An inside sales agent or ISA can be one of the most cost-effective ways to bring in new leads for your business and qualify those leads to turn them into clients. But you’re going to have to pay them, and here are the three options you have to choose from.
Video Transcription
We’re going through this video series of hiring an inside sales agent. So you’re at the point in your business when you want to jump into the water and get yourself an ISA, but you’re just not sure what to do with the commission structure, what you should pay them. Today I want to give you guys what’s out there in the industry right now and want to talk about these strategies and the pros and cons to each.
Option #1
So the first that I see all the time is that usually a team or a broker will pay their ISA a flat hourly rate or salary. It could be as low as $15K or it could be upwards of $30K and then they also pay you a commission to their ISA off of the GCI of the home. That ranges from 5% upwards to even 10% that I’ve seen.
So the pros to this strategy are that you are encouraging what you really want, which is deals. You’re encouraging that ISA to seek out and close these deals because if they don’t, guess what? They’re not going to get paid. They’re getting better they’re gonna make it by and when you think about your salary just as a tangential thought for you when you think about the salary you want to pay them just enough to so they can pay their bills but not quite enough so they can be fat and happy.
So you want a low base salary and it encourages them to get on that phone and seek out the deals because they want to earn that 5% or that 10% commission.
Here’s the con. The con is in this business of real estate a lot of the deals are long-term transactions. It’s a relationship sale; you have to nurture the lead and follow up multiple times. So if you encourage the inside sales agent to only get a commission off of the closing of a deal, they’re going to be sniffing out and looking for the dollars, and they might ignore the follow-up calls. but it’s critical that your ISA also does the follow-ups.
Option #2
The second strategy that I see out there is that a broker or a team lead will pay their ISA that flat hourly rate or maybe a salary, but then they pay them per appointment that the ISA sets. So this is awesome because it actually rewards them for what they can control. They can’t really control you closing the deal of the home, but they can control the appointment, but here’s the con.
The con is you’re going to end up with a bunch of appointments on your books that aren’t qualified that might not go off. So what I would suggest to you is don’t just pay them on appointments they set, pay them on appointments that actually go off—qualified appointments that you actually have a chance to close that deal because you get in front of them.
Option #3
The last strategy that’s becoming popular is a lot of brokers, owners, and team leads aren’t paying any commission or bonus—they’re just doing a flat hourly rate or a flat salary. Now I don’t prefer this one because I believe any good inside sales associate is going to be driven by dialing for dollars and if they don’t have that incentive they’re not going to be motivated. But I know a lot of times brokers will do this because they want to encourage nurturing that lead and they want to encourage their ISA to just follow up and treat that client and focus on the client experience if you do this strategy where you’re not paying a bonus or commission.
What I encourage you is that you have to track the KPIs. That is, the con is that your ISAs may get lazy because they’re not driven. They’re not getting rewarded for closing deals, so they might become inefficient; they’re not going after the dollars. So make sure you track the KPIs.
The takeway
So there you have it guys there are the three strategies on commission structures that I’ve seen out there for inside sales agents. If you like these strategies make sure you subscribe to our YouTube channel, and check us out on Facebook and Instagram but most importantly, take action on this today!