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I am a marketing professional with over 10 years of successful experience. My specialty area is strategic thinking/planning.

Recently a local company in its first year of operation asked if I would consider coming on board as an independent marketing/sales representative. The territory would be rather large and would require much face to face interaction, increased exposure to targets between visits, etc. I basically would be handling their entire marketing for them on a part time basis.

They offered me 4% commission on gross profits from service jobs secured by me and a marketing budget of $1000 per month. However, they aren't wanting to pay me for current customers or their repeat business although I will call on them!

They also want to simply ask the person calling in the job how they heard about them and base my commission on that. Although I would love to track that data for my own knowledge, I know from experience that this method isn't always reliable for several reasons.

If I am going to mass market as well as make personal visits to develop new customers and sustain current customers, I feel I should get commission on any referral source in which I have provided exposure or sales call for the company. Average jobs can range from 1,000-200,000+. Since 4% is a very low commission, I have to ensure I'm not working for free! I have never done consulting work before and would love your input.

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1 Answer

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Right people could deliver bad result by wrong scheme.

I think there are many problems in your story, either for you or for the company.

The Premises

I assume these premises according to your description.

  1. The selling process is not very short and simple. There are several stages in the funnel such as advertising(mass marketing as you said), visiting, securing deal etc.

  2. Clients have long life cycle and their loyalty values. Old clients still need to be visited, the relationship need to be maintained. There are lots of works to do.

The Problems

  1. Lack of responsibility breakdown. The company has no idea what market/sales activities they need to do, and what activities could bring results.

  2. For company: Payout by pure commission is a bad idea for complex activities as described in premises. This will end with short-term activities and disloyal employees, and then loss of business.

  3. For you: The method of differentiating clients from source is totally unacceptable. There is no guarantee your efforts will be right tracked. Besides, it is not a good practice if you don't involve in later processes such as securing the deal, and sign contract.

  4. For company: The old clients are neglected. You are in charge of entire marketing but no one is responsible to care them. The cost to acquire new clients are much higher than maintaining old ones. The company leaves most of their money on the table.

My Suggestions

  1. Define the needed activities and the process seriously together. Being an expert for 10 years, you should be able to do that.

  2. Reject the pure commission plan and negotiate a new one according to above #1 point.

    • Other possibilities including fixed salary, company goal bonus, share(vesting).
    • If more work needed than pure selling, you need more options than commission.
    • You need to have a right expectation of possible income vs your market value.

  3. For commissions, you need a better measurement. Still, this depends on the definitions in #1.

Hope these helps.

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