I receive questions weekly about how to best compensate staff responsible for selling the tiered investment schedule. Well-trained and fairly compensated staff can be a tremendous asset in successfully transitioning to the tiered (benefits based) investment schedule. The tiered model of membership investment provides salespeople with the opportunity to earn a very competitive salary. Salespeople are not only selling memberships, but a total package of sponsorships, advertising, and participation (admission) fees. The challenge for the chamber of commerce or association is to ensure that the compensation be attractive and fair to the salesperson, and generate the appropriate and necessary revenue for the organization.
I have always been a proponent of commission-based sales compensation. Some organizations provide salary plus commission, while others are based solely on straight commissions. It only makes sense that if you offer salary and benefits, that the commission rate be lower, yet attractive enough to motivate sales efforts. Salespeople that are paid on straight commission deserve higher commission rates that encourage sales efforts that allow for competitive compensation.
Some organizations allow all employees the opportunity to sell the tiered schedule and receive a small commission for their efforts. However, not all employees are able to participate fully because of their specific job responsibilities. Those staffers may not feel that it is fair for other employees to be able to receive additional compensation for something they are not able to completely participate in. For that reason, some organizations offer a year-end bonus for all employees if annual sales goals are met by the chamber or association.
There is no standard answer as to what the commission scale should be simply because of the diversity of benefits and value and the investment prices offered in the various tiers by organizations throughout the country. You must first crunch the numbers in order to determine how much net revenue must be generated through each membership tier in order to determine what percentage of the sale can be provided to the salesperson. Those numbers include:
- Current salary and benefits of your salespeople
- The benefits and value offered in each of the tiers of investment
o Sponsorship dollars (or credits) provided
o Advertising dollars (or credits) provided
o Participation / Admission dollars (or credits) provided
o Other costs to the organization associated with each tier of investment
- Additional Plaques that may be required for the higher tiers
- Special Signage / Recognition that may be offered
By following a well-designed process, the organization will be able to develop a compensation schedule that will provide a win–win for all involved. Let us know how we can help.