An out of home executive agrees with our post suggesting that out of home sales commissions should be paid on collections and not on billings:

“Paying based upon sales and not collections is a slippery slope. As you noted, when you are negotiating with a potential client, collecting or their ability to pay for the advertising is a key part of the sales process. Salespeople paid only on sales, without a solid credit procedure in place, can lead to a high percentage, or higher percentage, of write-offs and bad debt. We have done this with call ins or accounts that prepay as a hybrid but the percentages are less and are based on the sale itself. (i.e. – 100% for rate card sale, 75% for a sale at 75%-90%, etc.) This is just an example but you get the idea and I would never have all of my sales staff under a program like this. And, as you alluded to, people in this role are not very engaged in the process once the sale has closed. So, if you have staff to handle that portion of the sale and can let the salesperson continue to “eat what they kill”, it can work but managing that team becomes more important.”

What do you think.  Email davewestburg@billboardinsider.com or use the form below.

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