This week’s Poll Question stems from a new member’s recent post (“New and Feeling Lost”). Toni is brand new to radio sales and wants to be successful, but has yet to make her first sale.
Toni writes: “I am working on a commission based pay only and my personal finances are going to suffer if something doesn't change for me soon.”
My initial reaction was: why isn’t her station supporting her with some sort of base salary and training during her crucial first few months on the job? Isn't it kind of counterproductive to put a brand new salesperson in this difficult “sink or swim” situation?
So, here’s today’s Poll Question in two parts:
1) Thinking back to your first radio sales job, were you given a salary or did you start out on a straight commission-only basis – and how did that affect your performance?
2) What is the practice at your station today where brand new salespeople are concerned?
Look forward to hearing your thoughts.
When I started, you were given a full salary on the first month, then that salary diminished month after month. The idea was that you were to add billing to replace your dwindling salary. I think this is best as it allows you time to build up your account list.
If they want you to start on commission immediately, then I think the station needs to give you some accounts that are already billing so you have a base. You won't keep good people by saying, "You're hired. Go make some money." That's pretty cold and I wouldn't work there.
Not sure what our practice is today. Not privy to that info.
When I started I was given a small salary, more to cover gas in a large market (Boston). We were a small station. It was tough making sales. When I reached the big station, it was a small salary but I had a list and the station was well known. Things went better. When I reached sales management I hired very carefully and told each new hire to figure how much they needed to survive and add a few bucks to take their spouse out to dinner weekly. After 90days the salary ended and each was on commission. That worked well, and the station was doing well.
Now I am selling for a small station. (I know I should retire but what then...) The station owner is new to radio. He made his money in real estate. We are two salespeople - not enough. The owner hires people, gives them nothing and after a few days, the salesperson quits. It's discouraging for them and for us. He says "Train them" but they don't hand around long enough. Now we have two more. Geez, you just discouraged me. Thank God, its Friday.
I started my first position in radio sales in 1994. I have always been on a Draw/Commission. I think the plan that I am on now with CUMULUS is the most sensible and reasonable ramp-up plan I've ever seen in the industry.
The draw works as your salary/security while you are building your business up. A new rep, depending on their own personal goals, should be on a solid draw for at least one year when just starting out in the industry. By the end of the first year, you should have solid monthly billing to sustain your monthly earning goals.
The most important thing is to be upfront and candid about what the new hire should expect as far as earnings go...realistically. If they come into the position with unreasonable earning expectations for the first year, they will most likely leave the position before they've reached their full potential.
You get what you pay for. A straight commission plan is not going to attract the brightest and the best...
When I first started I had a Draw against commission. For the first three months it was a non-payback draw or a guaranty. It was't much but enough to keep me going and motivated to make more. When I got into management I used a similar program. As a manager you can always review after 90 days and decide \if you need to extend. This way as a manager you will closely monitor the progress of the salesperson and make sure they are learning and advancing their skills. As a Director of Sales at ABC radio we had a guaranty for the first 3-4 months which was basically the same thing.
All of our sellers start out with a salary draw that they negotiate to get them through the first six months or so until their billing is high enough to actually survive on. No brand new seller is going to be able to learn your stations, products and internal software in enough time to turn over a large enough sale in their very first month to allow them to pay their rent, student loans, car payment, etc. A 100% commission policy for new sellers is a terrible policy. I don't know how a company would ever expect to be able to recruit and retain quality talent.
I am an older employee with a lot of work experience and started my radio sales job a year ago. My previous jobs have been as an administrator/secretary. When I started with the radio, I did receive a base salary in addition to commissions. I was also fortunate to have replaced a salesperson and given accounts to maintain. We are in a small market and my responsibility includes writing spots, help with production, and scheduling interviews of clients for added value in contracts. I always receive my base plus commission.
In this second year, I feel better about going out and selling. Our company schedules regular training with other sister stations. I was given a lot of training to begin my job as well as job shadowing.
If I didn't have my spouse's income with mine, I don't think I could have lived on what I was given, it would have been really tough. I hope the company that hired her was open about what to expect and that it takes so much time to build up a relationship with a client. It takes almost 10 visits to a new client before they really allow you to "sell" to them. She may need to have a conversation with them, if she really wants to make this work. I wasn't sure, but now I really have come to enjoy my job, relating to the clients and focusing on what they need to make their business work, not always what I need to sell in a given month. It's been a successful strategy for me.
When I was hired in 1995, they gave me a 3-month guarantee of $3000 per month. After three months,I wasn't quite making enough to cover the draw. The sales manager called me in and told me that he was extending it another month because he knew I was working hard and making progress. Frankly, I was pissed that I hadn't gotten over the hump, and I crossed the line the following month. Never looked back.
In my travels, I often hear that $3000-per-month figure still mentioned as the starting point for new reps. That wasn't much money in 1995, and it's a whole lot less 21 years later. I also often hear sales managers complain that it's impossible to hire good salespeople these days.
Go figure.
Sorry, William - didn't intend to discourage you! :>
The fact that the owner's background is in real estate, a commission-only business, makes his policy understandable if not defensible. Radio selling is different, and offering a livable salary to start (declining as commissions kick in), or accounts that are currently billing enough to give a new salesperson a leg-up, as some respondents have mentioned, would help stop the churn. Why set someone up for failure from the start? Does the individual no good and the station no good. Perhaps the owner should try to make a living under the same circumstances and conditions he's imposing on new salespeople; it might be a valuable object lesson. Thanks for weighing in!
Mine was less than that in 2013! But it was enough to scrape by, and certainly motivation to get my billing going.
I can remember, in the early 1970's, starting at $400/month plus 10% of my sales (paid on billing, not collections) - it wasn't a lot, but we managed to scrape by on it until I'd built up my account list. Sales training (Jim Williams) helped immensely. Still, business ebbed and flowed. Until 2006, when I resigned my position as sales manager and elected to stay on as a straight-commission salesperson (a decision I now regret not having made 10-15 years earlier!), my compensation was always a combination of salary and a percentage of sales, whether mine or the department's.
An Entry-Level Salesperson starting with a non-billing list gets a salary for one-year. We want him/her training, learning and prospecting; not worrying about how he/she is going to pay his/her own bills.
If we hire someone to take over an existing list, it depends on what the list is billing. We might go straight commission from day one or a combination for a specific period of time;
BUT...No Matter What...at the of a year..EVERYONE is on Straight Commission! Welcome to Radio Sales!
When I started, I moved from Radio Promotions Director into Sales. I was not given any accounts.
I started from bottom, which was good, but hard. I started on straight commission within 10 months. It was hard, but the company stood behind me as they felt I would make it and be a producer. I'm thankful I was able to prove them right!
Today, it's truly based on person. Sometimes it does take a while to get things moving, however, Sales Management can generally tell who will make it and who won't. The idea is to never let a sales person be so desperate they aren't making good decisions on the street while selling. It's hard, but typically if you make it a year, you can conquer anything. Our company recently implemented a Mentor program which can help the new ones hit the ground running quicker!
Most stations I have worked at allow 60 to 90 days to get up to speed. Especially if the station pays on collections it is important to have some sort of draw unless you are expected to work for free, to have something coming in while you build up your pipeline.How else does the new rep pay for gas and dry cleaning?
This relates a lot to your experience. If you bring the right experience, such as previous radio sales or previous successful sales or media sales experience...you should be able to get a draw or base salary for a period of time. If you were recruited from another field and the sales manager has a keen eye for finding talent...you should get a draw against commissions. In some cases...that could be a guarantee for a specified period of time and once a certain threshold or billing level is reaching....you flip to straight commission. Where I see problems is hiring a person with minimal experience and putting them on straight commission with no sales training. That usually does not work out very well. Some stations have used extensive radio sales training for the first few weeks before ever putting that person out on the street. That can work and if the training is done right....you can also use the training period to weed out those who do not appear to be working out. When I started, it was like Cortez burning his boats so his troops could not return to Spain. I was recruited from a media placement agency in Memphis to an AM/FM combo in Indianapolis (I have never ever been to Indiana). I sold my house, the station moved me and my family there. I then bought another house in Carmel, IN. So....I had to succeed. There was no turning back..I had made the committment. So, I worked Saturdays and nights calling on any retailer that would see me while my wife was selling the house in Memphis. It worked out really good for me...within 4 months I was the #1 biller and two months later I was GSM. I am not sure I would recommend that plan to everyone. But, knowing you HAVE TO SUCCEED is a great incentive.
So few people understand sales it is almost alarming. The first rule of sales is allow time for the business owner to get to know you and trust you. Until you have this, you have nothing. The best way to destroy your station's reputation is to force sales. In the dating world it is akin to 'hooking up' aka 'the one night stand'.
Any radio station really concerned with success realizes employees need to meet their bills through a paycheck. If you can't pay a wage that can do that, then why should they care. Some think no pay gets the person to sell. It in reality gets you a revolving door of the worst of the worst salespeople.
The only way to go is negotiate a salary that pays the bills and leaves them hungering to do better. That salary is a draw against collections. Every month it starts again. It might take up to a year to get past that draw consistently.
In my case, back in 1987, I was offered $750 a month...roughly what I could make in a no skill job working 40 hours a week. Gas and any office supplies were my problem. In 6 months we went to $1,000 and had a little breathing room. In a year I made it past my 20% on collections to exceed my $1,000 a month guarantee. By the end of two years I was easily at $8,000 and by year 4 closer to $10,000 a month. This was in a small market.
That wasn't a gravy salary or draw. I had to cover gas, office expenses, wear dress slacks, dress shirt and tie every day (no short sleeve shirts in summer) and I had to be a part of a couple of community organizations meaning I paid dues out of my pocket. I had a pager (provided) and was expected to be at my client's beckoned call. I had a client that liked to meet at 6 am. Another liked evenings. Business hours were whatever the client saw as best for them. I had to be at work by 8 and could not call it a day until 5:30. I had to make 15 calls a day, write commercial copy and produce at least 5 presentations a week. All of that for the 'right' to sell the product the station offered.
As a DJ for years, my wardrobe had an immediate change-over and my credit card made that happen.
In short, my guarantee each month paid the bills but gave me nothing extra, barely covering that minimum credit card payment. Going out to eat was too costly. When my car was in the shop, I had to rent a car to make calls, or find a vehicle to use and had to go on the card until after I was making well beyond my draw.
As for my practice, I spend at least a full day visiting a new salesperson's accounts with them. Otherwise they go out on their own to talk to clients. In lieu of 'thinking of everything' I take more of an observe and learn when visiting their clients with them.
I had a weekly sales meeting and an informal daily 'how's it going'. I had my folks create a notebook to maintain items we gleaned from various sources to help us sell and understand our competitors. I required a weekly plan of who and why. In my community 75 calls a week was possible. I required 5 written plans for clients and 5 cold calls a week you'd claim as a new account for your account list.
Every quarter or at least twice a year we have account shuffles. That was once we got too 'comfortable' with our list. I found sometimes personalities didn't mesh or new ideas weren't working, so a new face might be a better option. My rule was if they weren't on the air for at least 3 months (unless they were seasonal), the account could go to another person. I found this more useful than a burden. For me, a guy had struggled to get what I felt should have been a significant advertiser on the air. Moving to a new person, he was doing $750 a month in two weeks. Simply put, the old rep and the business owner didn't think the same way, so a new rep was able to show he was better in tune with the client.
Another thing I required was on a weekly basis, each sales person was assigned a media. If another station, they were to listen all week and write down the accounts they heard on the station as they were driving between calls. For print, we kept a list of accounts that used the daily paper. In other words, we know who was buying what and about what they spent.
The weekly sales meeting included brainstorming ideas for accounts and potential accounts. We didn't just sell commercials but marketing plans.
My big rule: yes we have packages but every client gets a customized plan based on notes you took from conversations you had with the client. Every part of the presentation was adapted for a need, concern or whatever that the business owner spoke of. That separated us from the others...no generic packages but personalized plans always.
I told my staff to make management decisions, to think on their own. I suggested they'd make a mistake here or there but they would not be punished for acting in good faith but rather learn what might be a better solution. They held this freedom by the philosophy of my high school government teacher: to enjoy complete freedom you must never exercise it to its fullest extent.
Toni, you're right and being realistic. You are going to have to do something else to supplement your radio sales job income. That's that! The reality is the big dollar accounts are likely already with the senior reps in that station.I did manage to squeeze in some decent accounts, but it took awhile. It takes time to close new business, so what do you do in the meantime to bring in money to pay the mortgage, electric bill, have money for auto maintenance, etc? The company I worked for was great. Great managers and staff! I'm still there on a Temp Basis. I was on the programming side when a restructuring occurred and the former sales manager left. I was given the opportunity to handle the sales for that particular station. So I had the base pay plus commissions. You're not going to make a lot of money selling low dollar $15, $20, units. It's gotta be the big bucks; the $70, $80 units and up for you to see a real commission check. Will they allow you to have agency accounts? I recommend a good basic sales course too. The RAB manual was helpful, but tap into the great sales coaches like Pam Lonto's Streetwise Radio Selling, Steve Clark's Super Selling and everything you can to improve your tele-selling skills which, I like Art Sobczak's Smart Calling. These will help you gain a good selling skills foundation and insight. Sales is a rewarding profession. But you've gotta pay the bills so you can enjoy the job and stay focused.
