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Team Type Comp Plan

October 23, 2018

Team Type Comp Plansm is a compensation method that can be used to pay all customer or client facing employees. This creates teams out of individuals and works to better serve customers. Compensation is offered as either a percentage of the company’s sales or gross profits and are paid to everyone in the team (with varying percentages based on skill levels). Doing so builds a sense of ownership among all client facing employees and encourages greater team performance. This blog has been adapted from presentations Michael Roppo, Withum’s Director of Dealer Fixed Operations Consulting/Training, gives to car dealers, but I find it is applicable to any type of retail or service organization where multiple people in various capacities deal with customers, so am sharing his technique here.

Team Type Comp Planssm close the gaps between individual people and teams or departments moving the focus to providing better all-around customer experiences. Moving the compensation model away from only paying commissions to sales people toward commissioning the entire team takes away the self-centricity of the customer experience; and also creates a sense of “ownership” by the team members. Everyone on the team becomes focused on revenue creation and additional services for customers. In his consulting and training Mike has found that creating a team that is always, and in all ways, focused on pulling in the same direction gets the organization quicker to the targets it is seeking, and many times above it.

This is a successful program, and it has worked in many different kinds of service organizations and particularly in the automotive retail space, but that doesn’t mean the idea is for everyone. To be successful management needs a culture of blunt open book management communication. Open book comp plans work and work well because everyone knows what is going on and how much revenue or gross margin is being generated, and from where, and its growth. This requires sharing information that some businesses try to keep from employees. Mike has found that when it is open and properly communicated people will use it to propel themselves to higher levels of achievement. He calls it “no surprise service selling.” This commissions-for-all program works because all customer facing people share in the benefits; not just the sales people, but the entire back up support team.

In this process everyone that takes part in the creation of revenue participates. Advisors and service assistants extend themselves trying to better assist customers or any of the other sales team members. Even a receptionist would participate since, in reality, that is the first person the customer interacts with and initial positive or negative impressions start there. Further, better client service attitudes makes customers feel that everyone in the dealership or organization is looking out for their best interests; sometimes creating a one stop shopping experience customers weren’t aware of as being available.

Putting everyone on the Team Type Comp Plansm not only makes people more likely to help customers, it also eases the stress of making numbers by spreading around the responsibilities, much the way a football team must work together to win the game. Such camaraderie which eases an athlete’s performance anxiety successfully works when applied to managing customer relationships. A Team Type Comp Plansm effectively builds a real team in an easy and seamless manner.

If you want additional information, you can call me or contact Michael Roppo directly at mroppo@withum.com or 732.379.5217 to discuss it further or to arrange for a free consultation.

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