If you’re unsure of the best way to pay your sales team, then you’re in for a treat…
Because in this week’s newsletter, you’ll discover many ways to structure your team’s commissions…
You’ll also discover what I believe are the best ways to compensate them…
I’ll give you a sneak peek into how I pay my closers and why I’ve chosen this method…
And you’ll also get my simple but powerful method for removing complacency and keeping your closers on their toes.
Let’s get started…
3 Goals Of Your Commission Structure
When structuring commissions for your team, you should have 3 goals in mind.
- Increase closer motivation…
- Boost sales and productivity…
- Reduce staff turnover…
With those in mind, let’s dive into some common commission structures.
3 Of The Most Common Commission Structures
Believe it or not, there are at least 10 different ways you could structure your team’s commissions.
But today, we’ll cover just 3 and I’ll give you a link so you can gain insight into the other 7.
- 100% Commission
This is beneficial for both the company and the closer.
Why?
Because the company doesn’t pay the closer a salary, they can offer a higher commission rate.
The closer will feel like they are in complete control of their income.
There is no limit to how much the closer can make.
This is a great way for the closer to gauge their performance.
But, one of the biggest problems with this model is it can cause neediness and/or desperation, as they only “eat what they kill”.
Furthermore, closers could resort to unethical sales techniques in order to make sales in the event of a quiet sales period.
Another problem with this model is it can cause a high turnover rate, if closers don’t perform or are unhappy with their income.
- Base Salary + Commission
Here you’ll provide an hourly rate or monthly income and you’ll also pay your closers for each sale they make.
You’re invested in the closer, and you both carry certain levels of responsibility.
The base should not be so high that the closer can get complacent and lazy…
But it also shouldn’t be so low that if they run into challenges they can’t survive without making sales.
This model still rewards high performance, and as you control the number of hours the closer works, you can still predict fixed salary expenses.
Any extra outlay is of course connected to sales made.
- Tiered Commission
If you want a good way to motivate your team to close more sales, a tiered commission structure may work well for you.
With this type of structure, your closers will earn a higher commission when they hit certain milestones.
For example: If they close anything under $20,000 they may get 5%.
Anything over $20,000 but under $50,000 may see them receive 8%, and so on.
It’s up to you how far you want the tiered commission to continue and what percentage you award them each time they hit a new tier.
This helps motivate them to continue closing sales even after they’ve hit their monthly targets, as they’ll receive greater compensation.
Click here to discover 7 other commission structures you could potentially install into your business >>
How I Pay My Sales Team
In our business, we use a combination of a few different commission structures.
Regardless of experience, every new closer starts as an appointment setter.
They earn a percentage (dependent on the price point and margin of the offer) of sales for appointments they set.
After they’ve proven themselves by getting a predetermined number of sales, they then move to a closing position.
In this position, they get a base plus commissions, and we also work out a bonus structure similar to the tiered commission structure.
As I mentioned earlier, providing your closers with a base removes neediness and desperation.
The last thing I want in my team is a closer who is in survival mode…
As this causes most people to act irrationally and emotionally in a sales conversation.
How To Keep Your Closers On Their Toes
One huge challenge you’ll face no matter how well your sales team performs is people becoming complacent.
It’s very common for people to get too comfortable and even lazy at times.
So, in order to get around this, and to ensure you always have the highest performers on your team, here’s what I do.
Every quarter, I cut the bottom performers.
It’s up to you how many or what percentage of people you cut each time, but if you have 4 or 5 people on your team, you may like to cut the bottom person.
I think 20-25% is a good portion to cut, depending on the size of your team.
How to Turn Your Sales Team Into A Force To Be Reckoned With
If you want your team to perform to the best of their ability, you have two choices, [Name].
Either you can assume they’ll train themselves and upgrade their skills on their own dime…
OR
You can get on the front foot and provide them high-level training vital to their success.
Now, I’m in a unique position where my team has access to the hundreds of hours of sales training I’ve created.
In fact, in order to get a position on my team, each closer must have taken my High Ticket Closer Certification™.
This proves to me they’re serious and they understand my sales methodologies.
But if you’re not at the level where you’ve created sales training, or perhaps you’d like to bring in some outside training…
Then I invite you to check out the Dan Lok Closing Collection >>
This collection compiles 6 of my most effective sales trainings, including:
How To Sell High Ticket Consulting Programs And Services… The Perfect Closing Script… Objection Handling Secrets… Persuasion Secrets… Prospecting Secrets… and Negotiation Secrets.
By the time your team has been through these programs, their closing skills will be like night and day from where they are now.
And the best part, each program works out to roughly $66 each.
In my opinion, it’s a complete steal for the potential value you could receive if your team implements the teachings.
And if perhaps the collection is outside your budget, there are other trainings you can invest in individually if you wish.
Here’s the link to check out the rest of my sales trainings >>
To your success,
Dan Lok
P.S. – If you want your sales team to have complete confidence when speaking with prospects…
One of the best ways to achieve this is by having an irresistible high ticket offer.
