As the economy begins to turn around, b-to-b publishers are putting together new compensation programs for sales reps, focusing on realistic, attainable goals.
It's not an easy job. During two to three years of an ad slump, sales and commissions plummeted. The challenge now is determining how to forecast sales accurately and provide incentives for salespeople based on reaching projections, publishers say.
"The economy over the last three years had everyone scratching their heads, trying to figure out how to incentivize these people," said John Taggart, exec VP-group publisher at MediaTec Publishing, which publishes Chief Learning Officer, IT Contractor, Certification and other magazines serving education and technology markets. "The market seems to be coming back, so to compare last September to this September is night and day."
MediaTec pays its sales reps on a straight commission basis. Its challenge is setting realistic goals to provide incentives to its reps. "You don't want them to just get the low-hanging fruit," Taggart said. "They have to go up the tree. What is it going to take to get those pages?"
To address this very problem, American Lawyer Media last year implemented a new compensation plan under which sales goals and commissions are set on a yearly forecasted basis rather than against the previous year's actual sales.
Goals for sales reps are set up on a tiered system, so that commissions increase as each tier is met, said Kevin Vermeulen, VP-group publisher at American Lawyer Media, which publishes The American Lawyer, The National Law Journal and other legal trade publications.
After reps reach a certain dollar level for the year, extra commission points kick in. Vermeulen would not disclose the exact commission levels.
"It works great," Vermeulen said. "The incentive is there for salespeople to keep pushing. When we need it most is toward the end of the year, and that is when they get their biggest paychecks. They want to push as hard as they can so they can get increased commissions."
Vermeulen said American Lawyer is now developing a more integrated approach to sales, with its reps being compensated for selling across media with integrated programs.
While the publishing company has separate staffs to sell online, print and events, reps receive a commission cut for sharing leads and are encouraged to work on joint presentations to bring in a bigger bang for the buck, Vermeulen said. "With all of our commission programs, it's a win-win situation so our salespeople have a stronger incentive to take in more money for the company," he said.
Meister Media, which publishes Cotton Grower, American Fruit Grower, PrecisionAg and other agriculture publications, faces the challenge of compensating reps in a market that hasn't turned around yet.
"We are still operating in a declining-to-flat market," said Al Strohmaier, group publisher of the CropLife Media Group at Meister.
Last year, Meister adjusted its compensation program to make sure its reps didn't go into negative numbers. Working on a salary-plus-commission basis, some reps didn't hit their projections when the agriculture economy tanked in 2003.
"We had some guys who got behind, and they wound up being negative," Strohmaier said. "We didn't want to make them pay money back, and in some cases we didn't."
Meister implemented a tiered commission structure that rewards reps for hitting higher levels accumulated during the year. The commission structure starts out at 3%, then increases to 4%, 5% and higher once certain targets are hit.
"It is more balanced, and at the end of the year, you don't have any surprises," Strohmaier said.