Commission/Collections

Replies to This Discussion

Permalink Reply by Joel A. Swanson on August 20, 2009 at 9:19am

Our Salespeople receive commssion on collections. At 90 days, the advertiser is taken off the air (unless the salesperson has a signed payment schedule);and the Business Manager and Sales Manager get involved to whatever extent they feel is necessary (phone calls/fax/email/personal visit. At 120 days, the salesperson loses the commission and the account. I order for the account to get back on the air, the past due amount must be paid in full and future advertising paid in advance for an agreed-upon time.

It is important that the salespeople understand that their account list belongs to the radio station, and they will be held accountable for the sales and collections pertaining to that list.

And; YES; we are that strict with agencies too.

Permalink Reply by jan liverman on August 20, 2009 at 11:29am

Hi Joel:

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

Permalink Reply by Valeria Bongard on August 20, 2009 at 11:37am

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.

Permalink Reply by Bryan Creed Marriott on August 20, 2009 at 11:58am

Alright, I'm not trying to post a shameless plug, but our company P1 just recorded a segment on collections. This is a 12 minute video on collections for the broadcast industry. If you click the link below, feel free to watch. I can only keep the demo link available for a week or two. Take a glance, it should help answer your post.

http://p1selling.com/demo/course.aspx?cid=G%2feiSbFx2W4%3d

If you interested in any more topics, check out our site at www.p1selling.com/demo

Permalink Reply by Hal Widsten on August 20, 2009 at 12:03pm

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.

Permalink Reply by jan liverman on August 20, 2009 at 12:50pm

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.

Permalink Reply by Mark A. Waddington on August 21, 2009 at 10:48am

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.

Permalink Reply by Joel A. Swanson on August 26, 2009 at 10:23am

We don't pay our salespeople until the Sale is Complete; and the sale is not complete UNTIL the money is in the Radio Station's Bank!

To do it any other way is simply NOT good business policy.

Permalink Reply by jan liverman on August 28, 2009 at 11:12am

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.

Permalink Reply by Rebecca Schwartz on August 24, 2009 at 9:36am

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

Permalink Reply by Chris Rolando on August 26, 2009 at 2:30pm

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.

Permalink Reply by Joel A. Swanson on August 28, 2009 at 7:05am

I don't mean t be a smart _ _ s; but then I am in Radio; and I was trained by Jim WIlliams, so...

I have never tried to pay my bills with "sales"; does it work?

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