Monday, July 25, 2011
MFP & Copier Comp Plans
So, how is your commission compensation program? Is it simple, can you figure how much commission you're going to make on the fly? Or, does your commission compensation program take months and years to understand all of the if's and don'ts?
I've been around long enough to understand the two major commission comp plans such as the gross profit plan (here you get a percentage of the profit made off the sale) and the Revenue plan (Revenue Plans are quota based and your percentage of commission will be dictated by the percentage of discount along with monthly and quarterly bonuses for hitting certain month and quarterly revenue targets).
I'm no rocket scientist (matter of fact I just had to look up scientist to make sure I had it spelled properly), however I've got street smarts, quick thinking, a good listener and can go toe to toe with the best of them when negotiating deals. When I started in the industry I spent some 28 years under the Gross Profit Commission Compensation Program. I was blessed with an easy comp plan that allowed me to always figure in my head how much money I could make on the sale. Nothing is finer than walking out from the sale and knowing how much you made, and to tell you the truth it was also easier to negotiate price (if you had to) when the Gross Profit Compensation Plan.
During the last two and a half years I've been on a Gross Revenue Plan. Trust me I'm not saying that this isn't a good plan to have, it does have some finer points such as the monthly and quarterly bonuses. But it's been much harder for me to grasp how much money I can make especially if I have to negotiate price on the spot. Personally the reason I've been in this business for so long is the fact that I could also create additional income when needed.
Years ago, it was possible to make $1,500 - $3,000 per unit. Nowadays it's a whole heck of a lot less, but to be fair both companies that I worked for that had the Gross Profit Plan eventually bit the bullet! So, I guess the grass is not always green on the other side and comp plans are what you make of them. A key to everyone is to understand all of the points of the comp plan, pretty much know the in's and outs. This will lead to a much better relationship and will forgo any surprises that may come down the road.
I'd like to hear from others as to what type of plan you have and what you like about and what you don't like. I like my new comp plan however if I had one wish it would be that I had someone to explain it to me instead of me having to comprehend all of the finer points.