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Making a Successful Living in Commission Advertising Sales

Making a Successful Living

Making a successful living in advertising sales is fun and lucrative. But some self-imposed obstacles can prevent you from realizing your true potential. This article will help you understand what some of those obstacles are and how to overcome them and reach a higher level of performance.

Making a Successful Living

In most new careers, there is going to be a learning curve. I like to advise new salespeople that the first year you learn, the second year you earn. In this article, I will help you do the math to determine some basic guidelines for success in commission sales.

In this article, you will learn the basic components for calculating what it takes to build a successful career in advertising sales.

  • How much the salesperson wants to earn.
  • The company’s average commission rate.
  • How much the salesperson needs to sell.
  • The company’s average monthly order.
  • Time management basics.

How Much Do You Want to Earn?

The answer to that question is the starting point of the math behind your income plan. If you know how much you want to earn, you can determine how much you need to sell.

The salesperson in our example wants to earn $7,000 a month in commissions or $84,000 per year. The salesperson’s company pays a 15% commission for each sale.

To calculate the sales needed to earn $7,000 in commission, take 7,000 and divide it by the 15% commission rate.

$7,000 ÷ .15 = $46,666

The answer is $46,666. The salesperson must sell $46,666 to earn $7,000 in commission at 15%.

We will round the number up to $47,000.

That is the first calculation in learning how to make a living selling in a commission-based job.

The Average Order

The average order at the salesperson’s company is $2,000 per month.

The salesperson needs to sell $47,000 a month to earn $7,000 in commissions. So divide $47,000 by the average sale of $2,000, and we learn the salesperson must make 23.5 average sales.

$47,000 ÷ $2,000 = 23.5 sales contracts.

Here is the first opportunity for the salesperson to impact their earning capabilities.

We are using the average order of $2,000 in these calculations. If the salesperson pursues sales opportunities below $2,000 a month, they are chasing after below-average prospects. The salesperson will not be able to make $7,000 a month. If the salesperson pursues sales opportunities above $2,000 a month, they target above-average opportunities and see a more rewarding paycheck.

So far,

  • The salesperson wants to earn $7,000 a month in commission.
  • The salesperson must sell $47,000 a month at a 15% commission to earn $7,000.
  • Using the company’s average order of $2,000, the salesperson must make 24 sales every month.

Length of Contract

McDonalds started advertising in 1955, and they have never stopped. The most successful companies advertise consistently, month after month. Yet many advertising salespeople misguidedly present short-term advertising proposals. In addition to being scientifically unsound, the salesperson only increases their workload, forcing them to resell the same clients over and over every few months.

The advertising salesperson who actively presents long-term plans doesn’t have to resell all 24 customers monthly. They need to work on the renewals.

Time Management

I don’t have any scientific data, just anecdotal observations, but a good advertising salesperson can manage about 20-40 average customers in any given month. A time management component can limit the salesperson’s performance and earning potential. I’ve seen some experienced salespeople with excellent time management skills maintain a list of 80 to 100 clients a month.

Many new salespeople struggle to manage 10 to 15 clients because they fail to propose and sell long-term advertising plans.

The salesperson will find it very difficult, if not impossible, to resell 24 different clients every month. There is just too much paperwork and other requirements to get everything done.

Therefore, the salesperson must build a book of business based on long-term agreements. As the salesperson begins building their account list, they will naturally have contracts with different expiration dates. They won’t all come up for renewal at the same time.

Setting Your Activity Levels

So far, you have estimated how much money you want to make, how much you need to sell, and how many customers you need. Now you need to establish your activity levels to sufficient levels to reach these goals.

I think I have a 20% closing ratio. I don’t count renewals. I just count the new leads I’ve never sold before. I need to see at least 10 new leads if I’m going to have a fighting chance of closing just two of them. I recommend working a pool of forty new leads. If I call ten leads and get hung up on all ten times, I’ll put those ten leads aside and add ten fresh new leads. I want to thoroughly go through all forty leads as quickly as I can because forty leads are only going to yield eight new customers and I need 30 to 40 annual customers to meet the revenue goals I first established. I want to get through all forty leads within two weeks.

It will take you many attempts to reach the decision-maker. You may need to call or email one lead ten or more times to make a meaningful contact that can lead to an appointment.

Wrap Up – Making a Successful Living

  • Start with how much money you want to make.
  • Using the average commission, calculate how much advertising you need to sell.
  • With the average order size, determine how many customers you need each month.
  • Using a good advertising strategy, propose consistent long-term advertising proposals.
  • Exercise good time management skills looking for above-average, long-term opportunities.
  • Devote time and effort to getting the appointments.

 

If you would like some additional help, please contact me directly. Other great resources can be found at the Radio Advertising Bureau’s website RAB.Com.

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