Friday Poll: How Much Should a New Salesperson Be Paid?

    • 993 posts
    July 5, 2018 9:48 PM PDT

    In the June 19th issue of RadioINK, EVP/Publisher Deborah Parenti's piece entitled Getting What We Pay For, lays the blame for radio's "dismal track record of keeping young potential super sellers from bolting out the door" at the feet of owners and managers who fail to compensate new salespeople adequately.

    "The bottom line is that by and large, radio stations and groups are not willing to compensate new sellers with a living - and I mean living, not lavish - wage. Someone, somewhere, is not doing the math. No one can afford modest housing, insurance, gas, and car maintenance, not to mention food, clothing, utilities, and other ordinary and basic living expenses on what the industry typically pays to new sellers - not unless they have some outside support or a working spouse, partner, or roommate. And along with regular expenses, sellers are more likely than others to have additional needs to consider such as more gas, parking, and more wear and tear on their cars."

    Parenti points out that it's difficult to train new salespeople to focus on developing sustainable long-term relationships with advertisers when they're worried about covering their bills at the end of the month, leading them to present "packages that don't fill client marketing goals or maintain rate integrity, but chase the fast buck, accepting buys that probably won't net results - or grow a long-term client."

    It takes time, at least a year, for a brand new salesperson to learn the basics, to become competent in both sales and advertising. Yet starting salaries and draws often seem to expect that the new salesperson will be paying his way in a matter of just two or three months.

    What was your experience as a new salesperson? Did you thrive...or barely survive?

    Should the employer be prepared to absorb a loss for up to a year, while the new salesperson gets up to speed? How should a manager balance the needs of the salesperson and the needs of the company?

    That's the background for this week's Friday Poll Question: How Much Should a New Salesperson Be Paid During their First Year in Radio Sales? 

    Please post your thoughts in the Reply section below. We're looking forward to hearing from you on this important topic. 


    This post was edited by Rod Schwartz at July 9, 2018 9:09 AM PDT
    • 49 posts
    July 6, 2018 5:46 AM PDT

    We have had new sales staff that were paid an hourly wage and given the opportunity to earn up to 20 percent commission which would have been a nice living. But they always fail. We had one girl that worked one maybe two days and we never heard from her again. 

    I think the workforce in general now (below 30) are going to end up living in someone's basement drawing unemployment every six months or on disability.

    If I could get a few 40 or 50-something experienced men and women out in the field, I think we would be better off.  

    • 3 posts
    July 6, 2018 7:43 AM PDT

    The failure of new account execs, because so many of them have failed for us, means that we cannot continue to do the same thing we were doing 20 years ago and expect it to work. It's really our own failure. We spend way too little time teaching and underfunding people who do have skills. Personally, for someone who doesn't get radio, I think it takes a good two years to become competent and successful. And it's not with the management package of the week push. In Japan, if you train to be a teacher, you have to work in a classroom with a tenured teacher for five years, before you are considered for a class of your own.

    • 84 posts
    July 6, 2018 8:29 AM PDT

    I've watched many come and go... it seems to me that the lack of training is the #1 reason for failure.

    When I started in radio... I was handed a stack of cassettes (those were things before CD's.... CD's were before.... nevermind) I was locked in a room for a week listening to many of the great sales trainers... then I was quizzed over and over about things that I may experience "on the street"... after that I followed a salesperson around for a few days... then I went out and messed up on my own. I stuck with it because I wanted to be successful. I had many job offers along the way... some that were too good to say NO to... so I left radio to sell cars... I made 4 times more money, but hated my job. 
    I'm really glad I came back a month or two later and have stuck with this industry for the last 25 years or so. 

    One thing we have considered doing.... instead of HIRING a sales person.... find someone who wants to work for themselves.... run ads about a business opportunity with low overhead and high commissions on collections. The perfect business for a very detailed oriented sales type. Then have them as a 1099 instead of a W2.

    My wife and I have not actually DONE this... but I've tried to convince her that it would work... so... if you do it... let me know if I was right. If she was right... let's keep it a secret!  ;-)

    John Small
    SunnyRadio.com
    RadioReallyWorks.com
    BetterResultsAdvertising.com
    CloudcastRadio.com


    This post was edited by Big John Small at July 6, 2018 8:30 AM PDT
    • 14 posts
    July 6, 2018 8:41 AM PDT

    We have tried hourly, salary, draw, commission only, and those under 30 years old just do not want to work. They want to get paid, but they do not want to work for it. Nor do they want to show up on time every day, keep appointments, or return from lunch on time. One of the biggest tech problems over the last ten years with the "under 30" crowd has been to get them to put their phone away for just 30 minutes while at the station. They just can't do it, they would rather quit. And they do.

    • 118 posts
    July 6, 2018 9:05 AM PDT

    I think the big question is: if you were looking for work as a salesman, would you take your offer or move on to something else? 

    I started in sales full time in 1987 at $750 a month draw where I paid all my expenses. It worked out to less than minimum wage. I could work fewer hours and make the same flipping burgers for that first year. I qualified for food stamps. I had no choice. It was the only job available in radio in that town at the time and I didn't have the cash to move to a new town. I went from jock to sales.

    Fortunately I was given an account list that contained businesses that had done business with the station in the past. That really helped. Most had been personal friends of the prior salesperson. None were big accounts. My boss had to keep the big spenders to justify his paycheck. Mine would spend $150 to $200 a month and I'd get 20% on collections after I met my draw. Of the nearly 40 on the list, I needed $3,750 in collections to equal my draw. I needed $5,500 to survive. I needed $6,000 to equal my prior DJ job plus more sales to cover my gas and other expenses.

    In the beginning my training was "go out and visit these people on your list every week". I asked what to say to these folks I visited and I was told to work for their continued success and not to worry about the order, that my success would come by helping my clients continue their success. That comment really helped me move my mental image from the stereotypical salesperson to a true salesperson. But it didn't pay off quickly but rather started an investment in building relationships. Luckily I could understand that. Being on air I 'got' selling 'air' not an object that sold itself. You create from nothing and sell it.

    After 6 months, the two of us hired at the time, told our boss we could work less flipping burgers and earn the same pay without all the responsibility. Our monthly draw was raised to $1,000. That meant my parents-in-law were no longer buying our groceries.

    At the end of the first year I finally had my first month where collections topped my draw by a few dollars, maybe $10. By the end of year two I was up to about $1,500 a month. By year 5 I was around $2,000 most months. By then I was acting more like an advertising agency for several clients planning all their advertising.

    After my Dad learned what I was making he sent me a job offer for a sales rep for the company he worked for: health insurance, matching retirement, reimbursement of expenses and a starting pay of $1,400 plus commission. That was in 1987. Compared to $750 a month and nothing, I was really tempted. And they'd even move me at their expense.

    If any circumstance was different, I would have never accepted the job.

    Reality: the best salespeople are already making good money elsewhere and you can't afford them. Mostly you have to find the person with the right personality and hope they make a successful salesperson with your guidance. Few will make it because this is a long shot in every sense of the word. If you find that gem, you need to be prepared to keep them by paying a living wage and guiding them, imparting knowledge including going on calls they make so they can see how it is done. And cover their expenses. 

    From somebody that was there: you never feel so desperate doing sales when you don't know where your next meal is coming from. I actually think clients can see that desperation in you. I noticed clients buy when you really don't need that sale today. I guess they can read that too, perhaps by the confidence you seem to have knowing a no won't break you.

    Radio has made it in spite of itself. Way too many stations pay horrible starting pay, offer little training and expect success. Before you offer that job to that 'newbie', ask yourself if you'd take the job and how dedicated you'd be with the compensation package. If you can't keep salespeople, maybe you're making poor choices or maybe the odds of success are so stacked against them they had no chance in the first place.

    Actually happened: Had a $300 order from a client 15 miles away but no money for gas. It was a client that was so busy you have to be in his office by a certain time to get the order. I found a way but I should not have been diverted a couple of hours begging people for a dollar or two to go get the order.

    I'm glad I did it. It made me believe in myself and gave me the power to know I could control my destiny. I'm a better person overall because of my experience. Still, I would never do it again. I would rather take a job I'd hate. Why? At least I could walk away from the job I hate at quitting time. In radio sales, you're never off work. You see clients everywhere you go in a small town.  And the job is not about labor but takes everything that you are and judges you in dollars you need. You don't feel good at 7 pm on Monday after a day of 'no' and seeing the good guy not win or seeing hard work and dedication not pay off. You have to learn to be strong and ready for battle on Tuesday so you work up a battle plan and think a whole lot about those clients.

    • 993 posts
    July 7, 2018 12:47 PM PDT

    From Roger Utnehmer The most valuable resource a radio station has is its sales staff. Without sales we’re out of the game. Sales supports everything else. Our most serious challenge is attracting and keeping sales reps. When they qualify for commodity cheese and food stamps we doom ourselves to failure. Jim Williams said thirty years ago that radio is better over-paying sales reps than under-paying. When you pay a bit too much, management invests time in training, nurturing, encouraging and leading. The guideline I’ve used for more than 40 years of small market ownership is to pay sales reps what a teacher in the school districts makes as a base, then train them to make much more. We are very proud to have sales reps in a market so small clients believe Dunn and Bradstreet is an intersection who make more than $10,000 a month...and their starting base is comparable to a local school teacher with an income cap imposed by their salary scale.

    • 993 posts
    July 7, 2018 12:48 PM PDT

    From Michelle OBrienI pay my salespeople with a base, plus commissions that are based on collections. Additionally they get bonuses for long term contracts, increases in rate and for making their own and the station sales budget. This has worked well, and has resulted in a stable sales force, as well as longer client contracts and hitting budget.