Are College Paying Sales Commission? A White Paper by Kathy Yeager

3. Sales staff do tend to maximize every sale they get by selling additional services

4. Being able to attract talent with a proven track record in the private sector. Paying one person who can sell at the $1M level is much more cost effective than hiring additional staff with benefits

5. Recruiting better sales people

6. More enthusiasm around sales; very goal oriented sales professionals

7. No ceiling on earnings

8. More sales

9. Commissions are based on account profitability, so the benefit is to maintain a higher level of profit and no cap on staff salary

11. Sales staff receives a 4% commission on sales. This is monitored and paid quarterly.

12. The sales staff has a base salary of $51,000 and paid 10% on the net margin.

13. Our commission plan has been in place since 1999. The staff receives base salary and a percentage based on the size of the sale. The percentage ranges from 2.5% to 10%.

14. Sales people have assigned goals. Once the group makes the goal, a bonus of 1% is paid to each person. Another flat fee is paid for reaching goals attached to our strategic plan.

16. President – 6

17. Vice President – 4

18. Dean – 2

19. Workforce Director – 2

21. Be clear on the goals of your College Institution for the entire department and for each individual sales person.

22. Be sure the right people are in the sales positions. This means they know how to hunt for sales, and enjoy the process. In addition, they have shown they like to build relationships and can produce results.

23. Prepare a proposal for college upper management showing research, other college models, suggested percent of commission or bonus and forecasted results. (An example of a commission model might be a salesperson with a fixed salary and benefits plus a 3-5% commission on all contracts sold).

24. Be clear that the salesperson generates the added revenue to cover the percent of commission or bonus. The college wins and the salesperson wins. In addition, conduct pre-interviews with the college business office to make sure money goes in and comes out of the “right buckets”.

26. Against state regulations

27. Sales supports the department and the college

28. We have a team approach to sales

29. Policy

30. I don’t know

31. We are not hired as “sales” staff. Building partnerships is part of our job description

32. We don’t want to be structured that way

33. Past practice

34. We don’t have anyone that is strictly sales

35. Our internal structure does not yet have the appropriate supports to ensure their success on commission – i.e. time to process contracts for signature, invoicing issues, etc. However, we continue to revisit this as a potential structure

36. Sales staff is salaried

37. We don’t have the budget to do this and we are based on a team effort not individual

38. We did, but it just changed recently

39. Beginning to explore this possibility

40. No money

41. Receive a bonus at the end of the year if in the black

42. No, we would like this, but there is no mechanism in our district policy that will allow for commission-based compensation. We are exploring this option though.

43. With 90% of the survey respondents indicating they were not paying sales commission or bonus, the message is clear that Institutions either aren’t ready or want to pay this incentive. Some additional reasons given for not paying commission include the following:

44. The college business office finds it difficult to tie the employee’s benefits percentage to a sliding scale or commission rate

45. If the sales person gets paid on commission—then everyone in the office should be paid on commission

46. We have never done it this way before

47. Fear of the sales person making too much money

48. We don’t want to track sales and report numbers

49. It takes awhile for a new salesperson to learn the products and services and get “up to speed” before they start producing

50. Interview of a College Institution being Successful without

51. Paying Sales Commission

52. One of the College Institutions interviewed who doesn’t pay sales commission, shared the following information:

53. Paying sales commission was on the table for discussion for several years. Finally the Director of the Workforce Development Area took it off the table until the department could be restructured to better serve the customer. It has not been put back on the table.

54. This department is working in a strong team environment. The person who makes the sale is only a small part of the operation. There is a solution developer who develops the proposal, and a complete implementation team who does the contracts, gets instructors and starts the classes. Serving their customers is a huge team effort, and it would be difficult to isolate out one person for a sales commission.

55. Since they can’t pay everyone a commission or bonus, they hold celebrations as a team. Periodically they will have a sales contest, and perhaps award a half day off work. Client Services can get the same reward for conducting exemplary customer service. To celebrate the numbers at the end of the year, the Director may take the entire office out to dinner (paid personally by the Director). Sometimes they buy ice cream or pizza to celebrate. They also ring a bell in the office when they land a contract larger than $20,000. All those involved in the transaction are honored.

56. Structuring a sales commission within the academic institution would be difficult. Currently, this department has 2-3 people on the college budget with benefits and who are paid out of soft money, as well as some on contracts. This becomes an issue with the college budget, and would be hard to get it through the system.

57. In addition, this College Institution indicated it was hard to fight for additional money for commission or bonus when the college is having budget cuts and some people are being furloughed.

58. However, here is what’s working in this department. They carefully hire the right people for open positions. The salary is better than normal and they get benefits. They are given clear expectations, goals and held accountable as they receive their first 90-day contract to see what they can do. After 90 days the goals are monitored, and a decision is made to either give another 90-day contract or to release the employee. After one year, the employee goes to yearly contracts. Employees are mentored and have may have frequent performance improvement sessions.

59. This model has worked for this College Institution. They set a goal of $2M in sales last year, and met their goal. The restructuring has helped to get everyone in the office circling around the client. The Director said, “You can make a lot of sales, but if you don’t have the rest of it (fulfillment and implementation), you won’t get another one.”

60. It is all about hiring the right people, and giving them clear expectations while holding them accountable. It is about celebrating the successes and mentoring for performance improvement.

62. Is the Institution mandated by state policy not to pay a commission?

63. Is the upper management of the Institution entrepreneurial?

64. Can the Institution’s Business Office understand and handle the accounting of the commission or bonus?

65. Are the right sales people in the sales positions? Do they like to sell?

66. Is the sales staff currently being held accountable?

67. Is the Institution attempting to “run it like a business”?Only the College Institution can answer these questions.<br />The goal of this White Paper was to determine if College Institutions were paying sales commission or bonus. By surveying multiple colleges and universities nationwide and gathering strategic data regarding payment of commission, college representatives can now make a more informed decision either to pay commission or not to pay commission. Thank you for reading this White Paper. Your questions and feedback are welcome.<br />I hope you enjoyed the White Paper. Contact me at kyeager@ctedge.net for a complimentary one-hour coaching session on how to improve your sales team skills, reaching your sales goals, or improving close rates. <br /> Kathy Yeager<br />Kathy Yeager is President of Contract Training Edge, LLC, a consulting firm specializing in college and university workforce development and corporate training, solution selling, sales coaching, DiSC Sales Assessment, advanced sales techniques and consulting.<br />Kathy brings over 35 years of experience in marketing and selling contract training to business and industry to your organization. She specializes in “how to” techniques for prospecting, effective sales calls, solution selling, proposals, closing, contracts, fulfillment, follow up and more. Her unique presentation style and humor helps to give your employees the edge they need to achieve a higher level of effectiveness in selling contract training.<br />Her experience in adult education came from 34 years at Johnson County Community College in Overland Park, Kansas. Having worked both in credit and continuing education in the Center for Business and Technology and the Business and Technology Division, Kathy is a contract training professional with experience in all areas of marketing, selling training and consulting to businesses. She understands how to make proactive sales calls with targeted, qualified businesses resulting in high close rates, large contracts and the development of long-term relationships.<br />Kathy is a recognized national expert in assisting colleges and universities to sell more products and services to business and industry. She is a highly sought-after speaker for conferences and keynote presentations, and conducts a sales webinar series each winter and fall. Kathy is the author of the Workforce Development Benchmark Project which identified best practices on a national level, and also writes a monthly e-newsletter with the latest tips on how to prospect, conduct solution selling and close more business.<br />Kathy works with individuals, colleges and universities, state associations, and national organizations to help them better understand the importance of selling strategically in this new economy. <br />Contact Contract Training Edge, LLC<br />913-593-5347 <br />kyeager@ctedge.net<br />www.ctedge.net<br />