Commission for Appointment Setters?

Commission for Appointment SettersCommission for appointment setters is a common question when setting up the sales processes for new organizations.

"What is the best commission model when hiring a sales person to sell digital marketing services to small businesses?" was asked on an expert platform I'm a member of.

The asker went on to explain that the owners of the business will handle the consultation and closing. So it wasn't a "sales" role...it was phone prospecting...appointment setting.

I've set up agencies for commission sales teams in the management consulting field.

Issues with Commission for Appointment Setters

[I wrote the following in 2015] Finding people to work entirely on commission was possible pre-2008, but nearly impossible after 2011. The level of skepticism, coupled with people holding PhDs and psychiatry degrees realizing they shouldn't be trying to duck into being telemarketers until their practices pick back up, lead to a huge drop-off in the number of candidates.

I also hired firms specializing in finding commission sales candidates, and they were unable to provide me more than a couple of resumes of people who did not stick. To be fair, this was in 2012-13 and their situation may have changed by now.

However--with the minimal buy-in, loyalty and typically abysmal investment in training the hiring company provides, it is in my opinion not worth traveling down that path.

The candidate doesn't really have a reason to stick around. Any time a regular wage job is put in front of them, they'll jump. And most never wanted to be making calls in the first place.

I know several business owners who run "boiler room" type operations and they are constantly juggling and struggling with staffing. Callers go to lunch and don't return. They don't show up. And this is when paying the callers a wage! From my perspective, it wasn't worth the hassle.

Perhaps you'll find someone who has the commitment, the drive, the energy and the talent to be a good commission appointment setter. As far as I'm concerned, that would be like winning the lottery.

Two more thoughts.

First, to attract someone into a role like this, you really have to be paying an hourly rate. I'd skip commission entirely. Your retention will be much better, depending on how well you screen candidates.

Second, if you're going the commission route, the rate has to be big enough to be worthwhile. Yes, maybe 5% IS an appropriate *percentage* of the sale to give an appointment setter--but is it a significant-enough amount of *money* to be worth the person's time?

You'll have to figure this out with your own numbers and see if a person can really make a livable wage out of your numbers.

After all, they don't get paid unless the owners do their job, too. If they don't sell, the setter doesn't make anything. Personally, I would not want to hand my financial fortunes over to someone else like that.

Is Your "Game" Rigged for the Setter to Fail?

Can the setter really make the number of dials necessary to succeed?

Let's say your service is priced at $5000. 5% of that is $250.

I don't know what the livable wage is in your area--in NY and LA it's going to be much higher than, say, Portland, OR or where I am in Wilmington, NC--but let's say the setter needs a good $2500 a month to scrape by.

That's $2500/250 = 10 sales.


Not 10 appointments set.

We still have to back into that number.

Now if you're the owner, or the person doing the selling, how good are you?

Most people overestimate their competency level. They believe they're going to close almost all of the prospects who come their way. Not so!

Not even half.

Let's say, generously, 1 in 3.

Maybe your setter does a bang-up qualification job (Secret: that's what you're really paying them for) and you really can close 1 in 2. But let's go 1 in 3 and I still think that's generous.

So now your setter has to bring you 3 X 10 = 30 leads every month.

An Overlooked Factor in Commission for Appointment Setters

How long's your sales cycle?

Hadn't thought of that, had you!

Will Your Setter Survive Month One?

That means you're going to have to back out the final of these 30 leads to the date that leaves enough time to finish that cycle before the month expires and our poor setter runs out of time to make their revenue target.

See what I'm saying?

What this translates to, in English, is your setter's probably going to have a pretty bad first month.


Because they're filling the funnel.

Unless they go nuts, like aiming for 60 or 90 or 100 leads to cram into that funnel, the odds of enough getting through the sales cycle and closed and paid so they can be paid is low.

So let me ask you this:

If you work hard for a month and at the end things look terrible and you didn't make the money you expected--despite your effort being "on target"--

how do you feel?

Like you want to quit, right?

Unless you want a rotating door of setters, I strongly suggest you set up the equation to it supports your hire and gives them the time and financial reward they need to succeed. Which means they HAVE to survive through to that second month...keep putting in the effort, and seeing the good results appear.

Number of Dials Needed to Earn Commission for Appointment Setters

Back to the math...

To get those 30 leads (and remember, that is when the sales funnel is FULL, and your setter is continuing to load more leads into it to keep it full, and you have many prospects at various stages of the pipeline--not just at the beginning), how many people does your setter have to call?

We know, on average, that only 1 in 4 prospects dialed will be ready and available to talk today.

So 30 X 4 = 120 is your setter's ultra-basic, bare minimum number of dials. And really, I bet it will end up being double or triple that.

Does your setup, and your setter's situation, support them being able to make those dials?

And remember, this is with a decently mid-ticket offer of $5000. If your price is actually lower, the number of leads and dials are going to be much higher.

These calculations will of course vary depending on your situation. My intention here is to give you a sense of what's involved and where the perils are.

Just remember: Dials >>> Leads >>> Sales

2021 Update:

The original post was written in 2015. The current update for commission for appointment setters as of 2021 is this... the same rules apply. An organization I did some work for recently hired a returning-to-work mother to do what I would call luke warm calling—the calls were not cold, but they were not quite warm, either. Lead reactivation was the focus. She was highly skilled and "overqualified" for the role. Also, she had little phone experience.

The Outcome of This 2021 Appointment Setting Hiring Decision

I was not much involved in this decision and provided some scripting assistance. The fact is that she did not last one day in the role. No better example of the principle, "Perception Is Reality" than this has come up in the past while: to her, these were cold calls. She was not prepared for what she perceived as the loneliness of the role. The takeaway for you in 2021 is: filter for people who understand what they're getting into here, and like it. Do not take people who come along, even if they look good from a skills point of view. "They'll grow into the role I imagine at a step above this one" is not something to bank on. And the simple math we discussed above continues to apply.

>> Jason Kanigan is a worldwide authority on cold calling. Want his help? Visit the corporate services site here. <<


How Much Time Should You Spend Prospecting?

How Much Time Should You Spend ProspectingHow much time should you spend prospecting? Nearly any sales trainer you ask will answer, "More than you are now." And they're right. But in a quantifiable number, what does that mean?

[first published April 9, 2014]

Two approaches spring to mind. One is more scientific than the other, but they'll both work.

An Easy Approach To Answering How Much Time Should You Spend Prospecting

First, an easy-to-apply system of dividing up your time depending on the maturity of your business. Prospecting is the act of picking up the phone or going to networking events or doing anything that can directly get you into a qualifying conversation with a prospect. Fulfilling is doing the work you promised to do so you can earn your revenue. Marketing is writing free reports, setting up autoresponder systems, sending direct mail, and anything else that is passive in its approach to attracting prospects to you.

Maturity Prospecting Fulfilling Marketing
New (0-12 months) 75% 15% 10%
Established (12-24 months) 50% 30% 20%
Mature (24 months+) 35% 35% 30%

Surprising? Consider: in the beginning, no one knows you exist. You have yet to develop the reputation as "The person to talk to about X." No referrals will be coming in.But 12 months into the business, should you survive, the situation will have started to turn. People you have never directly spoken to will have been sent to you by someone who heard about your business from a past customer. You will get some orders more easily; it won't be necessary to spend as much of your time prospecting.

However, you can never, ever, cut prospecting activities out entirely. You must always be talking to new people.

And in the beginning, what else do you have to do? Don't stop just because you got an order.

Keep filling the funnel.

"How do I do that?" Get the 10-year-proven SALES ON FIRE - Module One program that teaches you how to prospect, qualify and close...for just $1 with this special offer!

The Precise Method for Determining How Much Time Should You Spend Prospecting

Second, we can determine the number of dials we must make to reach our revenue target. And it will always be more than we had vaguely thought. A lot more. But that number will come down as we move forward. We'll become more competent, and sales will come in from referrals, direct marketing, talks and other lead generation methods.

We covered the exact method for figuring this out in How To Succeed In Sales.

You'll be shocked to learn that hitting your revenue target will likely require 5 hours of your day at the beginning. Again, though, what else are you doing? You don't have projects. Marketing is passive and slow. It won't get you the conversations you need to make sales and earn that revenue. Waiting around will only produce month-end panic and, sooner or later, failure.

How much time should you spend prospecting is based on the maturity of your business. If you are well-known, have great brand awareness in your marketplace leading to a ton of inbound leads, are receiving a bunch of referrals every month, and have money in the bank to cover upcoming expenses, then you can afford to ease back on the prospecting gas pedal. Otherwise, slam that pedal to the floor and it's Full Speed Ahead!

2021 Update on How Much Time You Should Spend Prospecting

Reality hasn't changed for prospecting activity in the seven years since this post was first published. Whether you're a business founder or salesperson, you must commit to finding and developing your own leads. You cannot rely on magic thinking or the company to do it for you. Not taking responsibility for prospecting will lead to an empty funnel. And failure to focus enough time to it, which is always more than you think or would rather be doing, will result in the long term failure of your business or role.

Many people believe their employer will provide enough leads. But we have seen over many years the constant mismatch of prospect leads provided by the marketing department with the requirements of the sales department for what makes a qualified lead. Frankly, we have discovered marketing leads hidden under the keyboards of salespeople at their desks: not a fit, and pushed away.

The salesperson is running a mini business-within-a-business, a founder of their own destiny just as the founder of an entire business is. You cannot leave lead generation and filling your funnel to chance. Set enough time aside for prospecting starting today.

>> Jason Kanigan is a sales force developer. Get the proven SALES ON FIRE - Module One program with this special offer <<


When Should I Fill Out the CRM Info?

When should I fill out the CRM info for a prospect?

This common question needs a clear answer—and sales managers, you'll appreciate this post as a place to point your people to for the solid answer.

Over the years as a consultant to sales departments large and small I've seen two different answers to this question in action.

when should i fill out the crm info confused salesperson question business development staff woman raised hands struggling

Photo by Yan Krukov from Pexels

The first has the business development or sales person putting the data entry off until later.

The second features the bizdev or sales executive getting that data into the CRM right now.

Having worked with countless organizations and seen the difference in effectiveness of these two approaches, I can tell you this:

Put the info in the CRM as you go.

Hazards of Not Entering the CRM Data Immediately

Don't chicken scratch it on a pad and then think you'll go back later and dump it into the program. You won't. Do it now and get it done and out of your mind. You'll thank yourself for developing this habit.

Those who leave the data entry until later run the risk of constant low level, nagging worry. The job is out there, still needing to be done. And what if your boss needs that info? If it's not in the system, it doesn't exist. Remember that. No matter how deep or powerful the information you discover about a prospect is, if no one else can access that data, you may as well have never uncovered it.

So get it into the CRM, now.

An Alternative Answer to "When Should I Fill Out the CRM Info?"

This is for salespeople, especially outside salespeople: if you are an awesome closer, and hate doing this "paperwork stuff", consider asking your boss to hire you an assistant. No kidding—it could save you and them a ton of expensive time and frantic worry. That data HAS to be in there so your manager can quickly see progress and status, and know when to ask questions and offer help. If your time really is better spent talking to prospects, then it should be a no-brainer for your boss to get you an inexpensive assistant to help with the data entry.

If you're an independent hired gun, consider hiring a VA for yourself. You'll probably be shocked at the time and energy they recover for you, doing tasks you believe are dull but they find rewarding.

>> Need help with your business development, sales or CRM process? Book a problem-solving consultation with Jason by clicking here <<