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Profitable Times Newsletter

Sales Incentives and Commissions

Let's begin with the understanding that most museum stores do well without incentivizing their staffs beyond simple gestures expressing a sincere thank you.

A commission is a type of incentive. Most often commission refers to monetary compensation paid to the store staff based on a percentage of the sales price or a set amount for selling a product or membership. Incentive is typically used more broadly to describe a commission and many additional forms of remuneration including discounts, gift cards, passes to activities, etc., many of which are addressed below.

There are several things to think about regarding incentive programs and they are threads through this discussion.

  • Are store management and other non-sales personnel eligible for team incentives? For example, the buyer and someone who merchandises and creates displays for the store have a heavy impact on the store's success.
  • Non-commission incentives are often paid because their worth can be perceived to be more valuable than the monetary compensation that is the result of a commission calculation. What types of incentives do you think your staff will value most?
  • How do you manage the potential downside of commissions triggering overly aggressive sales tactics?

Some guiding considerations, generally applicable to both commissions and incentives, include:

  • Make it fun.
  • Adhere to the K.I.S.S. principle — Keep It Simple and Straightforward.
  • Some incentives can be always available, others can be used for targeted events and some can be a surprise.
  • The best commercial enterprises share success. This is certainly true, but helping a cultural institution meet its mission is often compensation enough, especially for volunteers.
  • If you're providing incentives it's more impactful and motivating to do so as quickly as possible after they have been earned.
  • Incentives on individual sales or actions are easier to manage than rewarding a team based on an allocation formula. Team incentives are a worthy goal but it may cause problems if a team member isn't carrying their weight. Posting progress helps to keep everyone focused on the common effort.
  • It's okay to set minimal qualifying goals but be careful if the goal isn't attainable because of reasons over which the staff doesn't have control, for example, a special exhibit drawing fewer visitors than expected.
  • Incentives must be measurable and manageable. Basing the commission on top line numbers, i.e., figures that are the least affected by adjustments, enhances integrity. For example, if you are basing a commission on the overall performance of the store it's cleaner to make it a smaller percentage based on Net Sales than a larger percentage based on Net Profit. The reasoning behind this is that between Net Sales and Net Profit are many expense lines on which the sales staff has no impact and could feel the management of these expenses negatively impacted their commission. This can also apply to the sale of original art, jewelry and other higher-priced items, by basing the commission on the sales price rather than a number net of related expenses.

Impactful perks for an individual or team members can incorporate some of the following:

  • Make it exciting.
  • Cold hard cash.
  • Something a staff person wouldn't normally do for themselves.
  • Discounts on merchandise with as few restrictions as possible as to which products are eligible. Old and known slow sellers should not be among the possibilities without being very deeply discounted to start with.
  • Museum café and store or third-party gift cards.
  • Free parking.
  • Staff party. If you can afford it, hold the party in the home of a senior museum administrator or board member, or at least away from the store.
  • Extra personal time to be used any way the recipient chooses. It can be a day off or the chance to sleep in or leave early.
  • Does your museum have an event venue to which it controls the ticketing, or can you distribute promotional tickets?
  • Random acts of kindness, especially those tailored for the recipient. This, plus the element of surprise is a well received combination.
  • Give them what they really want. First, ask the staff what they would like and then tailor the perk to what an individual listed or let them choose from a smorgasbord of choices. This reduces the chance that what you think is an attractive perk is seen differently by your staff, and who knows, their ideas may be easily and inexpensively implemented.
  • Incentives for the sale of memberships can be relatively generous because of the potential of far-reaching and long-term benefits to the museum.
  • Don't underestimate the value of recognition delivered by someone the recipient may not have even realized had noticed.
  • Specific and clearly stated goals are critical, but they don't have to be based on just revenue. Rewarding high average transactions or number of units per transaction may move the store closer to its revenue objectives and allows a part-time worker, who has less opportunity to generate overall numbers, the opportunity to win.
  • There is little the sales staff can do when visitation is slow, so focus most incentives on busy times when there is the opportunity, as the idiom states, to make hay while the sun shines.

Remember, it's your responsibility to determine if incentives are legal, allowed within the regulations and guidelines of your museum and if volunteer salespeople are eligible.

 
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