Here's how four high-end remodelers have solved the sales commission problem.
Nothing But Sales Rockland Builders, Newport, Del.: Salespeople receive biweekly paychecks on a draw against a 5% commission based on the estimated gross profit of each project sold. If they exceed their volume goal for the year, the commission goes up incrementally with no cap. Incremental bonuses for exceeding volume goals are paid quarterly.
A day in the life: Salespeople don't perform other functions. Their commissions aren't affected if the profit of the job is lower than estimated; the estimating/production teams are responsible for accurate cost structures.
President David Heaney: “It's difficult to wear more than one hat and do it well. If I have a salesman who does three things, he'll do what he likes first and then slack off on the other parts.”
Designer Sales Benvenuti & Stein, Evanston, Ill.: Salespeople are 100% salaried, earning $75,000 to $100,000 annually.
A day in the life: Salespeople are licensed design professionals who produce design documentation after firm principals have determined the project's viability in an initial sales call.
Vice President Ben White: “It's natural for design professionals to sell. They're emotionally involved in the project. The person doing the documentation understands the process and project and can give good answers to the client.”
Sales Trinity Classic Remodeling and Construction, Charleston, S.C.: One sales staffer plus the owner sell. The salesman is paid half his compensation weekly as straight salary. The other half is commission based on projected gross profits, customer service, and quality. He receives 50% of the commission when the deposit check comes from the customer and 50% when the job is done.
A day in the life: The salesman sells and manages his jobs as well as other aspects of the company.
Sales/project consultant Marty Kersy: “One nice thing about our system for owners is that if the project doesn't meet gross-profit expectations, there's a financial buffer between the first commission draw and the final draw.”
Sales Plus Morris-Day, Arlington, Va.: One full-time marketing/sales staffer who is 100% commission. She receives a monthly draw against a 1% commission on the price of the design services contract.
A day in the life: The staffer is responsible for working with clients from initial deposit through one-year warranty, as well as public relations and marketing functions.
Saleswoman Linda Kostovich: “My salary is based on the contract. Sometimes the price goes up on the house, but, frankly, it's not worth quibbling about, because in this market some work is simply dropped in your lap.”
Cati O'Keefe is a freelance writer based in Cincinnati.