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What is the difference between commission and bonus ?

By andrew on December 8, 2009

What is the difference between commission and bonus ? This is a question we’re asked frequently by clients. Not only what is the difference, but equally importantly, “do we need both of them ?” and “how can we use them both to motivate our team in different ways ?”

Get your commission and bonus schemes right and this is what should happen to sales

Get your commission and bonus schemes right and this is what should happen to sales

Indeed we think commission, bonus and campaign incentives all have a place in how you reward your telesales or telemarketing team. It is worth spending some time thinking these elements through too, because if you get it right you can motivate your telephone team to produce better results, increased sales, more appointments, higher numbers of quotations etc. You don’t mind paying more if you get more do you ? However you don’t want to pay more for the same or less !

Commission should be a regular payment for doing the telesales or telemarketing job well. It should be a constant, and the best performers in your team should earn the most. In addition it must be easy (for them) to work out at the point of getting the order. After all if it isn’t, it can’t motivate them can it ?! So a percentage of order value is a common version of this.

“My commission rate rewards me at 2% of order value.” “Great so if I can get this deal for £500 this morning, that means that will be £10 in my sky rocket (or pocket – for those of you not familiar with cockney ryhming slang !)

Bonus however is for what you reward individual members of your team with on top of their core job. So if you sell any of the platinum service plan we give you £50. You can tailor this then to sales of your more profitable products or services, or end of line stock that you want to clear etc. Alternatively it could be for achievement of quarterly target. Bonuses then should be for specific (relatively) short run campaigns or business objectives. This allows you to direct the guns in a particular direction until the objective has been achieved, or time has passed.

Then on top of commission and bonus there are incentives and for a phone team these are the fun bit. Very short term and with a high profile to add some energy and dynamism to a team’s activity and performance in the short term. But this is perhaps a subject for another day. In the meantime, there is a slightly more indepth article at ezine articles. Follow the link here http://ezinearticles.com/?Should-I-Pay-Commission,-Bonus-Or-Run-Campaigns-For-My-Telesales-Or-Telemarketing-Team?&id=2088836


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