Posts Tagged ‘commisions’

Now there comes a point in time in every agents life, when a New Sales VP at your favorite Service Provider comes in and takes over your old Sales VP’s job. That’s a pivotal point in time in every sales agents life. The new guy is going to really want to kick the old guys ass. Make a big splash, improve some numbers quickly and leave no remnant of the last guys program.

Robert Duller’s power point flashed on the screen and you could hear the glasses in the room being placed back down on the banquet room cocktail tables. Eyes swung forward to the screen.

What typically happens now is the description of why the old plan or old contract was bad…and why a new contract needs to be created. In this instance, we’d received an ominous email about a month ago, quoting an obscure lawsuit filing that required a plan change so that they could be in  “compliance” going forward. At the time, we didn’t think much about it because the lawsuit was brought over price fixing on equipment, and well, we were in the services business.

“The old plan and the commission levels that were in it are too high and are therefore unsustainable going forward.”

Stake into our hearts. Our balance sheets.

“Now we want to let you guys know just how valuable that you are to us. So we’re going to take some time here and go over what will be required for the new plan going forward.”

Silence in the room. “Um..we already have a portfolio of clients here, did he just say, What will be required?

Unfortunately, yes. What ensued over the next 90 minutes was a complete dismantling of the old plan as we knew it.

Our commission payout percentages, client upgrades and getting paid on contract renewals. All gone in the first few slides. We had a multi million dollar portfolio of clients that we’d built over the past 4 years that didn’t seem to mean anything.  Commission percentages alone were dropping 75%. We had to qualify with hitting a number of deals as well as higher revenue commitments. We were stunned…

We also had a contract that had about 12 more months in it.

Now Robert was not the most popular guy in the room – or for many months after, but this happens all the time in Sales organizations. The new gal comes in and takes a look at commission checks that are going out to the partners and sees a great opportunity to take back some revenue. Its to be expected in some parts of the sales universe.

All the more reason to have a very good contract and one that you invest in having an attorney review and modify so that your business interests are protected. That means commissions, renewals and upgrades need to be protected in your contract if you are a sales agent. Paying someone $1500.00 to $2000.00 now to review your contracts and make changes and suggestions can save you tens of thousands of dollars down the road. Keep in mind that sales leaders will change, the person you sign your contract with will move on to another position, your service provider will more than likely have in house counsel and if things get dicey down the road, you will be paying your attorney by the hour if there’s a dispute. They will not.  Invest up front.

There have been many more  trips to Texas since then  to work on our new relationship. It’s a work in progress!