One of the most critical factors that can make the difference between an average sales center coordinator and a great one is the design of a fair and motivating compensation plan. Regardless of the scope of the sales center coordinator's duties-whether he or she is simply calling for X-dates, setting appointments, or managing an entire database of prospects-an effective compensation plan is an instrumental motivational tool. When designing a compensation plan, however, there are certain guidelines to follow and some common pitfalls to avoid.
First, be sure to develop and formalize a job description for the position, including duties. Then determine how much the job should pay. The amount paid varies from agency to agency so it is best to ascertain what makes sense for your operation. Keep in mind that this is not a salary-it is simply a dollar amount that an employee should be able to earn if he or she is performing satisfactorily.
The next step is to develop the means by which an employee can earn this amount of money for successfully performing his or her specific duties. Result-driven bonus structures should be implemented as part of the compensation strategy to encourage the employee to operate at an optimum level.
One of the easiest ways to determine an incentive-oriented compensation plan is to create a pie graph representing a typical eight-hour day. Each activity assigned to the sales center coordinator should be represented by a portion of the pie. Assume that the same graph also represents the salary amount created with the job description. Then assign values to each of the duties and create the compensation plan.
Consider three key components when creating an effective and motivational compensation plan: a base salary, an incremental pay structure based on production and quality of work, and a bonus level of pay for performance over and above what is normally expected. Since the desired pay level is already established, the next step is to determine how much of the salary each activity is worth.
Divide the tasks into two separate categories, one to represent routine activities such as filing, mailing, letter-writing, and database management, and the other to identify production-based activities that directly or indirectly affect revenue. These activities would include X-dating, appointment-setting to conduct fact-finding surveys, and cross-selling.
List all of the routine activities and the percentages associated with each from the pie graph, as in the sample. Multiplying the sum of these percentages by the desired monthly salary will equal the monthly base pay for this position. The remaining income must be directly related to the employee's performance in the production-based activities, with set minimums.
View each activity in progression-prospecting leads to X-dates, calling on these leads to appointments, and transforming the appointments-and compensate each phase in the process incrementally. For the sales center coordinator's compensation, focus more attention on the appointments and X-dating and less on sales. Although new sales are the ultimate goal, the coordinator has no control over the markets or the producer's ability to sell. New sales are best rewarded as bonus pay for the coordinator.
The ultimate goal for the sales center coordinator is to generate as many top-quality X-dates and appointments as possible. Determine how many X-dates and appointments the coordinator should generate in a month and set up the compensation so that peak production will pay the coordinator the full potential of the pay structure. Keep in mind that the pay rate for appointments should be greater than that for X-dates, since appointments are one step closer to increasing revenue; ensure that the coordinator is generating good leads during the initial cold calls. If the pay rate for X-dates is X, then the pay rate for appointments should be 2X.
Divide the monthly production-based pay by the number of X-dates generated in a month plus twice the number of appointments generated in a month. This figure is what the sales center coordinator should earn per X-date-and half of what he or she should earn per appointment. Assume that the coordinator earns $750 (as in the sample pie graph) for optimum X-date and appointment production and generates 150 X-dates and 25 appointments per month. Using the formula we outlined, divide $750 by 150 + 50 (the number of X-dates plus twice the number of appointments) to get $3.75 ($750 divided by 200). Under this scenario, the coordinator earns $3.75 for every X-date and $7.50 for every survey appointment generated.
8 hours
A = X-dating and prospecting (2 hours)
B = Appointment setting (1 hour)
C = Meetings, clerical, miscellaneous (1 hour)
D = Database management (3 hours)
E = Training, reading trades (1 hour)
$2,000 per month
C + D + E = 62.5% X $2,000 = $1,250 (monthly base salary)
Production based pay = $750
X-dates = 150
Appointments = 25
150 + 2(25) = 200
$750 divided by 200 = $3.75
X-dates = $3.75 / Appointments = $7.50