Radio Sales Café

Am wondering what is the policy at the station where you work concerning commisions. Are most people paid on sales or on collections? If paid on sales, at some point are there charge backs if a client does not pay...if so what is the time frame on the charge back ..is it if the client doesn't pay after 60-90-120 days? Also, are you responsible 100% for your own collections or does your business office help with phone calls, etc., and has anyone lost a client because an office staff member called them about their past due account? We're having some "issues" and am wondering what other station policies might be. Thanks!

Hi Joel:

Thank you for your response. It makes perfect sense that things be handled that way. What size market are you in?

our sales people get 5% commission on their sales, as the customer pays the bill, not when the order is placed. any clients/accounts that a salesman takes over from another salesman gets 2% commissions on any previous sale once the previous salesman's commission time is expired. for example if you give 2 weeks notice you still get commissions for 2 months after you leave, however without giving notice you forfeit all commissions earned after your last day with the company.

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Jan,

We pay commissions on collections. We have found that having the salesperson involved in collections has been helpful in speeding collections because the salesperson wants to get paid. We also think it is valuable for the salesperson to make a personal evaluation of the business during the sales process so he/she is sure that the business can afford to purchase the advertising. We help them with this process by requiring a certain amount of cash in advance and credit applications from businesses that we haven't done business with before. Frankly our credit policy is tight....net 15 days from date of invoice. If an account is over 30 days, our salespeople call to be sure the invoice/statement was received and to determine if there is some problem. Accounts over 45 days get a call from our Business Manager, and if at 70 days the bill isn't paid and the account is still on the air, we cancel the schedule and turn the account over either to a local attorney or to our collection agency. These are difficult times and maintaining cash flow is vital to our business. The only way to do that is to do a great job of selling while making sure the people we've sold can and will pay for our service. Obviously this policy is difficult to administer is you do a lot of agency business, but in our case 95% of our business is local direct.

Thanks Hal! You said what I wanted to hear, that at some point, not too far into the situation, someone other than the sales rep attempts to collect. We are in a small market and know most of our customers on a personal as well as professional level and I have found that at some point in collection process, it becomes embarrassing for the client to tell us they are in trouble or have no money. Thanks again.

I may be the only sales manager in America that believes this, but we pay on sales. It seems like the only fair way to me. I set up the account lists, I tell them who to call on, I help them put together advertising plans and promotions for clients and even help them close sometimes, and when they don't pay, I don't pay them for the work I told them to do? How can that be fair? Personally, I wouldn't work for a station that paid on collections.

Another pertinent post by Stephanie Hoff here: http://radiosalescafe.ning.com/forum/topics/collections-1

I have always had a problem with paying on collections. I'll tell you why:

A salesman by definition is someone who is in it for the thrill of the sale. This off sets the constant rejection they suffer. Now, imagine a salesman who cold calls a guy in July. He sells em in August and they start in September. First bill arrives October 1st, station gets paid on the 15th (okay we're fantisizing here, go with me on this) and so the rep gets paid in in November. THAT serves their need for gratification?

I pay on sales. If the account goes 90 for ANY reason (including "the check was in my car and I forgot to drop it off"), the commission on the part that went 90 is chanrged back. If they pay it in 91 days or 120 days it does not matter, they are not getting any back. This iron clad chanrge back is what makes it work.

Some will tell me "the sale is not complete until the money is in". I agree. Some will tell me that "charge backs" are demotivational. I say a few things to this:
1) Fear of loss continues to be higher than a desire for gain
2) A salesman who needs extra money in next months pay check has a way of making it (and a sales team is more motivated to make goal). If paid on collections, they are looking six month our before they see the fruits of that cold call today.
3) Sales managers are charged back a percentage too when a salesman goes 90. This INSURES that sales managers are paying attention and that if an account is going long, the sales manager will step in and get that collected or he/she loses money too.

I have been paying on collections for about seven years now. I am happy with the results.

Thanks for your reply. Do you have any openings??!!! Just kidding. The biggest part of the work is the sale and there is not one account rep here at this station who would not pursue the collection end as well, nor would I think any other rep would not follow through on collecting but I don't think our entire paycheck should depend on it. Sometimes we will all get the jerk who doesn't pay ...but I did the work for him, I should get something! Plus I think more office staff at the station should be involved in the collections process.

Hi all! I exchanged emails with Jan this AM, and she said she'd closed this discussion earlier because she thought the topic had been addressed pretty thoroughly. So I'm going to go ahead and close it down again. However, if there's something you'd like to add to it, just shoot me a message and I can re-open it. Thanks! ~ Rebecca