COMMISSION AND YOU
If you’ve heard the term” Commission and you pay” then you are probably familiar with what it means. Commission and you pay programs have become the most effective way to reward and motivate high performance sales teams. Whether it’s a sales manager awarding an award to a top salesperson or corporate office rewarding employees who demonstrate outstanding performance, commission and you pay programs have proven to be an effective and profitable alternative to traditional salary and benefit plans.
Commission and you pay programs differ from conventional salary and benefit plans in several important ways. For starters, they do not offer fixed salaries or commissions for every single sales transaction. Instead, salespeople are compensated on the basis of the volume of sales that result in a monthly residual commission. This means that in the case of a month when a significant number of sales are reported, a high-performing real estate strategist will not necessarily see his or her commission boosted that month. The same is true for seasonal salespeople and those who work on commission only for a short period of time.
Another key difference between commission and you pay programs is that commission payments are not tied to the last month’s sales results. Instead, the commission rate is determined at the beginning of each month. For example, if a month’s commission rate is thirty dollars, then the rate for the entire month will be twenty-one dollars. For salespeople that consistently produce a high volume of monthly sales, this can be very valuable because the actual rate can be much higher than the rate earned through salary or benefits.
A third difference between commission and you pay programs is that incentives can be built into commission rates. Incentives can be awarded to a salesperson if certain sales are made during a month. This can either be an individual incentive pay for a specific monthly sales record, a specific type of customer, or an industry-related incentive pay. Incentives can help boost sales and are particularly useful for seasonal salespeople who expect a dip in sales during certain months of the year.
Some incentives pay for the month’s total sales volume. Incentive month packages are available through many commissions and affiliate programs. Other incentives pay for specific items that are purchased by a specified number of customers over a specific period of time. These can be beneficial for long-term retention of customers, as they are often used to reward repeat business. Additionally, some companies pay their sales associates based on the sales volume of their primary products, which may help improve sales from secondary products that are used in conjunction with primary products.
As you can see, commission and you pay programs have several differences, including the types of incentives that are offered. Regardless of the incentive structure that is used, however, both programs pay close attention to customer satisfaction as they are looking to increase customer loyalty and retention. This is especially important for commission pay programs, which depend largely on customer loyalty for real estate commission revenue. Both commission and affiliate programs have solid research methods and practices to ensure customer satisfaction. The key to success with one program may not be exactly the same as success with another.