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  1. #1

    Hosting company owners - how do you compensate your salespeople?

    trying to figure out a fair commission plan for salespeople for a hosting company

    trying to incentivize them to bring in new hosting business, upsells and bandwidth

    could pay a straight percentage, but the problem there is if they are making good $ off of their residials, they may not want to persue new business

    wanted to get some ideas from people with experience

  2. #2
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    A straight percentage would make more sense, also I don't think it will contradict with not pursuing other new business since it will add their monthly income by pursuing new businesses.
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  3. #3
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    Why not have a target number of sales, ie they must make 5 sales per month to recieve there salery - this means they'll get a fixed amount, plus they have to perform the sales.
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  4. #4
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    We pay our employees that work in sales a hourly rate + commission. The commission is the same as our affiliate program. You may say they are just affiliates but they earn a hourly salary plus a bonus (commission). Hope that helps.

  5. #5
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    Quote Originally Posted by edmond dantes View Post
    trying to figure out a fair commission plan for salespeople for a hosting company
    If you want to pay by commission, consider an affiliate program. Services like Commission Junction give you access to lots of potential affiliates which can try to sell your services on their websites, assuming your rates are attractive.

    Most arrangements that I've seen (where sales are actually happening!) usually involve paying about 10-12 months of revenue to the affiliate. If you're charging $10/month for a hosting plan, then you might expect it to cost you about $100 to acquire a customer.

    If you want to have sales staff that report directly to you, you'll need to pay a salary. The people that can actually close a sale won't be interested in a commission-only arrangement.
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  6. #6
    good advice, im trying to figure out a % decline rate (i want them to be paid more upfront and encourage new business) and because i want the sales guys to manage each account, got to see if there is a different rate i pay to manage an account vs. sell an account

    thanks for the advice so far guys

  7. #7
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    I dont have any full time sales people but on a part time scale I payout 25% of new signups and 15% on renewals. From the feedback I've got from them they seem to think its fair compensation. This allows the incentive for new signups and puts some cash in their pocket when customers resign.
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  8. #8
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    We give them an extra slice of bread and extra 30minutes outside the cage in the basement, for every sale. This motivates them very well.
    I like BBQ. I also do hosting, dedicated servers, and PR work.

  9. #9
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    Quote Originally Posted by JonCat View Post
    We give them an extra slice of bread and extra 30minutes outside the cage in the basement, for every sale. This motivates them very well.
    That sounds great and cost effective too.

  10. #10
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    our sales staff is commission based with a bonus cap. so if they sales X number they will bonus.

  11. #11
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    Quote Originally Posted by bqinternet View Post
    The people that can actually close a sale won't be interested in a commission-only arrangement.
    Agreed. A good salesperson wants to work for a company who is willing to invest in them in the form of a salary. Commission may be a nice bonus, but the base salary must still be present and needs to meet industry salary norms.

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  12. #12
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    Giving fixed salary to sales people and incentives for new business generated from new customers is the best option. I have experienced, sales people also claiming for incentives for the renewal sales or new sales from the old customers who stay with the hosting company only because of the good support and for which the technical team does not get any form of benefits.
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  13. #13
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    3 month forgiveable draw, during this period.

    if on average say they made 15% off the gross 5% straight payout, the remaining 10% goes towards their draw.

    MRC commision paid out on first contract duration, renewals are dropped to 5%

    pretty simple. If a sales guy cannot cover his own salary with in 3 months you need to considar other options.

    I'm not a believer in commision caps. Who wants to keep working when they cap out?
    Last edited by Spudstr; 10-04-2009 at 11:36 AM.

  14. #14
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    Quote Originally Posted by Spudstr View Post
    I'm not a believer in commision caps. Who wants to keep working when they cap out?
    I definitely agree with you there. Commission caps do not seem to be a great idea in practice.

    -mike
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  15. #15
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    A good base salary is definitely important, but adding a bit of commission is a nice bonus for the good salespeople

  16. #16
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    Quote Originally Posted by matthall28 View Post
    A good base salary is definitely important, but adding a bit of commission is a nice bonus for the good salespeople
    Good base salary is nothing more than a pincushion for people to bounce off of and not produce.

    This is a business not a good ol'boy group.

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