Subject: Feedback on Our 17.5% Commission Package
Hello everyone,
We’re a relatively new startup and are excited to start bringing on consultants as our financial situation improves.
We’re considering offering a competitive commission package of 17.5%, with potential increases for significantly higher billings, in order to attract and retain talent. The average commission in our industry hovers around 12% to 15%, and we want to stand out from the competition.
I would love to hear from other business owners or managers—do you foresee any major drawbacks with this kind of commission structure, aside from possibly lower profits for the company?
Your thoughts and insights would be greatly appreciated!
RCadmin
Hi there!
It’s great to hear that your startup is in a good place financially and is ready to bring in consultants. Offering a commission package of 17.5% does sound like an attractive incentive to draw in top talent, particularly if it’s higher than the market average. Here are some thoughts on your proposal:
Attracting Talent: The higher commission rate could indeed help you attract more experienced consultants who may be drawn by the promise of greater earning potential. It can also help you stand out in a competitive market.
Performance-Based Culture: A generous commission structure can foster a performance-driven culture where consultants are motivated to bring in higher billings, which could ultimately contribute to your overall revenue growth.
Retention: If you continue to increase the commission with higher billings, it can serve as a strong retention strategy, encouraging consultants to stay with your company longer as they grow their client base and income.
Sustainability: As you mentioned, one concern would be the impact on company profits. Ensure that you have a solid financial model to support this commission structure, especially as the business scales. It can be helpful to run projections to understand how much of an impact this could have on your bottom line.
Assessment of Performance Metrics: Consider how you will measure billings and performance to ensure that the commission structure aligns with your business goals. You want to make sure consultants are incentivized not just to close deals, but to bring in long-term clients.
Potential for ‘Commission-Driven’ Decisions: Be cautious of consultants focusing solely on short-term gains. Make sure your commission package encourages behaviors that align with your company values and long-term goals.
Market Adjustments: Keep an eye on the market. If competitors start to offer similar or higher rates due to your initial offer, you may need to adjust your package to retain talent without compromising profitability.
Overall, if managed well, a 17.5% commission package can be a strong differentiator for your startup. Just ensure you have clear performance metrics and financial oversight to make it sustainable. Good luck with your growth!
Best,
[Your Name]