PBMA 2008Compensation
Underwriting Sales Reps
Presented by: Kirk Nelson
PRP Client StationsPhoeni
xPhoeni
x
Seattle
Seattle
Nashville
Nashville
Austin
Austin
DenverDenver
Sacramento
Sacramento
St. Paul MinnesotaSt. Paul Minnesota
Cincinnati
Cincinnati
Question’s
1. What concerns or frustrates you most about your current comp plan for corporate support?
2. What’s your GOAL?
Session will Cover
• Define Compensation
• Understanding Dimensions to Selling
• Designing a Plan for Your Market
• Five Different Plans – Pros & Cons
• Achieving Results
Compensation Defined
Dictionary.Com1. The act or state of compensating
2. The state of being compensated
3. Something given or received as an equivalent for services
Understanding Sales Types
• Retail Salesperson– Reactive selling/business comes to you– Focus on product features benefits
• Outside Salesperson– Pro-active selling/you go to the business– Focus on:
• Product features and benefits or • Customer focused-solutions
• Telemarketing– Lead generator or product peddler– script selling – Focus on sale
• Industry-Type– Short or Long term sales– Focus on buyer needs
Broadcast Sales
• Product Peddler – High Plan – Low Participation
• Counselor Representative– Low Plan– High Plan – High Participation– Relationship
Reward What You Need?
• Spot Sales– 9% Existing Business and renewals– 20% New Business first 15 months
• 25% Web Sales • Events
– 10% Renewals– 15% New Business
• Group Market Stations– 15% Lead Sales Rep– 9% Station Rep
• 1% Business 10%+ Quota• 2% Business 20%+ Quota• -1% Deduction less than 95% of Quota
Value of Inventory
$25
$50
$50
$175
$275
$3,200
$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500
Broadcast
Events
Web
Specials
Other Values in thousands
Selling Compensation Continuum
Hard
Easy
Degree of Difficulty
Designing a Plan for Your Market• Understand your markets value
• Market Compensation Considerations– Total Compensation Statement
• Recruitment - Positioning Your Compensation
Understanding Your Market
• Public Broadcasting Profile• Excessive Talent Pool• Growing Market Economy • Culturally Dense• Rich in Public Broadcasting
Categories• Commercial Competition• Public Competition
Compensation Considerations
• Pay – Commission, Salary, Both • Medical Benefits• Education• Non-taxed Retirement Accounts• Time Off• Retirement Benefits• Station Position – 1st or 2nd tier• Work Environment• Selling Tools & Support
Recruiting
The 7 Behaviors• Customer Service• Self Management• Written Communications• Persuasion• Interpersonal Skills• Goal Orientation • Presenting
Recruitment Posting
Do You Love Public Radio (Television)… Corporate Sponsorship Sales - Public Radio
Partners seeks determined and persuasive sales professionals to join our public radio sales team at XXXX. Position requires the development of new business and excellent communication and presentation skills. 3 years sales experience and 4 year college degree required. Media or marketing related sales experience preferred. Please e-mail cover letter and resume to xxxx xxxxxxxx at xxxxxx.com
Promote your Total Compensation Value
Statement to Good Candidates
5 Types of Comp Plans
1. Salary Only2. Salary + Commission3. Salary + Commission + Bonus4. Commission Only5. Commission + Bonus
Plus Sales Manager Comp Model
1. Salary Only - Station
• Station Perspective+ Easy to budget + Easy to manage
cost of sales+ Easy to process
– Difficult to recruit “good” sales people
– Difficult to motivate sales people
– Station must create demand
• Employee Perspective+ Guaranteed Income+ Can budget
accordingly
– Slow income growth– No incentive to grow
revenue
2. Salary + Commission
• Station Perspective+ Greater motivation
to promote budget attainment
+ Better recruiting tool
– Requires establish trends to budget
– More time to process payroll
• Employee Perspective+ Provides safety net for
reps+ Modest opportunity for
income growth
– Significant upside may be difficult
3. Salary + Commission + Bonus• Station Perspective
+ Excellent recruiting tool
+ Promotes budget attainment
+ Promotes employee engagement
– Requires establish trends to budget
– More time to process payroll
• Employee Perspective+ Provides safety net
for reps+ Opportunity for
income growth
4. Commission Only
• Station Perspective+ Budget against
projected billing+ Cost of sales
variable based on performance
+ Good recruiting tool
– Incentive flexibility for budget attainment
– Expect Low performer turnover
• Employee Perspective+ Significant income
potential for high-performers
– Viability of income based on ability to perform
5. Commission + Bonus
• Station Perspective+ Budget against projected
billing + Excellent recruiting tool+ Promotes budget
attainment+ Promotes employee
engagement
– Requires establish trends to budget
– More time to process payroll
– Expect Low performer turnover
• Employee Perspective+ Significant income
potential for high-performers
– Viability of income based on ability to perform
Sales Management Comp
Cost of Sales Considerations
• Cost of sales– Whatever the cost, employee comp stays the
same
• Total Compensation Package– Base – Commissions– Team bonus– Individual bonus– Discretionary Incentive flexibility
Compensation Agreement
• Guaranteed Commissions• Guaranteed Commissions Pay
Structure• Individual Commission Structure• Charge Back Policy• Termination• Background Check & Drug Screening• Acknowledgement
Achieving Results
• Responsibility– answerable for something within one's
power, control, or management
• Accountability– Being accountable, liable or answerable
Responsibility
• Sales Manager– Assigning realistic quotas
• Obtainable objectives• Based on station or industry benchmarks
– Maximizing department revenue potential– Overall department development– Tools to succeed
• Sales Rep– Understanding departments, and individual
goals and objectives
Accountability
• Manager– Attainment of budget objectives
• Monthly, quarterly, annually– Department account collections – AR minimums
• 30, 60, 90 & 120+
• Sales rep– Meet or exceed personal Quota
• Monthly, quarterly, annually– Personal account collections – AR minimums
• 30, 60, 90 & 120+
Rep Growth Rates
• First Year 100K – 150K• Year Two 250K
• + 50 – 100 % prior year
• Year Three + 25 – 50%• Year Four + 20%• Senior Rep +10%
New Rep Growth Expectations
$0 - 1,500 Month 1 $2.5 - 5,000 Month 2 $5 - 10,000 Month 3 $7.5 - 10,000 Month 4 $8 - 12,000 Month 5$8 - 12,000 Month 6$10 - 15,000 Month 7$10 - 15,000 Month 8$10 - 15,000 Month 9$12 - 20,000 Month 10$12 - 20,000 Month 11$12 - 20,000 Month 12
Benchmarking Performance Radio
Benchmarking Performance TV
Salary Only
• Measure activity during Probation Period– Time in, time out– # new business calls
• Daily, weekly
– Total # calls• Daily, weekly
– # presentations• weekly
– # Sales
Revenue Versus Collections
• Revenue is predictable three months • Revenue can be:
– Planned – Predictable– Sustainable
• Collections can be erratic• If rep leaves there’s little motivation
to work account
?? Questions ??
Presented by: Kirk Nelson
