HVACR Business

JUL 2017

Help hvacr contractors master the critical components of business management.

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8 HVACR BUSINESS JULY 2017 www. hvacrbusiness .com Sustain sales, profits, performance and customer happiness with an effective compensation plan CLEVER COMPENSATION W hen leadership and management systems promote proper op- eration, rich residen- tial salespeople equal rich residential companies. Personal and company success comes from customer happiness and loyalty. Customer happiness and loyalty is derived from happy sales and service personnel caring for customers and providing an ex- cellent experience worthy of remarkable reviews. And a company's success results from customer and co-worker happiness and loyalty and the performance of its people and their ability to sustain sales at profitable levels. erefore, a clever compensation plan is one of several critical components for rewarding personal performance while behaving in a manner consistent with the company vision, mission, core values and strategic corporate goals. A properly designed sales compensa- tion plan stimulates sales of and profits from products and services, drives achieve- ment of company objectives, and attracts and keeps sales representatives produc- ing at increasing rates by incentivizing performance. A residential salesperson compensation plan can be based on a salary, a commis- sion or a combination of the two compo- nents. Additionally, sales compensation should include incentives for achieving pre-determined sales metrics. Salary Plan Salespeople are paid a fixed rate of compensation. ey may periodically earn additional compensation such as bonus- es, performance incentives, sales contest awards/rewards. Setting a salary is typically based on ex- perience, ability and longevity along with a job description outlining duties and re- sponsibilities of salespeople as well as oth- er required activities (e.g. attend meetings, work home shows, etc.). In the end, the final determination is on a discretionary basis. e cost is covered in departmental overhead. Advantages: • Guaranteed income • May develop loyalty • Allows for flexibility in meeting company objectives A clever compensation plan is one of several critical components for rewarding personal performance while behaving in a manner consistent with the company vision and strategic corporate goals. BY DREW CAMERON

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