Shane Decker: Commissions That Work

EVER SEEN AN adult act like a child? If not, try installing commission-based compensation without guidelines. You’ll have your staff crying “It’s not fair!” in no time

Research tells us that stores that pay commission make more sales. But how can you gain the sales while avoiding the headaches?

Instate the following set of rules. Require each staff member to sign off on them, and enforce them vigorously.

Given the chance, you’ll find your staff will become more productive and your customers will be even happier.

Rule 1: If you have a sales floor manager, his job is to help sales associates to close sales, not to compete with the associates. Your salespeople should feel comfortable calling him in when they need help closing a sale. Put the salesperson’s name on the ticket for purposes of commission, and compensate your sales floor manager based on overall productivity of the sales team.

Rule 2: Whoever waits on the client and closes the sale gets the commission. (For the only exception to this rule, see Rule 3.)

I sometimes hear salespeople say, “That’s my client.” I always reply, “Oh, is that person’s name stamped on your forehead?”

Rule 3: If a client walks in and asks for a particular salesperson who has helped him before, but the salesperson is out of the store, put that salesperson’s name on the ticket once the sale is closed (no matter who waits on the client). This is not a split. Yes, you helped out your teammate this time, but they’ll help you out next time. It all evens out in the end, and it encourages teamwork.

Rule 4: If it is a team sale, the sale is a split.

Rule 5: If it is a T.O. — that is, one salesperson needed to get out of the sales presentation because he didn’t match personalities with the customer — it’s a split.

Rule 6: If a salesperson is out of the store, and a client that he’s waited on before does not ask for him when she comes in, the salesperson that waits on her and closes the sale gets the commission.

Rule 7: If a client comes in and doesn’t ask for a salesperson, but he thinks she should have, he should not “make himself available” or do a walk-by to be seen. That’s unprofessional and could kill the sale. If, when the sale is complete, the salesperson wants to walk over and say his pleasantries, he can, but only once the sale is finished.

Rule 8: If two sales associates argue over a client, that sale goes to the house.

Rule 9: Do not split hairs. Do not rewrite the rules and make it difficult. If you’re fair and honest, everybody will win.

I sometimes hear salespeople say, “That’s my client.” I always reply, “Oh, is that person’s name stamped on your forehead?”

The fact is, if a salesperson leaves his place of employment, only about 4 percent of his clientele, on average, will follow; 96 percent remain loyal to the store. Salespeople don’t own clients. Clients can own salespeople, but not the other way around.

The better the leadership in your store, and the better your salespeople follow these commission rules, the better the teamwork will be on the floor.

This story is from the March 2010 edition of INSTORE.