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Staff commissions for bringing in new clients

Staff commissions

Hi everyone, first time posting. I ran a search on the site but didn't come up with relevant answers. 

Intersted to know if other firms out there have a methodology or policy for paying staff commissions on new clients. e.g. a one off payment or a recurring fee. What do you do when the client leaves etc.

 

 

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May 23rd 2017 21:07

That's a tricky one. I think re-occurring payments based on revenue from that client is fair. That way, the more lucrative the client, the more the incentive for staff.

It also means you are not paying out the same amount to the staff member who brings in a $5K client as you would the staff member who brings in a $50K client.

Finally, it means that the payments or monthly commission stops when employment stops - like their wage.

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By SLV
May 26th 2017 18:51

My experience was that a firm accepted new clients and shared a commission/fee/revenue for a set amount of time.

The rule at a prior place of employment was that the client could not have been a prior client in the past 5 years (including same owners, new company name), and the staff member was entitled to a percentage of collected net revenues based on payment receipt within terms and excluding certain pass through costs. Language was also added to stop any payments after someone left the firm (it amazed me that people would come back to us for funds after they left, so this had to be added). We also set a three year time limit for revenue share/commissions to continue with a graded drop over the three years - 10% 7.5% 5%.

The staff member was encouraged to look for real new business, keep the new client engaged and provide them with new services (i.e. more firm revenue), and they did not get stuck on just servicing what they brought in a decade ago to keep getting checks. As staff members were promoted, they were given the option to share some of their revenue share/commission with someone else to make sure the details were still being taken care of and spread the workload.

This resulted in a more overall new business and a better sharing of work to avoid a client becoming too attached to one staff member. The client benefited as they were introduced to more firm members and their loyalty developed into one for the firm and not just the person.

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