Salesman Compensation

You get what you pay for. By offering a base salary which no successful person would consider you filter out all but those who cannot get a better deal. You want a salesman who can intelligently and knowledgeably discuss clients' security needs, plan an effective system and close a sale. People like that don't come cheap.

So if I understand you,, you are saying no base and 10-15% of total sale is cheap? What would you consider reasonable?

James B

They have a choice of staying at $1800 a month and 5% commission, or going on straight commission at 18% after six months. They get a company car, benefits, laptop and phone. They get a performance bonus on a regular basis. This could be in the form of airfare and hotel to some exotic local (Cancun or Hawaii), or the 32" plasma TV one of the guys got just recently. The first month they spend part of their time in the field as an installer's helper. They learn the finer points of running wire and what it means to fish an outside wall. Right now they're all on straight commission (and doing well).

About a million years ago when I worked for ... somebody else. I got $500 a month, no allowance for anything, very little support, 10% of gross bottom line on all contracts, plus $25 for each new monitoring contract, and 2X the RMR amount on new monitoring/maintenace/lease contracts.

An $800 alarm with monitoring would net me between $170 and $200.

-- Bob La Londe - Webmaster

Tornament Director

I misread your original message. 10-15% should be OK if the tickets are high enough and you're providing plenty of solid leads. I assume you will also include benefits such as health insurance, etc.

We've considered hiring a sales person with commission only or base salary plus commission. I hope to have someone (maybe two) working full-time before our next extended trip (looks like next year it might be Italy). Margins are slimmer but volume is significantly higher with an online store than a brick and mortar dealership. A talented, experienced sales rep should be able to earn well over $100K. If he can't make that much either he's ineffective, his employer is being unfair or the market is not there for his product at his price point.

Actually, it was I who misunderstood you. If you provide three or four solid leads a day at 15% commission, a competent salesman should deliver one or two sales a day at $3K (average cost of a comprehensive, hard-wired, residential system in CT while I was there) each. That would translate to a decent pay rate for the salesman and solid revenue for you.

If you were pushing lick-and-stick garbage like Fowler the salesman wouldn't need much technical skill but he'd have to be expert at high pressure, "one call closing". Those guys typically make less money than a skilled sales rep and they usually flip from one employer to the next. I used to see the same guys' names on business cards from different competitors every few months. Those are the creeps who tell the customer anything to make a sale, leaving you to clean up their mess during the installation.

Note: I assume you are *not* the sort of dealer who would pull a Fowler on his customers. The above is mentioned only for comparison of different sales strategies.

Why must you turn every legitimate discussion thread into a slam against another participant? I simply don't understand you. Think back a few days to your "Happy Easter" message. What a positive feeling that gave me. Then, less than three days later you come up with this shit and "the music" starts all over.

Frank Olson

I hear ya, Bob. We actually modelled our compensation package after Chubb's. Back when I worked for them, they were a progressive positive force in the industry that provided excellent support and training (both service and sales). These days, they appear to have given up that position to ADT (at least locally). That's a genuine shame.

Frank Olson

Buy them a couple of cases of cat food when they start, and pay them straight commish. That'll separate the guys who SAY they can sell from the guys who really CAN sell. :)

Regards,

Frank (No, not that Frank. The other one.)

The problem with those deals is you have to hustle like crazy to make four sales a day. I'd rather turn two sales a day into the same net earnings. Also, clients who invest more in the system tend to stay with you longer (all other things being the same, that is). RMR gains are much better over the long run if the average client remains with the company for 10, 15 years or more.

The fast sale, quick install junk some of these companies push may result in rapid initial RMR growth but attrition it so high that they reach the point of diminishing returns in a year or two. The other problem with selling to the bottom of the end is the market becomes somewhat saturated, especially with the large number of "authorized dealers" pushing lick-and-stick trash.

Note: The above is not intended to imply anything about you, Bob. I'm commenting about the security system market in general. Unfortunately, those "free" system sales adversely affect companies selling legitimate systems in the lower price category by undervaluing your goods and services in the eyes of the consumer. In the high end sector I'm sure you've noticed that the "authorized dealer" garbage rarely impacts you. These are all financial incentives to concentrate on offering comprehensive protection.

Interestingly, there's a parallel to this in the online market. Most of the online dealers seem to concentrate on selling cheaper stuff like DSC. Only a small percentage of online dealers try to market high end systems and almost none offer much in the way of commercial fire, high end intercoms and CCTV. Guess who gets the lion's share of that market. :^)

Do I read you correctly Frank ? Are you saying that ADT in your area "provide excellent support and training" in both service and sales ? No offence Frank, but I truly find that hard to believe based on my experience with them here in the Ottawa area.

Chubb on the other hand seem to be a fine company, with well trained staff, and although they do primarily commercial work which I don't come up against, my overall impression is very positive.

I know I have been accused in the past of an "anti ADT" bias, and I suppose that is true, but it's only because of what I have seen first hand, both through takeovers and interface with them as a third party dealer. They are some of the worst of the worst, only exceeded by Alarmforce. And since ADT is now controlled nationally out of Vancouver (I believe), I find it hard to believe that in the Vancouver area they could be that good, and so poor around here...

What gives ?

RHC

It's easier to program via the keypad, and many of their panels offer more in the way of features (that people like) than the "higher end stuff". TLM for instance has been a DSC standard since the introduction of the PC-2550. Most of the comparable Ademco, FBI, Moose, Morse, and Napco stuff back then needed the addition of a third party TLM relay board (or you paid big bucks to upgrade to the panel model that incorporated the feature). DSC still manufactures one of the most user and installer "friendly" systems out there.

Smarthome?? :-)

Bollocks, you mentioned "the above" in order to stir the pot, you whine like a baby and throw childish tantrums when someone says something about you that you consider derogatory, yet you continue to take swipes at other participants.

Doug L

I have no idea, Bob. I guess it has to do with the local management team.

He's a sociopath, Frank. He digs this shit.

I've worked in the high-end resi market, the middle-class resi market, and industrial/heavy commercial. While DSC wasn't usually robust enough for the higher end stuff insofar as features and capabilities are concerned, it has proven itself to be very reliable and extremely user friendly. The DSC stuff had at least as good a reliability rate as Ademco, Napco, etc., and is a helluva lot cheaper and more user friendly, not to mention simple to service. For any average sized home or small business, I always recommend DSC.

I can afford any system I want, as can other family members. What do we all use? DSC Power 832. (PC5010)

I've read a few of the suggestions here, and wanted to throw one more idea in- a "training" guarantee. Pay a guarantee of $XX for the first month, decreasing over the next 2 or 3 months, and pay straight commission. When the commission exceeds the guaranteed amount, pay the larger of the two. Give them X amount of time to reach certain sales goals, and cut em loose if they don't show real hunger.

There is a question I always used to ask my interviewees when hiring for a sales position- "What do you want most from this position?"

If the answer is some canned crap like "a successful career" or "to contribute to the company's growth" or "job security" I cut em loose.

The right answer? "To make obscene amounts of money." This hunger produces successful sales people every time.

ADT corporate probably provides good training and support to their staff. The ADT "authorized dealers" whose atrocious work is world renowned are a different breed. Most seem to give their sales reps a quick pep talk and a price list, then send them out pounding the pavement.

Bear in mind that you are responding to Olson. He just makes this stuff up as he types it.

Commish should be before sales tax. If you do a car allowance, make sure you have the salesman do a trip reports for your taxes.

Salesmen drive me nuts. If you hire one and make sure you have him go out with installers before you send him out in the field - nothing worse than having a saleguy tell a client that you'll install a motion detector over there...and "over there" is a concrete wall :-)