Nuts and Bolts of Newspaper
Advertising Sales Compensation
By Bob Berting, Berting Communications
Every publisher is challenged by the desire to increase profits over the previous year. While everyone in a publication hopes for an income increase, the sales staff, being aggressive and go getters by definition, can be expected to always seek an improved compensation package.
What about straight Commission?
Most publishers equate a straight commission arrangement with the advantage of a built-in monitor that requires virtually no spur to keep the salesperson going full blast to bring in a lot of new business. Many times straight commission salespeople feel they are in business for themselves and can pursue their own activities without regard for the publisher’s objectives. The better they are, the more freedom they want.
Sales Territories and Sales Reports
If sales territories are allocated geographically, the straight commission salesperson may be sitting on the paper’s largest accounts and thus might not be making the most of the sales potential in their territory by not effectively calling on the smaller accounts. From another viewpoint, commission salespeople may find themselves in a territory where there is less potential, thus severely limiting their compensation and creating a morale problem for the publisher, who might feel that the area deserves more exploration.
Sales reports, an important factor in management, may not be important, as are early morning sales meetings. After all, they are in business for themselves and sometimes, can’t be bothered by “office details”.
Base salary plus commission
A large percentage of publications use a base salary plus commission. Sometimes the commissions are linked to gains over the previous year or on sales management selected objectives. In many cases, the salary starts relatively high and is scaled back every quarter to a relatively set level as commission sales increase. Many times, under a salary plus commission arrangement, the salesperson may be required to file a sales itinerary daily indicating which accounts he or she intends to call on, and at the end of the day, create a report on the results of their efforts.
A growing number of publications are paying their salespeople a straight salary –and here are some advantages to that plan of compensation:
- Places emphasis entirely on the customer’s needs, rather than the salesperson’s pocketbook. Can be used as a selling tool when the client realizes the advertising consultant is not there to make recommendations based on a commission.
- Turns your sales staff into creative marketing consultants rather than order takers.
- Gives smaller accounts the same importance as larger ones
- Forces sales managers to coach for improved performance rather than ways to find the right incentive plan
- Promotes a greater sense of teamwork.
Thoughts about money vs. other factors
What motivates salespeople? It’s not always about money—even though some sales trainers insist this is the only factor. Many advertising salespeople want to be noted for their creativity, while others want to feel they are achievers and want to be respected as successful marketing consultants.
Recently I have polled several publishers about income for their salespeople and here are some of my findings:
Many salespeople maintain a weekly sales volume that gradually increases over time and the average compensation for salary based on weekly volume is:
Beginner—2000.00 volume—salary: 300.00
Some experience—3000.00 volume—salary:400.00
Heavy experience—4000.00 volume—salary: 500.00
Outstanding—6000.00 volume—salary: 700.00
Top Pro—8000.00 volume—salary: 800.00
Salary plus commission: above salaries plus 5 % commission
Commission only: 20% of paid receipts—a great way to make sure bills are paid before a salesperson is paid.
There are probably some of you reading this article who pay their people differently, but if so, please let me know at email@example.com.