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» Sales Commissions - It's not about the money! : 29 Oct 2012


Sales Commissions - It's not about the money! : 29 Oct 2012

A few weeks ago I posted an article questioning the merits of sales commissions (Sales commissions - Logical or Just Traditional). Since then I've had a few conversations with Clayton Sinclair, of Advance Fitness Marketing, who felt quite strongly about the value of commissions. I confess to being of the mind set that commissions were simply traditional, more than anything else, I now see the merit in the commission structure - it's not just about people being motivated by money, it's about a method of easily measuring and recognising success in a role.

The following article includes three of the six points taken from a 'sales commission guidelines' document created by Clayton. He has agreed to send the complete document to any Fitness Recruitment reader that requests it (in particular, CGM's, Sales Managers and aspiring Sales Managers).

Enjoy...



Research has indicated that paying commissions may not produce the benefit that we might expect.


The results indicate that, for simple/repetitious activity, a reward is likely to be helpful. If however, the process is complicated or requires creativity or problem solving then the use of financial rewards may not help and may in fact be harmful.

At Advance, about 30% of our payroll has been commission based remuneration, so we've had reason to give this area a great deal of thought.

Whilst there is no doubt that the sale of fitness services does require some mental effort (understanding the prospects needs/wants and basing your presentation on this information), the structure of a fitness sales presentation is generally consistent enough that commissions are likely to be beneficial. When it comes to “follow up” or lead generation, it is the consistent activity that is a strong contributor to success. As such, an incentive that helps a sales person to decide to pick up the phone and make some calls should surely help to produce a favourable result.

However, commission alone will rarely produce the desired result in any business. Commissions should be viewed as a catalyst for review, recognition and responsibilities.

We recommend the following guidelines when implementing a bonus and commission plan to ensure that it offers the maximum benefit for all concerned:

Regular and consistent recognition
While it is important to have sales staff conscious of their targets and the associated commissions, the financial incentive is only part of the equation. Most people appreciate recognition for good performance. A commission plan, combined with weekly sales meetings, helps to create a framework for regular and consistent performance feedback for staff. For some staff, the genuine recognition of good performance may be equally or even more motivating than the financial incentives.

Bonus what you want to see
“Spot” Bonuses can be used to draw attention to a new initiative. For example, if you want to see Group Fitness attendance increase by 20% in the month ? you could place a specific bonus for the Group Fitness Coordinator on that outcome. Creating the bonus is not always just about the dollars in the team members pocket ? it also says “this area of performance is important to the business and your role”.

Use multiple levels of bonuses for greatest effect
It is usually helpful to create immediate and short term (weekly) targets for sales staff. For sales management or club management staff, I would recommend immediate, short and medium term (monthly/quarterly) targets and bonuses. For sales people my preference is a smaller bonus for each sale (without threshold) and then a weekly bonus for hitting the sales target that matches the business needs. I like this balance as there is an incentive to follow up every lead. Additionally, the “cream” for the sale person (hitting their weekly target) is also the “cream” for the business. It is this last point that I like about commission plans in general, and that is “sharing the success” - creating a sense of, if we win as a team, we also benefit as individuals.

Commission structures are not a 'one size fits all' scenario. They should take into account business goals and define clear responsibilities, accountabilities and targets. One thing is very clear, larger commissions will not necessarily lead to proportionality larger sales results. Better management leads to better performance, and a well thought our commission structure is a better manager's greatest tool.

As mentioned, these are only three of six important considerations when creating your commission structure. Email Clayton for the complete article.

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