Commission that doesn't work

[kittikit]

Hi all,
i just wanted to share with you what happened to me when i changed the commission structure at the salon, I am also curious about what you think and anyone who has a better way of doing this - that works!

So, employed a new staff member at the beginning of the year with a starter salary of £10 per hour (doing 42.5hrs per week) Im based in SW London
Our commission structure was the following:

• 17% retail commission £200 target
• 10% service comm - % target after worked hours
• 5% of the value of the total packages sold (course of treatments)
• £100 after each "high value " Package sold.

New employee commission was £178 in the second month.

I felt that this commission structure wasnt working as i imagined so i came up with a new one:

• 3% retail commission NO target
• 3% service comm -NO target
• 3% of the value of the total packages sold (course of treatments)
• 5% after each "high value " Package sold.

I thought that a clever person will think, okay i have no target to hit, so the more money a bring into the business by upgrading clients to the more expensive treatments that still suits them and what they are after - will make more bonus for myself.
But this didnt happen - the bonuses in the past 2 moths were almost the same: £180 and £220.

Sadly, i do not see them using this system to the fullest, while they are getting paid after each service as a form of commission.
you would think that if there is a facial £75 - which will mean £12.25 for the hour pay - they will want to do it, but no - this is not the case.

So all in all, this commission structure DOES NOT WORK!

Currently im not in a great position where if i change this, to a target based - which in my opinion would work better - will not be taken easily.

The reason why i went with the no target commission was because i was unable to offer more than £10ph for the therapists. ATM the hourly rate with commission looks like: £10.70, £11.00 £11.35
So in fact these numbers show that the pay is higher than £10

What do you all think? does commission work at all? or as a therapist would you be happier just with your higher hourly rate ?

Interesting topic, especially when you take into count that not all is motivated by money.

Thanks x

 

[Bettyboobumpkin]

I think it depends a lot on your therapists. I have a structure similar to this and my staff who are money motivated really work hard to hit their targets on treatments and maximize their retail commission 10% each month. The ones who aren't just don't seem very interested and act as if the targets aren't realistic, although they can clearly see the other girls hitting it. I'm stuck on what to do too?

 

[Bettyboobumpkin]

I think it depends a lot on your therapists. I have a structure similar to this and my staff who are money motivated really work hard to hit their targets on treatments and maximize their retail commission 10% each month. The ones who aren't just don't seem very interested and act as if the targets aren't realistic, although they can clearly see the other girls hitting it. I'm stuck on what to do too?

also if they don't hit their target they are on set hourly rate but if they do hit it they move up to £10 then £11 per hour

 

[salonfrog]

Hi

I think you’re right: that there will always be people who are not money motivated and just happy to turn up each day and do their basic job; and for those, no matter how you put together a commission scheme, it will have little effect.

However, there maybe other factors.

Some people are just not ‘sellers’ and even if they would like the commission, are not comfortable up-selling. They just see it as being pushy?

Some ideas then:

·Speak to the staff who don’t seem motivated by commission individually and find out why its not working for them. Are they just not interested, or do they feel uncomfortable selling, or is it something else?

·Consider some training in selling – give staff confidence in doing this stuff (either getting a trainer in, or get the ones who are good at it to explain how they up-sell, or give guidance yourself)

·Keep the commission scheme really simple, so its really easy to understand

·Think about a possible non-cash comission e.g. seller of the month gets to leave 2 hours early one day, gets tickets to a show, or whatever you think may work?

·Decide on a single, promotion idea for the week (or the month). E.g. Have a staff meeting. Let them know that this week, we want to push X treatment. Go through some suggesed ways to promote this particular treatment to their Clients. Go through the treatment with them, explaining what it does, how it benefits their Clients etc etc. This approach can also harvest a Team feeling – in that we’re all trying to get the business bigger and better?

If it's easier, have flyers printed that staff can give to their clients with maybe 2 or 3 treatments on. Works well if staff just aren't good at direct selling.

Anyway, just some things that may be worth thinking about.

 

[AcidPerm]

Definitely find out what incentives your therapists prefer and offer a choice of say, extra cash, time off in lieu or free treatments to the value of ££ or whatever works for you and them.

 

[Bettyboobumpkin]

Hi

I think you’re right: that there will always be people who are not money motivated and just happy to turn up each day and do their basic job; and for those, no matter how you put together a commission scheme, it will have little effect.

However, there maybe other factors.

Some people are just not ‘sellers’ and even if they would like the commission, are not comfortable up-selling. They just see it as being pushy?

Some ideas then:

·Speak to the staff who don’t seem motivated by commission individually and find out why its not working for them. Are they just not interested, or do they feel uncomfortable selling, or is it something else?

·Consider some training in selling – give staff confidence in doing this stuff (either getting a trainer in, or get the ones who are good at it to explain how they up-sell, or give guidance yourself)

·Keep the commission scheme really simple, so its really easy to understand

·Think about a possible non-cash comission e.g. seller of the month gets to leave 2 hours early one day, gets tickets to a show, or whatever you think may work?

·Decide on a single, promotion idea for the week (or the month). E.g. Have a staff meeting. Let them know that this week, we want to push X treatment. Go through some suggesed ways to promote this particular treatment to their Clients. Go through the treatment with them, explaining what it does, how it benefits their Clients etc etc. This approach can also harvest a Team feeling – in that we’re all trying to get the business bigger and better?

If it's easier, have flyers printed that staff can give to their clients with maybe 2 or 3 treatments on. Works well if staff just aren't good at direct selling.

Anyway, just some things that may be worth thinking about.

Hi,Thanks for the advice. There are some ideas here that I haven't tried before that I will try. We get so busy during the summer, the planning goes out of the window but I need to get back to on it.

 

[laurakate]

Product training in exchange for commission. That would motivate some people.

Some employers are keen to provide product training as soon as you start whereas in a salon with a wide range of treatments, the chance to upskill can be motivating.