A Billboard Insider reader asks, “My company is installing our very first digital. We are total neophytes in this industry. I’d like to gain some input on typical commission structures. Can you give some guidance?”
Out of home sales expert Kevin Gephart says pay an 8-10% premium on base commission with a 5% bump for long term contracts.
This question was posed by an OOH company who is just getting into selling digital OOH: “How should I compensate my reps for selling DOOH?”
Because this is a new concept for your company, you will need to investment spend to create demand for the product. As demand ramps up, you can adjust your compensation accordingly. Many OOH companies are concerned with the cost of sale, and I argue, the cost of “no sale” is much greater.
Initially you should pay an 8 to 10% premium on your base commission, and another 5% bump for contracts that run longer than six months. OOH companies who have been selling digital for some time report DOOH contracts are for much smaller durations than static. If an advertiser wants static units for longer terms, why buy DOOH for longer terms?
Reps are sometimes too accepting of a short-term digital contract. The creative certainly needs to be short term, topical, and relevant but the contract for space needs to be long-term.
Reps can use the “feel/felt/found” approach with the advertiser/prospect who wants a short term DOOH contract. “I understand how you feel, other advertisers have felt that way, but found they wanted the DOOH sales boost long term.”
If your company policy allows, sell a long-term contract with a cancellation clause of potentially 60 days. You’ll ease the advertiser’s mind. Often, they don’t exercise the cancellation. If they do cancel, you have 60 days to resell them and bring fresh ideas to keep the business.
If your company is in need of DOOH sales training and insights including my “Three Thirds DOOH Sales Management Rule”, reach out to me at KevinJGephart@gmail.com
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What does he mean by an “8 to 10% premium on “base commission”. How much is the “base commission”?
It was an edit issue. We corrected to be consistent with Kevin’s statement later in the article.
I have found it difficult to “adjust” commissions especially lowering them as sales ramp up. Most AE’s don’t accept that well. Maybe a better strategy is to implement a contest or pay a bonus.
Also training your AE’s out of the gate to focus on long term contracts can greatly reduce short term business. This has worked well for us as 85%+digital contracts are 13 period… annual. We’ve been known to walk from 1-2 period deals. Generally not a successful campaign for that short of a duration.