# Scenario: SHould I pay commission on this?



## Grumpy (Oct 8, 2003)

Ok one of my sales guys has one foot out the door in terms of he's just doing barely well enough to keep around. let me tell you something that happened very recently and you can give me your opinion.

Someone called about a month ago, and wanted an estimate. As it turns out when my sales guy got out there, they were buying the house and it needed a new roof. Anyways he gave them a verbal of $8,000-$9,000 to replace the roof. That's breaking one of my cardinal rules of never ever giving a price without giving a written estimate. 

So the guy calls back ready to go ahead with the work, they are going to close in the next few days and want to schedule the work so it's complete BEFORE they move in. This was on the 11th or 12th of July. My sales guy makes an appointment to go meet them on Friday to close the deal. 

My sales guy shows up doesn't have nay contract forms, doesn't have any samples... nothing. So he gives them a measurement form, for flat roofing not shingle roofing Im might add, and makes another appointment to meet the guy on Monday the 17th at 10am.

The customer called the office a few times looking for my sales guy unable to reach him on his cell. After I recognized the voice I asked if there was anything I could help with and he explained the scenario. 

I know I am boring you by now but he missed his second chance to sell this customer because he overslept hung over from drinking all Sunday night. Real Good Going! 

*Anyways* Sorry I bored you with all that crap history but now here is where the story really begins.

The customer was frantic by Tuesday and my sales guy blew him off a 3rd time. He called the office to find out what was going on and I told him I was the GM and I am taking over now and not to fear we would have everything closed out and scheduled by the end of the day.

I sent out one of my roofers to measure. I figured the price. I typed the proposal. As it turns out the $8,000 is really a $14,920 job. No wonder the customer wanted us to do it so badly!  I managed to upsell the customer to $14,200 and we agreed to do the work!


So here is the question.... Would you pay the salesman commission on this sale? My first inclination is to fire this guy but I'm going to have a hard time finding a replacement at this time of year. Infact when it's time to trim the corporate fat he's going to be the first do go.


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## Double-A (Jul 3, 2006)

Who got the signature on the contract? That is who I would pay. If he wants a cut, fine. $1000.00, minus $500.00 for every appointment missed and every phone call not returned. Seems to me he owes you money.


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## ProWallGuy (Oct 17, 2003)

Why should he get the commision? He didn't sell anything. You did.


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## Mike Finley (Apr 28, 2004)

Fu#k no!

And if there was ever a catalyst to sit down and chew his ear off, this is certainly it, all the while I would have the commission check for this job sitting on the table made out to yourself and make sure he looks at it and realizes what it is. Make it a point of telling him thanks and let him know you are going to buy a big screen or something with his missed commission. Your "salesman" is a total clown in my opinion and is costing you a lot of money, you only find out about this one because the customer is a total lay-down and begging you guys to take his money, think of the customers that you aren't hearing about this guy is burning through with his 'salesmanship'.:furious:


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## jmic (Dec 10, 2005)

I'd say I don't even believe you have to ask anyone's opinion, the guy's going to drag you down. Now that you have to go and duplicate his work to make sure he isn't selling you down the river, you might as well just do it yourself till you find a replacement


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## mdshunk (Mar 13, 2005)

Does your commission structure have "lead pay"? Say, if the commission total is 10%, is it 2% for the lead and 8% for the sale, totalling 10% for a contract who's lead was generated and sold by the salesperson? If so, if his actions generated the lead, he at least should get the lead pay. He certainly didn't do anything to sell this deal, and you're darned lucky you managed to salvage it yourself.


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## ricpacer69 (Mar 4, 2006)

I'd tell him we have to do this $14,000 job for the $ 8,000.00 he quoted and ask him for the difference. :laughing: 

By the way great save on your part. :thumbup:


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## bmartin (Dec 30, 2005)

Fire the Bum. It shouldn't be too hard to hire someone who dosen't sale roofing, won't return phone calls, quote 40% off your actual price and come unprepared to close the deal too. I think your laborers could do that.


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## Rich Wozny (Aug 18, 2005)

Did you hire this guy from Craigslist?


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## AtlanticWBConst (Mar 29, 2006)

One other possibilty: 50 percent and a pink slip.

I think he should just get fired...then he'll have planty of time to drink....


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## Teetorbilt (Feb 12, 2004)

From what you have said, this guy is a poser. Ol'#2 is a salesperson and would NEVER break a rule, much less all of them at once.

BTW, I believe that salespeople are born, not made. They thrive on the art of the deal, can shrug off rejection with impunity and go looking for their next mark....er, CUSTOMER!


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## Tscarborough (Feb 25, 2006)

The door could not hit him in the ass fast enough, and he would not get any commission on that sale.


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## Patty (Jan 21, 2006)

Mike Finley said:


> Fu#k no!
> 
> And if there was ever a catalyst to sit down and chew his ear off, this is certainly it, all the while I would have the commission check for this job sitting on the table made out to yourself and make sure he looks at it and realizes what it is. Make it a point of telling him thanks and let him know you are going to buy a big screen or something with his missed commission. Your "salesman" is a total clown in my opinion and is costing you a lot of money, you only find out about this one because the customer is a total lay-down and begging you guys to take his money, think of the customers that you aren't hearing about this guy is burning through with his 'salesmanship'.:furious:


DITTO DITTO DITTO TO ALL OF THE ABOVE!:thumbsup: 
(especially the first two words):w00t: 

You keep the ENTIRE commission, show up at the Chicago Members Get-Together and buy us all a round!:laughing: arty: 

All in Favor, say "I":clap:


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## nadonailer (Nov 15, 2005)

You're being way too nice on this one  This guy should be shown the door asap, a bad sales guy representing you is worse than no one at all, IMHO. i would fire him today.......


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## Joasis (Mar 28, 2006)

I know why I do my own sales now....and to think I fired a guy from blowing a motor in a van....this guy could potentially cost you a fortune in lost work.


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## Grumpy (Oct 8, 2003)

Woz the Painter said:


> Did you hire this guy from Craigslist?


No actually. Woz absolutely HATEs craigslist.


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## Grumpy (Oct 8, 2003)

Hey guys I agree, this guys needs to be canned and if it were in a slightly less crucial time of the year he'd already be gone. He will be canned once things slow down. Firing him right now would be like shooting myself in the foot financially, though he's a hack he does bring in some work. 

Thanks for confirming what I already knew. No commission for him. (I wish I could say it like the soup nazi from seinfeld.)


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## jblati (Jul 31, 2006)

Grumpy, I am new here but have lurked a bit. You and I have similar thoughts. 

On this one, be sure to remember what he is COSTING you. Your name is something you can rarely buy back. Sometimes never meeting a client is better than meeting them and aggrevating them.


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## Peladu (Jan 8, 2006)

My God, if I was originally told 8K to 9K to complete a job, and 
then the same company came back with a quote of 14K+, 
I wouldn't hire them. I would feel as if I was lowballed and 
even if it cost me more I would go with another company.


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## Grumpy (Oct 8, 2003)

Peladu said:


> My God, if I was originally told 8K to 9K to complete a job, and
> then the same company came back with a quote of 14K+,
> I wouldn't hire them. I would feel as if I was lowballed and
> even if it cost me more I would go with another company.


I agree, if in the customer's shoes I wouldn't have hired us. However all the other quotes he got were in the ball park of our revised estimate. He was under no pressure to sign up, the re-sale was done by me over the phone and fax. Take it or leave it basically is what it came down to. I'd rather not do a job then to do a job for $8k and lose $1k out of pocket. However a standard line in my service agreement, on the back of all my proposals, is that the contract is not final until reviewed and scheduled by the management. 

What suprises me more is that he had 3 proposals about $14k and then ours at $8,600 and it didn't raise any alarms or red flags. I even asked him why he hired us and didn't throw our proposal in the garabage... The answer was obvious but the question wasn't asked to be answered but was asked to provoke him to think about the dumb move he had made.

Anyways this job is almost done. The roof is on. We did manage to break a 2nd floor window on the neighbor's house some how (not even sure if we did this to be honest) but it's already been fixed. We are just waiting on the gutters, but they are half done. This HEAT is killing us. 

I've decided that I am going to use this incident as an excuse to sit the salesmen down and tell him his position within the company is in major jeopardy and he has X ammount of time to impress me or else. Then I am simply going to ask him.... *"Do you really feel as if you deserve any commission on this job? Before you answer, stop and think and examine your conscience and heart and tell me if you really really think I should pay you anything on this job." *


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## Glasshousebltr (Feb 9, 2004)

Grump, he probably pulled drunk, he probably didn't call the customer back.......However...here's some food for thought......the bird in your ear is the pissed bird......all I'm saying is pissed customers say some screwed up crap.

I do agree with ya though, torque him down and make him work or curb him.

Bob


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## Grumpy (Oct 8, 2003)

Glasshousebltr said:


> Grump, he probably pulled drunk, he probably didn't call the customer back.......However...here's some food for thought......the bird in your ear is the pissed bird......all I'm saying is pissed customers say some screwed up crap.
> 
> I do agree with ya though, torque him down and make him work or curb him.
> 
> Bob


Bob, I hear what you are saying about only hearing the customers side of the story and not the salesmans's side, but I know everything to be true of what I have been told by the customer only from my own involvement of being on the outside looking in until I took control of the situation.


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## Tscarborough (Feb 25, 2006)

Not returning customer calls is the cardinal sin-I would fire him for that alone.


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## pruane (Jul 2, 2006)

1 word-
FIRED.

An unhappy customer is your worst free advertising. They are the reason we are all in business.


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## Grumpy (Oct 8, 2003)

Thanks for your opinions TSC and Pruane, however as I have stated many times in this thread, firing him now would be a terrible idea at the moment. At this time of the year a bad salesman is better than no salesman. 

I have to live with the Bullcrap for the moment. I would suffer more, financially, if I fired him that if I keep him around. I really don't have the option of firing him until the winter.


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## AtlanticWBConst (Mar 29, 2006)

Grumpy,

I understand your dilemna.
Yes, bad help is better than no help. 
Because, then, YOU have to work overtime to keep up. 
What we have done: Tollerate and do minimal Babysitting till things catch up. We let them Know during that time of their 'mistakes'.....Then, when the right help is found and things slow down a bit....Then, that is the time...and They KNOW WHY.

TRUTH BE TOLD: Timing is everything in Business.
I can comprehend..what you are saying. You'd like to ....BUT, now will only SCREW -YOU over.

Best of luck - When the TIME comes to get rid of the dead wood.


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## Tscarborough (Feb 25, 2006)

I understand that situation. At the least, you need to give him a write-up, or whatever type of written notification is required that he has used up his mulligan, and is now employed at your pleasure.


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## Grumpy (Oct 8, 2003)

Tscarborough said:


> I understand that situation. At the least, you need to give him a write-up, or whatever type of written notification is required that he has used up his mulligan, and is now employed at your pleasure.


Yes, although a written write up whas not issued a long talk was issued. I explained to him that at no other company I can think of would he still have employment and if any similiar crap every happens again he will not have employment. I also explained that he has to prove to me he wants this job because he doesn't act like he takes it seriously.


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## Fence & Deck (Jan 23, 2006)

I recently had similar problems. I let my salesman go because he missed apointments, underpriced, used prssure tactics, and promised not only the sun and the mon, but the stars at night as well as the highest mountains and the deep blue sea.
On one job, he promised we'd paint the deck white: a $300 sq ft deck for $300. I made him go do it!
One day he got upset because I refused to give him a draw (he was already into me for $3000), we had words, and I showed him the door.

IMHO, you owe no commission, and I think you should not keep him. He is only doing your company damage in the eyes of the people he does see.


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## Grumpy (Oct 8, 2003)

Stone Mountain said:


> IMHO, you owe no commission, and I think you should not keep him. He is only doing your company damage in the eyes of the people he does see.


Yes I agree but I can not let him go without putting myself in debt. If I were to let him go it could literally take months to replace him. In those months time I would have lost revenue which would then take me more months to recover. 

All of our budgeting and expenses are based on a forecasted revenue ammount. To cut one salesman would reduce that revenue ammount by about 35-40%. Our markup it typically only 35-40% therefore as you could see quite simply the company would be simply working for zero profit until a replacement were found and brought up to speed, which again would take months.

Could I reduce overhead to cover for the lost revenue? Yes some, but not enough. Alot of expenses are fixed. 

As a small business I rely on each and every employee and even firing one person has major consequences. Bottom line at the end of the day I will hurt myself more by firing him now than by keeping him around until we slow down or I find a replacement... and trust me I am looking.


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## Mike Finley (Apr 28, 2004)

Man Grumpy, you should do yourself a big favor and steal away a honest to goodness good salesman from your competition. It seems you are having endless problems revolving around sales, if you could solve them you might get some sleep at night. It sounds like you are only interested in a green salesman that you can train yourself, is that the case?


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## Jon F (Jul 15, 2006)

Grumpy,

I am fairly new to the board and do not know you/your biz that well, and I have few questions. I see you do roof/siding/gutter/etc. When you call this guy a "salesman", is he a true cold-call salesman?? Or does Mr. Jones call Grumpy Exteriors and ask for bid, and you send out this guy, who then does the bid, and goes for the sale?? Moreso an estimator??


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## bmartin (Dec 30, 2005)

Grumpy those numbers seem off to me. You'd still be making money on the work your doing and your costs would drop according to your workload so unless you have extremely high overhead or real low volume (probably not with at least 2 salesman) I can't see how you would be operating for zero profit. Besides the way you make it sound this guy isn't bringing in anywhere near 35-40% profit. If losing this guy means you can't pay your overhead then I would think you can't afford him anyway.


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## Grumpy (Oct 8, 2003)

Mike Finley said:


> Man Grumpy, you should do yourself a big favor and steal away a honest to goodness good salesman from your competition. It seems you are having endless problems revolving around sales, if you could solve them you might get some sleep at night. It sounds like you are only interested in a green salesman that you can train yourself, is that the case?


Mike I've tried everything from "closers" who know nothing about what they are selling to green guys who know how to install but not sell. I have to think that I am part of the problem, but I think that part is not knowing how to hire a proper sales person. I have two now, one just started. I have high hopes for this new one but he isn't too computer friendly. HOWEVER he shows up every day on time, he has made all his appointments, and doesn't complain. 




Jon Fife said:


> Grumpy,
> 
> I am fairly new to the board and do not know you/your biz that well, and I have few questions. I see you do roof/siding/gutter/etc. When you call this guy a "salesman", is he a true cold-call salesman?? Or does Mr. Jones call Grumpy Exteriors and ask for bid, and you send out this guy, who then does the bid, and goes for the sale?? Moreso an estimator??


No cold calling is involved. It's part order taker and part salesman. Really I don't want the typical "Sales person". I do not want a closer. I want someone who will take a more consultive approach to the sale, but has the sales skills to know how to ask for the job and overcome objections WITHOUT being pushy. 

You asked about the setup. I spend alot on advertising and get more leads than we can handle. Each person calls or emails us requesting an estimate, then the salesman calls back to set an appointment. I've been thinking what I have to do with this guy is set his appointments for him and have him come in each morning and tell him "here are your leads for the day." but I do not have time to baby sit. 

I do not think that how the lead was generated determines the person's title if they are an estimator or sales person. That's a topic for a whole other discussion. 





bmartin said:


> Grumpy those numbers seem off to me. You'd still be making money on the work your doing and your costs would drop according to your workload so unless you have extremely high overhead or real low volume (probably not with at least 2 salesman) I can't see how you would be operating for zero profit. Besides the way you make it sound this guy isn't bringing in anywhere near 35-40% profit. If losing this guy means you can't pay your overhead then I would think you can't afford him anyway.


 Yes I would be GROSSING money on each job but after you factor in overhead variables I would come out behind. It's the OVERHEAD that has my hands tied. Reducing my revenue 30-40% would incredibly injure the bottom line. When you have 2 sales men plus myself, that makes 3. I have so many other things to do without actually factoring the numbers I would guess I bring in about 20% or so. I just do the sales for the fun of it. It's what I enjoy.

We are a growing company and run a very tight ship. Mistakes cost me, until I can increase overall revenue. If I can get Bill, that's my new salesman, to pull in $50k sales a month I could take the hit and fire Chris, who is the one giving me all the problems. Chris would be good if I baby sit him. Sometimes he impresses me. However it's the other times, as described in my original thread, that disgust me.


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