Several Billboard Insider readers disagreed with our post last week suggesting commissions should be based on collections.  An out of home founder says this:

“Commissions should be paid upon billing, and not time of sale or at collection.  A good comp plan provides instant gratification.  When an AE sells last minute deal, they should feel the win instantly, and not wait 60 days.  A good January should be rewarded in January.  In our personal lives expenses can come quick, so a sale today can make those surprises easier.

To keep bad debt down we claw back the paid commission after 120 days. AE’s know that if the account goes bad it’s not likely to write again so they have Incentive to stay on top of it.

We do focus on collection.  Any AE carrying over $xx in 90+ day money is required to sit through an entire collection meeting early in the morning once a week, and they need to be prepared for the meeting.  At this meeting we talk about specific collection best practices and discuss with great detail each problem account and what was/is happening to collect.  Just like ad sales skills, good collection tactics can be learned and improved.  So this weekly collection meeting is both a punishment and a learning opportunity.”

Another out of home company owner says:

With reasonable protocols in place to make sure customers are credit worthy, paying a salesperson based on the total contract value (TCV) turned in each month is an excellent way to incent motivated salespersons. I agree that emphasis should be given to generating quality sales contracts. And agree that a salesperson should “keep what he or she kills”. In select cases, the use of a personal guarantee will be all that is needed …… after all if the customer intends to pay invoices in a timely manner, there is likely no push back with signing the guarantee. Obviously, agency contracts and other contracts with select customers need not sign a personal guarantee. As a top performing sales representative, would you prefer to be paid a commission on the whole contract in the month signed or be paid a fraction of the contract each month?

[wpforms id=”9787″]

Paid Advertisement