PBMA 2008
Compensation
Underwriting Sales Reps
Presented by: Kirk Nelson
PRP Client Stations
Phoenix
Nashville
Denver
Austin
Sacramento
St. Paul Minnesota
Seattle
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.Com
1. 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
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–
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–
Low Plan
High Plan
High Participation
Relationship
Reward What You Need?
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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
Broadcast
$3,200
Print
$275
Events
$175
Web
$50
Specials
$50
Other
$25
Values in thousands
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
Selling Compensation Continuum
Degree of Difficulty
Easy
Hard
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
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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.
2.
3.
4.
5.
Salary Only
Salary + Commission
Salary + Commission + Bonus
Commission Only
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
• Employee Perspective
+ Greater motivation
to promote budget
attainment
+ Better recruiting tool
+ Provides safety net for
reps
+ Modest opportunity for
income growth
– Requires establish
trends to budget
– More time to process
payroll
– 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
• Employee Perspective
+ Budget against
projected billing
+ Cost of sales variable
based on
performance
+ Good recruiting tool
+ Significant income
potential for highperformers
– Incentive flexibility
for budget
attainment
– Expect Low
performer turnover
– 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 highperformers
– 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
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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
$2.5 - 5,000
$5 - 10,000
$7.5 - 10,000
$8 - 12,000
$8 - 12,000
$10 - 15,000
$10 - 15,000
$10 - 15,000
$12 - 20,000
$12 - 20,000
$12 - 20,000
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
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