I have railed about commission based sales in the multifamily space for years.
It’s a worn out model. But people keep finding premise after premise to keep it alive and kicking. It’s broken
The article below clearly demonstrates that the model is broke:
Pricing and Sales: An Interesting Interplay in Multi-family – Multifamily Blogs
That’s an “elephant in the room” that we need to talk about. Most salespeople only benefit from sales going up; but our leasing associates can sometimes feel like they’re being penalized for their own success. They lease well, so the pricing system raises rents which makes it harder to lease. This is not “normal” in most of the sales world, so we should be purposeful and address this very real situation with our leasing associates.
But to keep things alive and kicking; it goes on and on with suggestions about how to make leasing professionals feel okay about it. Here is the cold-hard truth, they feel penalized because the business model is different yet the compensation plan is the same. Let’s face it, money in the bank is the only thing that makes a sales person Phappyrrell [Read: Happy].
We need to stop and think about the compensation system that makes sense in the context of the new model. It’s that simple. It’s that clean. But it’s not that easy. Really not that easy.
Drop leasing commissions – make them a thing of the past. Raise base wages to offset lost commissions (take a two-year trailing average of all commissions paid and tally an average increase – tweak where necessary) and move on.
Your looking to push the edge with leasing commissions Multifamily Maniac,
M
0 Responses
Or…make commissions and bonuses a bigger factor. Make them 50% or more of compensation with bonuses tied to year over year revenue growth and customer satisfaction. Now your incentive/commission plan is measurable in a more positive way.