Why you need a telesales commission scheme
Having a commission scheme for your telesales or telemarketing team is an important element of managing them effectively. You reward those who do the best job the most, and it helps the team self-manage.
What you want is for your team to be successful. They make you more money.
Not commission only, but a good element of commission. You also want the successful ones to earn more and equally importantly be seen to earn more than those members of your team who aren’t so skilled or who don’t put in the same amount of effort.
Certainly I advise clients that a commission scheme should be a constant, and relate to what they sell or appointments they book. They need to be able to work out what they will earn from a sale. If they can’t, it doesn’t really motivate them. Knowing that they’ll earn say £80 for getting this order in, will motivate them as they’ll inevitably be thinking about what they are going to spend it on! An easy to understand scheme such as a percentage of initial order value, or a fixed amount of X for sales of product range A, or an amount of Y for sales of B – that sort of thing.
Then you can also run bonuses or short-term campaigns on top of this to encourage them to focus on short-term business goals. You may have a product that you want to clear out of stock. So a lump sum payment for each unit shifted is a good way of doing this. This type of bonus scheme runs separately to the commission scheme as it may mirror short-term business objectives whereas the commission scheme mentioned above is a constant (as already detailed) until it gets changed in a couple of years.
Having a good commission and bonus structure will do much of your internal selling for you. For instance the high performers will almost certainly let slip how much they’re earning in commission – or what they’re going to spend it on. And often a good scheme weeds out the underperformers. They realise that they’re earning well below what they ought to, and so they leave. Problem solved in most instances!
Never pay bonuses on activity though
All of us involved in the management and motivation of telesales and telemarketing teams know that we measure, monitor, and motivate across a number of different KPIs. You (hopefully) monitor the inputs such as number of dials completed and number of decision-makers spoken to (Contacts or DMPs – Decision Maker Presentations) and then at the end of the process you measure the number of sales or appointments they set. Good!
You can target them or measure them and even record in graphical form any of these measures, but don’t ever pay them based on inputs. Number of calls / dials made or DMPs. In actual fact the only reason you even monitor these is that you understand that more activity leads to a greater opportunity for success. And so it does. But if you pay good money for it, you end up chasing the wrong thing. They’ll do activity for it’s own sake and they’re less likely to worry about the outcome of their calls.
Overall then, we are strong advocates of commission schemes for the development of outbound telemarketing or telesales team. They encourage the best performers, discourage the weaker members of your flock meaning that they’re more likely to leave if they’re not earning what their peers are and these elements of self-management make your job as telesales manager, team leader or supervisor easier.
We can help
So, if you’d like to set up a commission scheme for your team for the first time we can help you put this together. Alternatively, you may already have a scheme and perhaps you would like to review it in the light of team performance. Again this is something we can help with.
Contact us at firstname.lastname@example.org or alternatively call us direct on 01858 461148 to outline what you’re hoping to achieve.