Adam Sand breaks down a three-part pay structure for inside sales: a $15-$17 hourly base, a $150 bonus per signed contract, and an "afterburner" that pays 1% of monthly deal volume once the team hits quota. The model keeps reps motivated daily and pushes hard at month-end.
Why your inside sales team stop working hard by the 20th of the month. If you want them to hit the afterburners and push for every single lead until the last day of the month, you need to use the 1% afterburner compensation structure. Here is exactly how it works.
The way that RVP teaches the inside sales position, we usually say $15 an hour, but that can be different in San Francisco or Joplin, Missouri. So what's important to remember is you want it to be enough to like get a one-bedroom apartment in the like normal people area of town and pay for a car payment on a 3-year-old Nissan Sentra. You want them to to drive to work and have a place to sleep for their base pay. So whatever that is in your market, usually around like $15, $17 an hour, something like that. And that's to make it so that it takes the bare necessities of life off the table of concern, because the personality type of inside sales is a farmer, not a hunter. And so the inside sales can't have a pure commission pay. They just tend to not work out as well as if you take the bare minimum off the table. Then this is all about Charlie Munger. He says, show me the incentives and I'll show you the outcomes. So what are the outcomes that we want? Well, we want someone to show up every day, be consistent, be on time for work, feel valid— that it's a valid thing to be required to show up and do training and be present at work during the hours that they're there. Hence the idea of an hourly wage. Two, we want them to have daily consistency. We want them to be consistent daily pursuing closed deals and taking care of customers. How do we do that? Well, we have a $150 fee or incentive every time a deal moves to contract signed. Sometimes they never touch the deal for that to happen because the outside sales sells it on the spot. Great, they got a free $150. They still have to do the job file playbook, they still have to do the lead intake, they still have to do scheduling. They still had to do the reschedule. They still had to do all these other things. They're still going to have to work with the outside sales to gather the notes after the call. Yes, they got an easier $150 in that case, but in some cases they got to follow up for 3 weeks and the outside sales did a crappy job, didn't annotate his photos, and didn't get an objection when they left the house, and the inside sales does more of the work. So sometimes they get easy money, sometimes they get hard money, but the point is every time they pick up the phone there's maybe $150 on the other end of that phone call. So they just got to think, how many phone calls do I have to make to get $150? And phone call, you could place with calls, emails, texts. But the idea is like, they want to be working through their pipeline trying to print $150 bills, which is about 1% of the price of a $15,000 roof. Now, what else do we want? We want them to run that last mile as hard as they ran the first mile. Because what happens is some people have a natural happiness set point when it comes to income. They'll go, you know what, I'm fine with 4 or 5, 6 grand a month. But if they just had to do a little bit more and they could turn that 5 into 8, That is enough to give them the extra gas to put the nitro afterburner on and push through the end of the month, which is when you don't want people laying off the pedal. You want them to take a little more business than they can handle at a comfortable pace. How do you incentivize people to put the afterburner on? We have to give them a big line to cross where if they cross the line, all of a sudden there's something big in it for them. And that's where the 1%, if they get over quota— quota changes every month because some seasons It's easy to get 40 deals in a month. In some seasons, it's like a grind to get 20. So let's say the quota is 30 deals a month between their 2 outside sales. So 2 outside sales have to get 15 closed deals each or some variation there within. Well, if they get over 30 deals, they get 1% of the total deal volume for the month. So if they sell $300,000 that month, which is about $3,000. So now they're going to go from $5,000 to $8,000, which is enough for them to go, oh, I'm at 26 deals and it's the 26th of the month. I got to find 4 more deals before the end of the month. And then every deal after that for the rest of the month, are also getting that 1% on now because they crossed the line. And then you can sometimes create double-tiered incentives, like 1% if you get over 30 deals, 1.5% if you get over 40, and 3% if you get over 50 or something like that. So you can create like real energy and excitement. So I hope that answers your question around the inside sales. So it's the minimum wage, enough to survive, $150 endorphin hits at the end of each phone call, and an incentive to hit the afterburner and push all the way to the end of the month to try and hit the milestone.
