By Angela Betasso, President, and Jim Stoos, Senior Marketing Consultant. We don’t believe anyone could have foreseen what is happening now, when putting together 2020 budgets and plans last year. And yet, as unpredictable as it is right now, there are a few things that we can count on happening as we move forward. First, we will get through this, you can count on that. Some of us lived through selling advertising post 9/11, where not a single commercial aired for almost two weeks. More of us lived through selling advertising in 2008-2009’s recession. In both cases, we found our way while helping our community, company, and advertisers find their way through it too. Second, we will innovate. Oftentimes there is good that comes from dealing with difficult situations. And, we know great innovation and inspiration occurs during tough economic times. We fall, we learn, we adapt, we diversify our revenue streams, and we keep moving forward. Think of how your own company has innovated and adapted in just this last week. The third thing we can count on—companies who retain their key talent have the best chance of surviving and recovering quickly out of this downturn. Which makes us think about our Account Executives. Most are paid against some variation of commission, draw, and bonus, and about ½ of our sales force came into our business in the last decade, meaning ½ did not sell advertising in 2008/2009, let alone 2001. We know successful sales folks are used to navigating the risk-reward balance of being on commission and not straight salary like so many other jobs. Yet, with ½ our sales force being relatively new, and the other ½ sharing concerns around how this disruption is different, we worry about our industry retaining the best and brightest. We wonder if the risk is significantly outweighing the reward of being an AE in our industry at this time. Many, if not most, companies that JDA works with have addressed this AE compensation dilemma or are in the process of addressing it. As you think through your own approach, we hope some of the following thoughts spur you on.
- There is no wrong way to build a short-term safety net
- Let the team know you are working on it
- If considering a “base or minimum” guarantee, using the Family Medical Leave Act (FMLA) calculations may be a good place to start in running out math scenarios
- In reviewing AE compensation averages, use whatever time range you feel appropriate (last 3 months, 6 months, 1 year)
- Building in options can be seen as thoughtful—AE gets the “base/minimum” amount or their “normal commission,” whichever is higher that month
- Increase commission rates, consider even boosting % against business retained
- Create bonus pools, possibly against new revenue goals
- Clarify length of time any changes will be in effect (while knowing you may extend if needed)
Finally, we encourage not worrying about propping up an underperformer who “doesn’t deserve” a safety net for the time being. Instead, focus on your core group—the ones you can count on every day. What do you think they would like you to do right now? How do you think they feel? In many cases, the top seller on the staff is also the top spender at home, so they always need more money. You’re not letting the underperformer off the hook—they’re not getting away with anything—you’re just doing what’s right at a crucial time. Whatever choice you make, making a statement to your revenue generators that their personal well-being matters, is a good one. A well-thought-out “COVID commission adjustment plan” that lowers the anxiety of your key folks, while hopefully adding years of loyalty and gratitude, might be just what is needed. Good luck and good selling.
We’re having lots of conversations with senior leaders about subjects like this. If we can be a sounding board for you or your company during this time, please reach out. firstname.lastname@example.org and email@example.com