Team Compensation Plans are the key to a team’s productivity
Interdependence: the dependence of two or more people or things on each other.
A team motivated to help each other and work together in an interdependent manner is the strongest team imaginable. Conversely, constant infighting and whining about who appears to be “getting more” and what is or isn’t “fair” can be detrimental to a project’s success.
In his landmark book, The Seven Habits of Highly Effective People, Stephen R. Covey explains the principle of interdependence:
“On the maturity continuum, dependence is the paradigm of you—you take care of me; you come through for me; you didn’t come through; I blame you for the results. Independence is the paradigm of I—I can do it; I am responsible; I am self-reliant; I can choose. Interdependence is the paradigm of we—we can do it; we can cooperate; we can combine our talents and abilities and create something greater together.”
Interdependence is power. Covey continues:
“Interdependence is a far more mature, more advanced concept. If I am physically interdependent, I am self-reliant and capable, but I also realize that you and I working together can accomplish far more than, even at my best, I could accomplish alone.”
So isn’t it logical that we build an interdependent sales team? Using Covey’s logic, a self-reliant and capable team that works together will accomplish far greater results, a more efficient sell out. To build a team with this kind of potential requires the selection of proven, independent leaders that will embrace the chance to work together to accomplish more.
How can we help the team embrace interdependence? Incentivize them accordingly.
An Interdependent Sales Plan
Consider the concept of a “Team Fund”. Depending on the size of the sales team, designate one percent of sales revenues for the entire team to share. A fund paid out equally to each member of the sales team at the end of every month.
Team Fund = Total Sales * 1% / # of team members
— Sales Director: 2% of all sales. This is the person who you will rely on to lead the team. This person can make sales themselves and further prime the Team Fund, but their number one job should be to work with the other sales exec(s) to strategize, negotiate and help close sales. The Sales Director is aligned with marketing strategies and prepares the sales team for any advertising events. They hold the team responsible and motivate at the same time. Note: For larger projects it’s not uncommon to pay a salary plus .5% or 1% of total sales.
— Sales Executive(s): 2% percent of their own sales and an equal share of the Team Fund. They work hard to bring in as many sales as they can, but when the time comes to step in and help out a teammate it’s no problem at all. They understand that more sales, regardless of who makes them, results in a larger paycheck that month.
— Sales Administrator: Reasonable salary plus an equal share of the Team Fund. Hire this person carefully. He/she not only assists the sales team with general office duties, but is responsible for content (blog) development and social media marketing. At the end of the day your property’s social presence helps build confidence and excitement for buyers, regardless of where they came from.
A healthy, active social presence can speed sales simply by reducing any skepticism a prospective buyer might have. Have you ever stumbled upon a resort’s Facebook page that hasn’t had a new post since 2014? Doesn’t come across well does it? A little social proof goes a long way and it’s worth half a point.
— Bonuses: Save another 1% for bonuses. If the team reaches or exceeds an aggressive yet attainable team sales quota, the Team Fund rises to 2%.
If the team sales quota is met, regardless of the size of the team, the math adds up to 6% of total revenue to sales commissions, something a developer should happily pay. If the Sales Director sells on their own then the percentage will be lower, no commissions would be paid to a Sales Executive if the Sales Director makes a sale.
Six percent isn’t unheard of in development sales. In fact, developers often need to earmark up to 10% to allow for referral commissions and/or outside sales and marketing consultants. Either way, it’s totally reasonable for a more productive, streamlined team that works together.
And the better a team performs, the lower the marketing costs at the end of the day. A conflicted, fighting, underperforming sales team can extend a property’s sell out by years. That can add thousands to the marketing bill. The synergy that results from a commission plan that promotes interdependence will elevate sales performance and return on marketing investment will rise.
A sales team that works together is one that covers for each other on days off (without whining about it), handles phone calls for one another and happily takes each other’s prospective buyers on property tours. When a fellow sales exec is on a lunch break or giving a tour, their teammates have no problem covering for them.
Implementing a Team Fund will help to create a well-oiled sales machine, an interdependent team motivated to have greater success by working together. The more salespeople focus on helping potential buyers regardless of who “owns the lead” the more success they will all have in the long run.
The important part is to hire the right team players that will embrace this concept, and then train them to work together. Your Team Fund ties it all together.
About Eric: Founder of Clearview Elite and driven to make life easier for real estate salespeople. Real estate sales & marketing veteran focused on sales acceleration and efficiency. Very lucky husband and Dad, slightly above average golfer, and food and wine fan. Lives in Boise, Idaho with wife Julie and kids Nicholas and Grace.
Clearview Elite: Creating more efficiency in the real estate sales process with a professional lead response process and custom sales deliverables. Only 25% of real estate leads have an interest to purchase anytime soon, we tell you who they are and exactly when to make contact. Watch a :60 video
Share this post! If what you read was valuable and you think others might benefit from it please share with your network!