Most agencies want their employees to get involved in developing new business, but how do you properly reward them when they do? That’s the subject that Chip and Gini explore in this week’s episode.
Gini says the key is that “you certainly want to incentivize people and incentivize them at a level that they want to participate in business development and can participate in business development, but also not eat into your profitability.”
Whatever plan you come up with, Chip advises, “you have to have a policy in writing on something like this. Anytime you have a commission scheme involving employees, put it in writing, so that there’s no misunderstanding.”
Chip also says that agency owners need to remember that “whatever you’re incentivizing is what you will tend to get, and so if you are incentivizing revenue, people will do whatever they can to acquire that revenue, regardless of how profitable it is.”
Gini underscored that “this is another situation where it depends, and it depends on who’s on your team and what they’re motivated by.”
In the end, the best principle may be to keep it simple because “you don’t want it to be so complex that nobody understands it,” explains Chip.
[read the transcript]