How do you compensate your salespeople? "Sales is traditionally a commission-based position," says Andrew Wells, vice president and general manager of Normandy Builders, just outside of Chicago. "The more you sell, the more you make."
Not all full-line remodeling and design/build salespeople are comfortable with traditional compensation, however, no doubt due to their background, which often is in construction, not sales. Franko-LaFratta Construction's base-salary-plus-commission pay structure met with mixed reviews, according to Mark Franko, CEO of the Richmond, Va., remodeling company. "Some people want the security of the paycheck," he says, "while others want the possibility of the upside." The company is currently working on a program that would allow individual salespeople to choose how they are compensated.
Andrew Shore, of Sea Pointe Construction, in Irvine, Calif., thought that straight commission would be enough of a carrot for his salespeople. But he has found otherwise. "If you pay them based on the total sale, they don't have much interest in whether it's profitable," he says. To combat that complacency, Shore now pays his salespeople 25% of the gross profit on every job they sell. This keeps salespeople involved throughout the project, making referrals -- which go to the salesperson who generated them -- more likely.
Orren Pickell Designers & Builders, in Lincolnshire, Ill., is ready to roll out a new compensation program for the company's 16 salespeople. According to vice president of sales and marketing Todd Wilkins, the company will survey its clients throughout the project, and the salesperson's commission will be partly based on customer satisfaction. "Our salespeople know they can make commissions because of our brand," Wilkins says. "This is their commitment back to the brand."