The Anatomy of a Commission Sales PlanPresented by:Warren Dietel, President & OwnerOrlando, FL
My StoryWarren Dietel, Owner & President• Entrepreneurial from the beginning• Professional Experience – Car Detailing, Puff ‘n Stuff Catering, Disney Weddings, Disney Institute, Scott Kay• Purchased PnSC in 2003• Current ICA board member and regular speaker for the ICA, NACE and The Special Event
The Puff Story• Opened in 1980, purchased in 2003• Tremendous potential + aggressive growth plan = 267% growth in 3 years• (4) Exclusive venues and over (400) staff members strong – Diversifying segment base• 2011: expanded in Tampa market with an acquisition and opening of a second office• “Passionately Perfecting Life‟s Celebrations!”
Mission, Vision & Values• Develop a picture of today, tomorrow, and what governs decisions• Put the foundation in place to support excellence and growth• Use an outside source to assist with development• Create a plan that includes assessment of and future planning for – Management – Staff – Customer Base – Research and Development – Human Resources – Operations – Sales and Marketing – Financial – Technology
The Mission A mission statement is a brief written statement of the purpose of a company or organization. Ideally, a missionstatement guides the actions of the organization, spells out its overall goal, provides a sense of direction, and guides decision making for all levels of management.
VisionA vision statement outlines what the organization wants to be. It concentrates on the future. It is a source of inspiration. It provides clear decision-making criteria. Puff „n Stuff Catering will possess the systems and procedures necessary to provide the foundation for excellence and profitable growth. We will be recognized as the event/catering organization of choice by our team members and clients.
Core Values Core values reflect what is truly important to an organization. These values do not change from time totime, situation to situation, or person to person, but are the underpinning of a company’s culture. Professional – In behaviors and appearance Respect – For self, team members and clients Own – Accountable for each others’ success and safety Anticipate – Serving team member and clients needs Communicate – Timely, accurately and honestly
Building a Case forIncentive Based Compensation • Create a WIN/WIN opportunity What motivates employees? • Money & Performance Pay • Recognition & Appreciation • Ask them! • Balance perceived positive and negative reinforcement • Incentive programs = positive • Accountability = negative • Place value on the behaviors driving company objectives • Creates ownership mentality – untapped potential The role of a good manager/leader is toguide employees to work on what is most important in the most efficient manner.
How to do it ... EFFECTIVELY • Begin with the end in mind know your desired result • Set clear, upfront expectations • Create measurable and focused goals • Make the plan easy to calculate • Ensure the plan is accurate the first time • Review with a labor consultant/attorney • Assign leadership to champion the process • Perform regular, reoccurring performance reviews Wouldn‟t it be great if… every individual in your organization had a real stake in, and understood how they are impacted by company success?
KISS• Keep it simple and special (KISS)• Good plans = easy to implement and follow• Be clear about the incentives and how employees earn them Performance indicators that are too detailed and complicated to track waste managements time and confuse employees
Employee EngagementEmployee Engagement is a positive attitude held by the employees towards the organization and its values.An engaged employee is aware of business context,and works with colleagues to improve performance within the job for the benefit of the organization.
Creating EngagementLeadership must:• Acknowledge individual contributions• Deliver supportive feedback• Foster collaborative interdepartmental working relationships• Provide empowerment that promotes success• Discuss expectations that set clear, challenging and attainable performance goals• Show that you and the company care about employees and their success• Trust and get out of the way
Orlando Sales Team Structure Warren Dietel Owner/President Sharol Brennan Vice President Heidi Brice Crystal Milliken Sr. Special Event Planner Intern Heather AllenSpecial Event Planner Assistant Mary Brumley Tina Osterman MaryBeth Farrell Special Event Planner Special Event Planner Special Event Planner Jamie Kennard Sandy George Dana Alvarez-Ferry Emily GeorgeSpecial Event Planner Assistant Special Event Planner Special Event Planner Special Event Planner Nicole Gerardi Special Event Planner Carli Cepek Intern Michele Butler Special Event Planner Ballroom Corporate Naomi Clements Paula Sautter Wedding ConventionReception/Lead Distribution Special Event Planner
Key Plan ComponentsSEPs:• Participate in forecasting annual goals – market, prior experience, and company needs• Are assigned to specific vertical markets – Opportunity to sell outside a defined market is available – Relationships trump everything• Earn commission on both gross profit and gross revenue• Participate in a lead rotation with set parameters – Venue assignment• Receive administrative support – On a 1: 2 ratio for <$1M annual revenue – Dedicated for >$1M annual revenue• Marketing expenses are absorbed by the company
Compensation Components• Food, beverage, and company-owned rentals are commissioned at a rate of 8.5% of gross revenue.• Venue fees, delivery fees, and other direct costs are deducted before calculating commissions. Food & beverage sale of $10,000 and $4,000 in Guest Seating/Linens Total sale of $14,000 commissioned at a rate of 8.5% resulting in a commission of $1,190 for the SEP
Compensation Components• On approved discounted business, commission will be calculated on the reduced gross revenue at a rate equal to the reduced commission. A discount of 10% on a $10,000 food sale results in $9,000 gross revenue. Commission is equally reduced by 10% (from 8.5% to 7.65%) 7.65% is calculated on the $9,000 gross revenue resulting in commission of $688.50
Compensation Components• Service Personnel sales are commissioned at a rate equal to the percentage of gross profit – Maximum potential - 30%. 100 labor hours are estimated for an event at $30 per hour = $3,000 125 labor hours were needed to produce the event with a cost of $1,800 Gross Profit = 40% - $1,200 SEP receives 30% of the Gross Profit - $360
Compensation Components• Subcontracted services are commissioned at a rate equal to the percentage of gross profit – Maximum potential - 30%. Our cost to rent a small tent is $1,000 The client is charged $1,250 (25% markup) Gross Profit = $250 SEP receives 25% of Gross Profit - $62.50
Compensation Components• Year End Bonus: If total annual sales of a SEP exceed his/her annual sales goal, then the SEP is eligible for an individual bonus of 5% of the amount of actual sales over the annual goal. For Example: Actual individual sales $ 1,375,000 Individual sales goal $ 1,200,000 Amount eligible for individual bonus $175,000 Bonus percentage 5.00% Bonus $8,750
Reporting & Payment• Finance supplies sales reports to SEP at month end• Payment-in-full must be received to earn SEP commission• Commission for a month is calculated and paid equally over the total number of pay periods in the subsequent month For Example: January commissions are divided and paid equally over the pay periods in February
Thank You! To download a copy of my slides, go to: http://www.slideshare.net/WarrenDietel Warren Dietel email@example.com | 407.629.7833www.facebook.com/puffnstuffcatering | Twitter: @pscatering