prospect to have someone else meet with customers, do job site measurements, help customers through various selections etc.?
Do you expect this person to do a design and present it to the customer?
Do you expect this person to price the design and close the sale?
Do you expect this person to do prospecting work or other duties beyond working with customers?
You could have anyone who understands cabinet layout do site measurements and pay them a fee for their time.
If your customer happens to go into a big box store with photos and/or dimensions of their spaces, the "designers" at the big box can do a complete design with full pricing and spit our a contract for a customer to sign within about 30 minutes. Is that where you want your sales person to be?
I'd guess an average big box "designer" would earn in the $25K-$50K per year. Top performers may earn double that amount. What can you afford to pay someone who would take a customer through design to contracting the job?
I guess I left out the main point. This position would require getting new work. Calling on new builders and in the case of walk ins, taking their project from that point to the point of handing me a file I can input to our CNC software. I'm not sure about estimating but this is something I would rather have as a responsibility of the new "Sales" position also. I would work with the sales person throughout the project but only as needed. A brief meeting each morning or every couple days to coordinate the schedule or any other questions that may need communication. Does this sound more like typical sales responsibilities?
In my opinion, sales without including pricing is customer service and customer service is compensated differently than sales. How can you expect someone to make a sale if they don't know what the items will cost? If it isn't the number 1 concern of a prospect or customer, it certainly is in the top 3.
You'll need to figure out a system to get pricing back to the prospect within minutes or hours, not within days or weeks if you want your sales person to succeed. What if your salesperson brings you 10 new jobs to estimate in a typical week? How long would it take you to estimate them and get pricing back to your salesperson and potential customer? Get your estimating part figured out and automated so that when your salesperson draws up a design, they can have instantaneous or very quick pricing information available to share with a customer. You will need to do at least some modest delegation of estimating duties to your salesperson.
I go back to how many hours do you expect to take off your plate each week if someone else handles the responsibilities you have listed? What are those hours worth to you if you no longer had to handle those duties? You should be willing to pay up to that amount each week to no longer have those responsibilities. Secondly, how many hours do you expect your salesperson will spend doing thing like prospecting that is currently not being done routinely each week? There should be a figure you can make workable for those additional duties. Thirdly, what if your salesperson is very successful and doubles the number of jobs you'll need to run through your shop each week or month? Can you double your production? What is the cost impact on doubling your production? What additional gross profit would be available as a result? A portion of that gross profit should be what you'd be willing to pay your sales person.
I really see this as a base plus commission position, with a sliding commission schedule based on increased sales over your current volume.
I have re-read them a few times breaking each part down. Which is what I suggest to you. This way you can put values against them and determine.
We just hired an Estimator. Believe we were very lucky in only having to go through 3 individuals before finding the right fit.
I say 'Lucky' but really, we knew what we we're willing to pay and what we expected of the individual.
Sales compensation is a tricky thing. I've been a total failure in covering all the bases. From what I've learned: they will want commission on all work you do, meaning current customers too. If they land a job that is way bigger than what you can do they want their cut on it, even if they were told the limits to start with. They will offer discounts to "get their foot in the door." They will want you to pay for "perks" so they can sell more to a given customer. Freebies in the job, a GC's favorite booze, or a free trip. If they land a good customer that fills your schedule they won't go looking for new work, because you can't do any more, and they are happy with their commission stream. You, of course have all your eggs in one basket. All these things make perfect sense if you are in sales. You just need to cover all of them (& more) in writing, before you hire.
Larry, We have a very simple system.
You bring in a client, he's yours. You sell to someone else's, you split the commission.
Depending on hire conditions , the Sale expenses may be on the Sales person.
Hired as Commission only or hourly plus.
Commission only, they own the expenses.
Then comes going beyond the parameters Sales. On their dime, sorry but you knew the rules. On our dime, they're going to get an ear full!
I just sold a 1.2m project. That is twice what we find our Profit market to be.
I did it on 'my' time, ran the numbers and set it up.
When I proposed it to the Owner, he saw what I did. It's a Profit job!
If your Salespeople are not willing to take the risk to get you 'Good' work. Then you need new Salespeople.
FORUM GUIDELINES: Please review the guidelines below before posting at WOODWEB's Interactive Message Boards(return to top)
WOODWEB is a professional industrial woodworking site. Hobbyist and homeowner woodworking questions are inappropriate.
Messages should be kept reasonably short and on topic, relating to the focus of the forum. Responses should relate to the original question.
A valid email return address must be included with each message.
Advertising is inappropriate. The only exceptions are the Classified Ads Exchange, Machinery Exchange, Lumber Exchange, and Job Opportunities and Services Exchange. When posting listings in these areas, review the posting instructions carefully.
Subject lines may be edited for length and clarity.
"Cross posting" is not permitted. Choose the best forum for your question, and post your question at one forum only.
Messages requesting private responses will be removed - Forums are designed to provide information and assistance for all of our visitors. Private response requests are appropriate at WOODWEB's Exchanges and Job Opportunities and Services.
Messages that accuse businesses or individuals of alleged negative actions or behavior are inappropriate since WOODWEB is unable to verify or substantiate the claims.
Posts with the intent of soliciting answers to surveys are not appropriate. Contact WOODWEB for more information on initiating a survey.
Excessive forum participation by an individual upsets the balance of a healthy forum atmosphere. Individuals who excessively post responses containing marginal content will be considered repeat forum abusers.
Responses that initiate or support inappropriate and off-topic discussion of general politics detract from the professional woodworking focus of WOODWEB, and will be removed.
Participants are encouraged to use their real name when posting. Intentionally using another persons name is prohibited, and posts of this nature will be removed at WOODWEB's discretion.
Carefully review your message before clicking on the "Send Message" button - you will not be able to revise the message once it has been sent.
You will be notified of responses to the message(s) you posted via email. Be sure to enter your email address correctly.
WOODWEB's forums are a highly regarded resource for professional woodworkers. Messages and responses that are crafted in a professional and civil manner strengthen this resource. Messages that do not reflect a professional tone reduce the value of our forums.
Messages are inappropriate when their content: is deemed libelous in nature or is based on rumor, fails to meet basic standards of decorum, contains blatant advertising or inappropriate emphasis on self promotion (return to top).
Libel: Posts which defame an individual or organization, or employ a tone which can be viewed as malicious in nature. Words, pictures, or cartoons which expose a person or organization to public hatred, shame, disgrace, or ridicule, or induce an ill opinion of a person or organization, are libelous.
Improper Decorum: Posts which are profane, inciting, disrespectful or uncivil in tone, or maliciously worded. This also includes the venting of unsubstantiated opinions. Such messages do little to illuminate a given topic, and often have the opposite effect. Constructive criticism is acceptable (return to top).
Advertising: The purpose of WOODWEB Forums is to provide answers, not an advertising venue. Companies participating in a Forum discussion should provide specific answers to posted questions. WOODWEB suggests that businesses include an appropriately crafted signature in order to identify their company. A well meaning post that seems to be on-topic but contains a product reference may do your business more harm than good in the Forum environment. Forum users may perceive your references to specific products as unsolicited advertising (spam) and consciously avoid your web site or services. A well-crafted signature is an appropriate way to advertise your services that will not offend potential customers. Signatures should be limited to 4-6 lines, and may contain information that identifies the type of business you're in, your URL and email address (return to top).
Repeated Forum Abuse:
Forum participants who repeatedly fail to follow WOODWEB's Forum Guidelines may encounter difficulty when attempting to post messages.
There are often situations when the original message asks for opinions: "What is the best widget for my type of shop?". To a certain extent, the person posting the message is responsible for including specific questions within the message. An open ended question (like the one above) invites responses that may read as sales pitches. WOODWEB suggests that companies responding to such a question provide detailed and substantive replies rather than responses that read as a one-sided product promotion. It has been WOODWEB's experience that substantive responses are held in higher regard by our readers (return to top).
The staff of WOODWEB assume no responsibility for the accuracy, content, or outcome of any posting transmitted at WOODWEB's Message Boards. Participants should undertake the use of machinery, materials and methods discussed at WOODWEB's Message Boards after considerate evaluation, and at their own risk. WOODWEB reserves the right to delete any messages it deems inappropriate. (return to top)
Forum Posting Form Guidelines
The name you enter in this field will be the name that appears with your post or response (return to form).
Personal or business website links must point to the author's website. Inappropriate links will be removed without notice, and at WOODWEB's sole discretion. WOODWEB reserves the right to delete any messages with links it deems inappropriate. (return to form)
Your e-mail address will not be publicly viewable. Forum participants will be able to contact you using a contact link (included with your post) that is substituted for your actual address. You must include a valid email address in this field. (return to form)
Subject may be edited for length and clarity. Subject lines should provide an indication of the content of your post. (return to form)
Thread Related Link and Image Guidelines
Thread Related Links posted at WOODWEB's Forums and Exchanges should point to locations that provide supporting information for the topic being discussed in the current message thread. The purpose of WOODWEB Forums is to provide answers, not to serve as an advertising venue. A Thread Related Link that directs visitors to an area with inappropriate content will be removed. WOODWEB reserves the right to delete any messages with links or images it deems inappropriate. (return to form)
Thread Related File Uploads
Thread Related Files posted at WOODWEB's Forums and Exchanges should provide supporting information for the topic being discussed in the current message thread. Video Files: acceptable video formats are: .MOV .AVI .WMV .MPEG .MPG .FLV .MP4 (Image Upload Tips) If you encounter any difficulty when uploading video files, E-mail WOODWEB for assistance. The purpose of WOODWEB Forums is to provide answers, not to serve as an advertising venue. A Thread Related File that contains inappropriate content will be removed, and uploaded files that are not directly related to the message thread will be removed. WOODWEB reserves the right to delete any messages with links, files, or images it deems inappropriate. (return to form)
The editors, writers, and staff at WOODWEB try to promote safe practices.
What is safe for one woodworker under certain conditions may not be safe
for others in different circumstances. Readers should undertake the use
of materials and methods discussed at WOODWEB after considerate evaluation,
and at their own risk.