Good morning, Steve,
I believe in my SFS seminar three years ago you stated that you paid per hour but also gave your techs a commission for any add-ons and up-selling that they did. So how is that any different in terms of avoiding pressuring the client because your techs wanted to make more money, than by paying straight commission and no hourly wage? I would think techs will want to make more money anyway so the inclination to “pressure sell” will also be there with an hourly rate plus commission for up selling. I see the same risk either way…. Enlighten me.
Mulling It Over in Richmond, VA
Dear Mulling,
A good question. First, Value Added Service firmly rejects any kind of high pressure selling to the customer while they are ‘trapped” in their home. No matter what short-term gain you or your tech make in the “up-sell” you will lose the client long term and that is so very stupid. So no matter how you structure your pay model have a very firm policy against high-pressure selling. Instead, train your people how to do “no-pressure up-selling”. So why didn’t I go straight commission?
The biggest reason I paid a base salary instead of straight commission is I wanted the flexibility to send people where they were needed without the constant bickering over pay and commissions. Questions like, “Steve, how come I have to go wash walls at the fire loss while Bill get’s to go make commission?” get real old. With multiple employees you will never totally get rid of the petty jealousies and rivalries but by paying everyone a decent living base pay at least they were all on an even footing.
Now Mulling, since I believe your company doesn’t do restoration (even though I still think you should seriously look at water damage!) this issue may not be as important. However, even so with commission-only something as simple as asking an employee to detail the truck or clean the shop becomes, “So what is my commission going to be on this?” Aaargh! Something to think about …
Steve
P.S. At the end of the day, it all depends on your business model/goals. For example, if my business had been located in a big metropolitan market and I could have dedicated employees to only one business sector (such as banging out apartment move-outs!) I probably would have paid these techs on commission. But due to our small market my employees sometimes had to “wear many hats” in the course of just one day. After all, if you are going to build a 1.3 million dollar business in a market base of 30,000 people (see how I did it) you better be flexible!
Steve,
How timely, as we were just facing this same scenario. I get your point about avoiding the jealousy and it’s true that we, like “Mulling” don’t have a restoration side (yet!). We ultimately did decide to go wtih a straight comission. Currently our new tech is on the truck wtih John and get’s a % of the sales for the week. Wtih only one tech and John, we don’t have this problem, but can see how we may need to re-evaluate this structure as we grow and add additional employees and trucks.
Lots of great things happening here at Burdick’s Cleaning. I’ll send you a dispatch soon so you can do another installment of “Meg’s Story”.
Meg
“I’ll send you a dispatch soon so you can do another installment of “Meg’s Story”.”
We’ll be waiting, Meg. I’m going to be interested in how you are going to pry John out of the truck! I know how close he is to his customers. Remind him that at some point staying on the truck and pushing a wand becomes a “Displacement Activity” if you are trying to grow your company. Always be asking “What is my highest and best use?” 🙂
Steve
PS So Meg, do you have John training with a “Fast Track Training” system? Having something in writing each day to review with the tech knowing that he or she will be accountable with a test at the end of the day does wonders for their attention span! Plus remember that you don’t want John training the next employee. So why not get your Infrastructure in order now?
Actually, I DID pull out the fast track stuff. Since our processes are a bit different I do need to tweak them so we didn’t actually use them yet.
Our new employee is sharp and used to have his own cleaning company. So in tune in fact, he already said what I kind of knew – John will never be happy if he is off the truck. He just loves it too much and thrives on the interaction with his customers and the sense of accomplishment he gets from doing the job. He’s going to try to step back and pursue more marketing (relationship building, face to face and referral), commerical estimating etc. We are open to the fact that it just might not be his nitch or a good fit for him and staying hands on may be the place for him. Then I’ll be the one out doing those things and we’ll be finding someone else to do the admin stuff I’ve been doing.
As for now, we did still need someone on the truck helping John (he is aging a bit and has some past injuries that have slowed him down). We’ll see how things go and remain flexible with his role and mine with consideration to our respective strengths.
“John will never be happy if he is off the truck. He just loves it too much and thrives on the interaction with his customers and the sense of accomplishment he gets from doing the job.”
I KNEW IT! BUT as you say, John isn’t as young as he once was. (Don’t tell him I said this!) But hey, what a great business that let’s you flit back and forth between the two options!
Keep me posted with a nice long e-mailed “dispatch” when you can, Meg.
Steve