Thank you to all OOH owners/managers who contributed their collective wisdom to our compensation survey. It was one of the biggest response rates Billboard Insider received from any survey.
Feedback I received is that the survey is far too short and doesn’t dive deep enough into compensation challenges. That is absolutely true, but Billboard Insider knows from experience if you have a more detailed survey, response rates drop significantly. We tried to ask the most critical questions and keep it brief.
Here are the results of the survey.
Most companies pay salary plus commission.
I am encouraged to see a fair amount of OOH companies are legitimizing their sales compensation structure by paying some salary. A small percentage of salespeople are motivated by and find a straight commission plan to be acceptable. Organizations need to grow their sales force beyond that small group. Full commission compensation can be permission to NOT sell. Not many industries succeed on purely performance-based compensation.
It is critical salaries be tied to focused, meaningful, non-negotiable activity standards. Those activity standards for sales reps must be monitored in a quality CRM system.
Most companies commission on total revenue.
82% of out of home companies commission based on total revenue as opposed to revenue above a base.
Most companies pay a commission of 10% or less
It isn’t surprising that 80% of the companies pay a 10% or less commission rate. I’m assuming the 20% response of companies paying higher than 10% commission represents newer OOH media that has to be developed from local business decision makers and has little “demand” business.
Most companies commission on collections
As a sales rep I always preferred to be paid based on collections not sales. Many companies will charge back the commission to the rep for any uncollectible advertiser balances. I felt confident knowing the money that went in my bank account stayed there. In some instances, reps, facing extremely large chargebacks for uncollectable advertiser balances, resigned from the company rather than pay back a large commission amount.
Most companies pay the same commissions for inbound vs outbound sales.
With so much focus on cost of sale, it’s amazes me nearly half of out of home companies compensate for inbound sales at the same rate as outbound sales efforts. If companies are rewarding the same commission for inbound sales-RFPS, call-ins (vs outbound-rep generated new business), they are likely not maximizing the cost of sale investment. You’re rewarding a sale on business you would likely get anyway.
Consider making the in-bound sales rep role a higher-level clerical position. Maybe assign the job to a sales rep who does not have the aptitude for direct new/local business development. You’re saving your sales team fire power for self-generated new/direct business.
Many companies don’t realign their sales rep comp very often, feeling that will create turnover. As a former sales rep, I despised new commission plans because they were often meant to disguise a commission cut. There are legitimate reasons to adjust compensation, the biggest being realignment of the company priorities. Be transparent, honest, and upfront with your reps. Proactive OOH companies should adjust their sales compensation at least every two years.
Take time to carefully plan how to introduce compensation changes to your reps. Create a superior compensation plan by collaborating with the sales team. Outline the changing company priorities and ask for their feedback. Then when you launch the new plan, it will not seem like a surprise attack.
Keep the plan simple. I have seen too many rep comp plans so complicated, few people in the organization understand them. If the compensation plan you want is vastly different from the current, make those adjustments very slowly, potentially, one year at a time.
Billboard Insider and I would welcome your comments/observations about the results of the survey. Email davewestburg@billboardinsider.com. Thanks again for participating! Learn about me at: OOHSalesFaster.co
To receive a free morning newsletter with each day’s Billboard insider articles email info@billboardinsider.com with the word “Subscribe” in the title. Our newsletter is free and we don’t sell our subscriber list.
Paid Advertisement
