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Thread: Commission & Salary structures

  1. #31
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    Quote Originally Posted by Tfreestyle View Post
    If I am charged back my reps will get triple their commission chargeback to deter making bad sales/choices. In addition we have set goals per month for the store overall with tiered bonuses that range from $50 up to $300 more a month but the $300 isnt really attainable but sure does look good posted up on the wall and I wish they would hit that number, id be more then happy to pay it out.
    Thanks for sharing the information on your commissions.

    So you are fining your reps for their cb's over and above their original commissions? (CB sure, but triple CB?!? How would you like it if VZW triple CBed you?) And posting bonus levels on the wall merely for appearances? Apart from doing this at all, what is so disturbing is that you appear quite comfortable admitting it. WTH is wrong with this industry?

    In almost any other industry this would be preposterous. When I was running a construction company, I would not dream of charging back a carpenter for miscutting a board, let alone triple charging him for the wasted materials. If you cut enough boards or do anything enough times, mistakes are going to happen, lol.

  2. #32
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    What he said.
    Quote Originally Posted by Downtown View Post
    Thanks for sharing the information on your commissions.

    So you are fining your reps for their cb's over and above their original commissions? (CB sure, but triple CB?!? How would you like it if VZW triple CBed you?) And posting bonus levels on the wall merely for appearances? Apart from doing this at all, what is so disturbing is that you appear quite comfortable admitting it. WTH is wrong with this industry?

    In almost any other industry this would be preposterous. When I was running a construction company, I would not dream of charging back a carpenter for miscutting a board, let alone triple charging him for the wasted materials. If you cut enough boards or do anything enough times, mistakes are going to happen, lol.

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    What would a rep have to lose if a sale was questionable if he would only lose as much as he was making on the sale? In the last month alone 1 rep made 2 very bad sales, each was 3 new lines so a total of SIX iphone 5 chargebacks, I personally lost $2800, rep lost $48, come on. There has to be something in place where they take discretion and have consequences for not making good decisions and to prevent fraud. You have to be kidding me if you think any rep wont make a sale that seems shady if he has nothing to personally lose, they are just going to process the new line/upgrade and cross their fingers they keep their $10-$20 when the owners are on the hook 500-1000.



    I have 4 bonuses posted, the first 2 attainable if they are doing their jobs and if they cant get the first bonus something is going wrong. A good month would be the 3rd bonus and if we have an amazing month they can hit the highest 4th bonus which they almost hit back in january so its not completely out of the question. Why would someone not put a really high bonus so the employees have something to strive for? also if they hit the 3rd bonus they dont have anything to look forward too and to keep the good sales going.

    I dont see how both of you would criticize this if you own your own store and you have to swallow $3000 chargebacks which is only a few iphones into todays commissions.

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    Re: Commission & Salary structures

    Quote Originally Posted by Tfreestyle View Post
    What would a rep have to lose if a sale was questionable if he would only lose as much as he was making on the sale? In the last month alone 1 rep made 2 very bad sales, each was 3 new lines so a total of SIX iphone 5 chargebacks, I personally lost $2800, rep lost $48, come on. There has to be something in place where they take discretion and have consequences for not making good decisions and to prevent fraud. You have to be kidding me if you think any rep wont make a sale that seems shady if he has nothing to personally lose, they are just going to process the new line/upgrade and cross their fingers they keep their $10-$20 when the owners are on the hook 500-1000.



    I have 4 bonuses posted, the first 2 attainable if they are doing their jobs and if they cant get the first bonus something is going wrong. A good month would be the 3rd bonus and if we have an amazing month they can hit the highest 4th bonus which they almost hit back in january so its not completely out of the question. Why would someone not put a really high bonus so the employees have something to strive for? also if they hit the 3rd bonus they dont have anything to look forward too and to keep the good sales going.

    I dont see how both of you would criticize this if you own your own store and you have to swallow $3000 chargebacks which is only a few iphones into todays commissions.
    How do you judge if a sale is suspicious or not? Seems to me that its your job as the business owner and leader to set standards by which to judge whether a sale is advisable or not. You can't merely judge this after the fact by whether it turned out good or not. If the sales rep follows the rules set in place to qualify the customer by a credit check process, id check, etc and the sale comes back bad then its on you to either come up with a better way to judge the customer or just eat the loss. People can't make judgement calls without standards by which to judge and the standards are set by the business or the leaders in place in that business and sometimes people will still slip thru the cracks. Punishing your reps for not following standards that you have not set is making them responsible for your shortcomings.

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    are you kidding me? thats exactly what Verizon does to the owners. Its not the store owners credit system or activation system.

    A suspicious sale would be a "customer" that gives a home address that is 20+ minutes away from our store that probably passed 6 verizon stores before coming to ours, doesnt want to port in any numbers even though getting 2-3-4 phones(usually all iphones), doesnt care about what color, gb or even ask questions about other phones, pays all cash for $500+ purchases. These are all signs of a bad sale and reps are trained to look for this but will ignore it if they have nothing to lose. If I had nothing to lose with verizon id activate every single person that walks in no questions asked but as a owner I am held responsible and so should the reps.

    A recent situation of a perfect example is that two customers come in, they have 4 lines all activated within the past 2 weeks all with iphone 5 16gb, when asking the customers phone number they literally had to look it up on their phone which wasnt even one of the iphone 5... rep runs credit all passed... then the rep goes to grab the new iphone 5 to activate it. I luckily overheard the situation and when he was getting the phone looked at their current usage, not more then 1 minute of usage per phone since activation. My rep was about to activate another iphone 5 since Verizon "approved" the customer but there are obvious signs that there is fraud going on. If the reps are just responsible for their own commission they will just hope it works out just like Verizon does and activate any line that walks in the door.

    Why would verizon credit approve the extra line? what does Verizon have to lose? Absolutely nothing, its all on the store owner. Verizon gets to collect an activation fee and a month of usage if they are lucky and maybe even a cancellation fee none of which ever sees the store owners pockets. If Verizon would actually give us the cancellation fees they collected(minus costs to collect it of course) I would be satisfied with that.

    Back to the situation though, I had a meeting with the employee after and almost in exact words "Well it was a new line, the system approved it and the commission was good, its worth it to try". This is when I started the triple commission chargeback to hold the employees responsible for making deals like this and to be more careful with more interest for the stores well being.

    Other then straight out fraud which is the bulk of chargebacks there is another reason that leads to disconnects, it is the customer not being fully informed of what they are getting into, including but not limited to plans, data usage, activation fees, upgrade fees, etc that the rep did not communicate properly even though it is part of their job. My reps have required training and have to pass periodic tests about plans, phone information and sales techniques but people are naturally lazy and are prone to not following protocol especially in the pay range we can afford to pay, its not like I can pay these guys 100k a year, its a 28-35k a year job and there is no room to pay more. I know what you guys are probably going to say, "You need to watch them more", If I need to babysit 25+ year old guys that get a decent paycheck what is the point of even having employees?

    I dont know what type of business you guys run in your fairytale land where every $12 an hour employee makes every right decision and they are all rocket scientists with phds but back down here in reality these guys need to be held responsible for their mistakes and shortcomings and for them only being responsible for about 5% of their fiscal mistake that sounds like a deal to me.

    Just in case you need a reminder and breakdown- iphone 5 cost to store $680, sells to customer for 200, store on hook for $480 of actual money if line cancelled in 181 days. Rep makes $8 on sale but if phone disconnected rep loses $24 and if you deduct the $8 he wouldnt have even gotten if not activated so really only loses $16 on a bad sale compared to the store owner losing $480 which is what 3% of the charged back amount where as in his commission if the sale sticks is about 8-10% of the owners profit, now when broken down like that who is getting screwed?

  6. #36
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    Re: Commission & Salary structures

    Quote Originally Posted by Tfreestyle View Post
    are you kidding me? thats exactly what Verizon does to the owners. Its not the store owners credit system or activation system.

    A suspicious sale would be a "customer" that gives a home address that is 20+ minutes away from our store that probably passed 6 verizon stores before coming to ours, doesnt want to port in any numbers even though getting 2-3-4 phones(usually all iphones), doesnt care about what color, gb or even ask questions about other phones, pays all cash for $500+ purchases. These are all signs of a bad sale and reps are trained to look for this but will ignore it if they have nothing to lose. If I had nothing to lose with verizon id activate every single person that walks in no questions asked but as a owner I am held responsible and so should the reps.

    A recent situation of a perfect example is that two customers come in, they have 4 lines all activated within the past 2 weeks all with iphone 5 16gb, when asking the customers phone number they literally had to look it up on their phone which wasnt even one of the iphone 5... rep runs credit all passed... then the rep goes to grab the new iphone 5 to activate it. I luckily overheard the situation and when he was getting the phone looked at their current usage, not more then 1 minute of usage per phone since activation. My rep was about to activate another iphone 5 since Verizon "approved" the customer but there are obvious signs that there is fraud going on. If the reps are just responsible for their own commission they will just hope it works out just like Verizon does and activate any line that walks in the door.

    Why would verizon credit approve the extra line? what does Verizon have to lose? Absolutely nothing, its all on the store owner. Verizon gets to collect an activation fee and a month of usage if they are lucky and maybe even a cancellation fee none of which ever sees the store owners pockets. If Verizon would actually give us the cancellation fees they collected(minus costs to collect it of course) I would be satisfied with that.

    Back to the situation though, I had a meeting with the employee after and almost in exact words "Well it was a new line, the system approved it and the commission was good, its worth it to try". This is when I started the triple commission chargeback to hold the employees responsible for making deals like this and to be more careful with more interest for the stores well being.

    Other then straight out fraud which is the bulk of chargebacks there is another reason that leads to disconnects, it is the customer not being fully informed of what they are getting into, including but not limited to plans, data usage, activation fees, upgrade fees, etc that the rep did not communicate properly even though it is part of their job. My reps have required training and have to pass periodic tests about plans, phone information and sales techniques but people are naturally lazy and are prone to not following protocol especially in the pay range we can afford to pay, its not like I can pay these guys 100k a year, its a 28-35k a year job and there is no room to pay more. I know what you guys are probably going to say, "You need to watch them more", If I need to babysit 25+ year old guys that get a decent paycheck what is the point of even having employees?

    I dont know what type of business you guys run in your fairytale land where every $12 an hour employee makes every right decision and they are all rocket scientists with phds but back down here in reality these guys need to be held responsible for their mistakes and shortcomings and for them only being responsible for about 5% of their fiscal mistake that sounds like a deal to me.

    Just in case you need a reminder and breakdown- iphone 5 cost to store $680, sells to customer for 200, store on hook for $480 of actual money if line cancelled in 181 days. Rep makes $8 on sale but if phone disconnected rep loses $24 and if you deduct the $8 he wouldnt have even gotten if not activated so really only loses $16 on a bad sale compared to the store owner losing $480 which is what 3% of the charged back amount where as in his commission if the sale sticks is about 8-10% of the owners profit, now when broken down like that who is getting screwed?
    Verizon charges back triple your commission like you are doing to your reps? And none of what you stated are necessarily illegal things but if you don't think your reps should sell these customers phones then make a checklist and have them signoff on each sale stating they accounted for these reasons then they will know what the standard is. And how is it the reps fault if they explain all the fees etc that you stated and still disconnect? I can understand taking back the commission but penealizing them by taking back 3 times what they made is ridiculous and probably wont keep you the best reps but more likely the reps that have nowhere else to go which will not help you or your business in the long run. By your logic you would be ok if vzw started penalizing you on chargebacks 3 times what they do now right?

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    Re: Commission & Salary structures

    And you also state your $12 an hour employees aren't rocket scientists but yet they are supposed to predict without error which customers are going to cancel? Perhaps I'd be a little more ok with it if you had a way of saying for sure which of the chargebacks the employee could have prevented or allowing a certain number to account for just plain bad luck where they followed all the rules and still got burned but what you are doing seems overly onerous to me and im pretty sure its illegal in my state.

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  8. #38
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    Quote Originally Posted by Tfreestyle View Post
    What would a rep have to lose if a sale was questionable if he would only lose as much as he was making on the sale? In the last month alone 1 rep made 2 very bad sales, each was 3 new lines so a total of SIX iphone 5 chargebacks, I personally lost $2800, rep lost $48, come on. There has to be something in place where they take discretion and have consequences for not making good decisions and to prevent fraud. You have to be kidding me if you think any rep wont make a sale that seems shady if he has nothing to personally lose, they are just going to process the new line/upgrade and cross their fingers they keep their $10-$20 when the owners are on the hook 500-1000.



    I have 4 bonuses posted, the first 2 attainable if they are doing their jobs and if they cant get the first bonus something is going wrong. A good month would be the 3rd bonus and if we have an amazing month they can hit the highest 4th bonus which they almost hit back in january so its not completely out of the question. Why would someone not put a really high bonus so the employees have something to strive for? also if they hit the 3rd bonus they dont have anything to look forward too and to keep the good sales going.

    I dont see how both of you would criticize this if you own your own store and you have to swallow $3000 chargebacks which is only a few iphones into todays commissions.
    1. I do own my own store.
    2. Perhaps you can tell me how to spot a chargeback in the making? I can't predict it that well. If I can't how can I expect a rep to do better than me. Bankuptcies, poor financial planning, family crisis, death, divorce, job loss, fraud, accident, health emergencies, etc. are not something your reps can control or predict.
    3. Losses from bad debt are part of business. Period. The goal is to identify the problems before they happen, in any industry this is true.
    4. If you have problems with iPhone cb, and I know they totally sting (trust me), get a third party agreement securitized with a credit card, or refuse the sale. You may lose some sales, but in the end it may help your bottom line.
    5. Your reps may not tell you to your face, but I guarantee some or all think you are a jerk for the triple cb and you pay a certain cost for that in terms of loyalty. When people feel they are treated unfairly they will even the score when they can get away with it. You think that is not true, think again. Would you write in to Dymax if they forgot to invoice you for an order? Would you submit a comp correction if you were overpaid on a sale?
    6. In terms of getting people to adjust their behavior, it is generally better to reward what you do want, rather than punish what you don't. Shift your bonus structure around to reward low cb rates. Personally I think cb are so hard to control, I would not do this, but if you think it will help, I would do this rather than 3x cb.
    Last edited by Downtown; 04-12-2013 at 09:40 AM.

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    I have a very good relationship with my employees. We have good communication, keep them in the loop on most aspects of the business and when we had the meeting about the triple chargeback there was alittle backlash but when I explained to them the exact profit margins and how much the store loses they did understand why that policy went into place. Now what my employees have been doing is if they do see a kind of shady deal they have called me right away telling me what happened and why they walked them sounding proud they prevented a store loss and usually ill grab lunch for the store or something similar. I know one of you will say they are lying just to get a free lunch or look good but I check the camera footage and the credit app if they got that far. It has happened 3-4 times since the policy change. As an ownee id rather walk a couple extra sales then have just 1 more chargeback. Can walk 5 people for every 1 chargeback essentially.

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    Re: Commission & Salary structures

    Quote Originally Posted by Tfreestyle View Post
    I have a very good relationship with my employees. We have good communication, keep them in the loop on most aspects of the business and when we had the meeting about the triple chargeback there was alittle backlash but when I explained to them the exact profit margins and how much the store loses they did understand why that policy went into place. Now what my employees have been doing is if they do see a kind of shady deal they have called me right away telling me what happened and why they walked them sounding proud they prevented a store loss and usually ill grab lunch for the store or something similar. I know one of you will say they are lying just to get a free lunch or look good but I check the camera footage and the credit app if they got that far. It has happened 3-4 times since the policy change. As an ownee id rather walk a couple extra sales then have just 1 more chargeback. Can walk 5 people for every 1 chargeback essentially.
    Or, just use your head and make a rule that:


    IPhone 5 can only be sold when bought with a bank/institution backed credit card.

    When the 5 came out I worked in a shady area and that rule was put into place and deterred most of the fraud you could run into.

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    Wow, this one got heated!

    Intentional fraud is usually pretty easy to spot. The triple CB rule is a bit unfair, imo. Maybe if the CB happens in the first month, but beyond that, it's hardly an indication of the rep's wrongdoing.

    Our store does not CB the reps at all. We all have a great relationship with the owner, and we all look out for fraud. And I mean REALLY look out. Something like what you described with the lines being new with no usage and the rep went to get another device? Would never ever happen. Not because of a tripple CB, but because how would the rep explain that? It would be an embarrassment! That's what it means to have a good team. And nobody babysits anyone. If you really feel that you need your triple CB policy to get your reps to pay attention to obvious alert signals, you, sir, have made some poor hiring decisions.

    Our new comp structure has worked really well. Reps get paid $9/Hour and have five goals. One for number of HPCs, one for number of MBB, one for new lines (not counting the former), one for monthly gross profit, and one for a higher gross profit. The commission is paid as a percentage of overall profit. Each attained goal is worth 2.5%. It's set up so that everyone who doesn't just fool around will hit 10%, and top performers will hit the fifth goal and get paid 12.5% on overall profit. The goals are ATTAINABLE and if we're having a bad month they will be revised to make sure of it.

    It's easy to talk about how much you're losing as an owner, but it's important to keep in mind that $50 to a sales rep can be worth more than $1000 to a successful business owner. Some people working for us have families. Some are pursuing degrees. Everyone pays rent. And times aren't easy. We have a very low turnover rate. Most people only leave after they finish their degrees and move on to something better. And if someone is not a good fit, they are let go right away. Our policies have created a true team player culture and everyone couldn't be happier.

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    Quote Originally Posted by vzRep View Post
    Wow, this one got heated!

    It's easy to talk about how much you're losing as an owner, but it's important to keep in mind that $50 to a sales rep can be worth more than $1000 to a successful business owner. Some people working for us have families. Some are pursuing degrees. Everyone pays rent. And times aren't easy. We have a very low turnover rate. Most people only leave after they finish their degrees and move on to something better. And if someone is not a good fit, they are let go right away. Our policies have created a true team player culture and everyone couldn't be happier.
    Don't start a family if you can't even fend yourself. Where I work, most get pregnant really early or start a family when they clearly cannot afford one. 4 out of the 6 girls we have hired throughout the years got pregnant, all under 20 and one was married at 18, straight out of high school. 2 out of 3 males we hired got a girl pregnant lol these are the same type of people who think they deserve $15 an hour pay at fast food places because they now have a family for their stupidity.

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