Sales Compensation Discussion with Paul Filary of Kramer Tree
Written by Tom Dunn
Paul Filary is the Director of Operations and ISA Certified Arborist with Kramer Tree Specialists (KTS), based out of West Chicago, Illinois. Before becoming the Operations Manager at KTS, Paul was the Sales Manager at KTS and holds a degree in Forestry from Michigan State University. Kramer Tree provides a wide range of services to its client base including Tree Care, Mulch Products, Plant Health Care, Tree Planting, Urban Wood Products, Safety Training, Consulting and Holiday Lighting.
We wanted to get Paul’s take on important considerations when establishing a Sales Compensation structure for a sales arborist team.
What are some of the key factors to consider when establishing a sales compensation package?
The first step before even setting up a compensation package is to do some market research on what competitive annual salaries are in your sales territory. Use this information to determine if the annual salaries are attainable for your sales team and this will help in how you structure the compensation.
Another important step that is often overlooked is to have a grasp on job costs for the different services your company provides. This will establish what a profitable hourly rate is and will help determine where your commission levels should be set. Job costs can be based on an individual job or a collection of jobs.
A tiered commission structure based on the volume of business sold versus a flat rate has proven to be a successful motivating factor. If the sales arborists know they can earn a higher commission rate once they reach and exceed a targeted commissionable sales amount, they will not become complacent.
Determine if you want to have a draw versus commission or a salary plus commission structure is the next tough decision. There are pros and cons to both, but a salary plus commission structure provides more predictability of costs, allows for the sales arborist to establish a customer base and can help smooth out the cyclical nature of tree care business. You may also lose some control over what the sales arborist is doing under a draw versus commission structure which may hinder any training you want to implement.
How often do you review sales results with your team?
I have tried different intervals with our team and have found that quarterly sales review works best just because there is a little more time to accumulate and analyze the sales data. The key is be able to show the sales arborist how they are doing in simple, understandable reports that identify where their sales are coming from, if they are hitting established sales rations and whether their estimates have been accurate.
A regular meeting time also provides for consistent two-way input on the types of jobs or maybe particular crews that are causing problems for the sales arborist problems, so they can be addressed in a timely manner and sales tactics can be revised.
What type of backgrounds or requirements do you look for when hiring or promoting someone to a sales position?
More than likely they will have some type of background in the tree care industry, but it is not an absolute done deal if they don’t have a tree care background. If they are passionate about the industry, can gain the respect of the crews they will be working with, are personable and have excellent communication skills that is usually a recipe for success.
What is also important is that they understand being a sales arborist is not a 9-5 job. They have to make it a part of their lifestyle and be available any time they are needed by their clients.
What do you see as your role as a sales manager?
Develop and refine a sales compensation structure that is flexible and attainable for the sales arborists. Providing regular analysis and feedback that is understandable and has relevant information for the sales arborists. Find opportunities for the sales arborists to attend industry events and meet potential clients.
- Establish a tiered commission structure based on the services offered.
- Do the sales data analysis required to help the sales arborists develop
- Be flexible with sales structure as new services are added
If you need further assistance with Sales & Marketing, please reach out to a member of our ArboRisk team. We have many resources that can help you with this, in addition to our Thrive Sales & Marketing Package: https://arboriskinsurance.com/thrive-sales/ which provides one on one help developing the right marketing message to land the right customer.