For energy suppliers, growth is continually at the forefront of their minds. Hunting for new ways to expand your clientele and boost sales can take up much of your day. While exploring new ways to increase sales and opportunities for growth is essential, looking at your current strategies is also crucial. You will always have areas where you can improve, and when you take the time to better your tactics, you may find that growth will happen naturally.
One of the most significant setbacks that suppliers face is their commission management. When these do not exist or are poorly executed, they can cause setbacks and limit the growth you can achieve. However, when a commission plan is implemented correctly, it can unlock potential growth.
What Are Sales Commission Plans?
As retail energy suppliers, your broker partnership is one of the most important relationships to foster. While you are working behind the scenes to supply energy, brokers are on the front lines, talking with potential customers and closing deals. Both roles are needed for a successful energy transaction. However, keeping track of commissions with multiple brokers can take time and effort. With a commission plan, you can use innovative energy software to manage monthly payments. The software can efficiently distribute commissions and reinforce a positive relationship with brokers by plugging in your compensation mix, pay schedules, and broker information. Having a set-in-stone plan is one of the best ways to keep track of commissions and make the monthly task hassle-free.
How to Set Up a Commission Plan in Four Simple Steps
Setting a commission plan can be essential in revamping your business strategy. It can have shocking results. If you want to unlock growth potential, setting up a realistic commission plan is necessary. We have you covered if you need help figuring out where to start in this process.
1. Find Your Desired Compensation Mix
As you strive to work with more brokers, having an appealing compensation mix is crucial. The percentage of compensation a broker will receive can sway their decision to partner with specific suppliers. As you determine the compensation mix for your business, remember that an appealing blend can be the deciding factor that influences brokers to work with you. Finding a compensation mix that is mutually beneficial to you, the retail energy supplier and the energy brokers is one way you can grow your business. With an attractive compensation mix, you can create partnerships with more brokers, expanding your reach to potential customers.
2. Calculate the Averages
You need to have a detailed understanding of your monthly sales to set your monthly sales quota. Knowing the average monthly sales will help up different commission levels for brokers. To find the monthly average for an entire year, add all the monthly sales and divide that total by 12. If you want to see the average monthly sale per broker, you will divide that final number by the number of brokers you currently work with.
3. Determine Realistic and Obtainable Goals
This step is crucial. If your goals are not obtainable, they will end up doing more harm to your sales than good. Salespeople will get discouraged when they do not see your goals as realistic. When a person does not think they will ever reach the next level, they may begin to slack and not work as hard. Setting realistic goals shows your employees that you want to see them succeed and are cheering them on along the way. Your first goal should be shortly above the average monthly sales. However, there are other factors that you should keep in mind when setting these goals. For example, if one of your brokers is entering a new market, it may take longer to secure several sales. In this case, they would need a higher base pay or commission to make ends meet and stay motivated.
4. Create Commission Tiers
As your sales levels increase, you can consider expanding the commission percentage. Considering the average monthly sales per employee can help you know what realistic expectations of your team are and what you can do to increase their motivation. You could start with a 5% commission rate at the first level and increase that number with each new tier. Implementing a commission-tier system encourages your salespeople to keep expanding their reach. Handling all of this manually can significantly burden your time and resources. Consider leveraging energy commission software to automate this process, further clarifying your commission tiers.
The Benefits of a Sales Commission Plan
Setting up a sales commission plan leads to high company revenue and shows brokers you care about their success. With an intelligent commission mix and plan, brokers will see that their monthly income will increase, and their businesses will become even more sustainable, leading them to want to continue to work with you. When brokers see the company they work with taking steps to make the partnership even more beneficial, you will establish a positive relationship with them. This increases motivation and will result in winning more deals. As your sales increase, so will your company’s revenue. A sales commission plan will show your brokers that you care for them and their financial health while continuing to push your business to new heights.
Put Your Commission Plan in Action
Once you have followed these steps and evaluated your sales averages, you will be ready to implement your plan. When you factor in your company’s unique goals and employees’ needs, you can create a plan to unlock substantial growth potential. Following a cookie-cutter strategy may not work for your business and would leave your team frustrated with unmet goals and tiers. However, when you create a sales commission plan that sets brokers you work with up for success, your business will reap the benefits for years.
Unlock Efficiency Benefits With Your New Commission Plan
Increasing revenue happens by setting up a commission plan and creating a strategic pricing system. Those are the best places to start if you are an energy supplier looking for ways to achieve higher profits. When you establish a strong commission plan and pricing system, you will increase your credibility and pr, of its all while strengthening your relationship. Our free guide will walk you through eight tips and techniques to turn your pricing system into a powerhouse for your business. Download 8 Ways To Make Your Pricing System Keep You Out of the Red and Deep Into the Black today.
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