Have you ever seen a sales force view commissions more as Social Security checks than as a reason to drum up new business? Rick Johnson has. So when he founded BurJon Steel Service Center Inc., in Springboro, Ohio, he made some changes.
Tired of seeing some salespeople live off old accounts, he decided to eliminate commissions on accounts once they have been with BurJon for one year. The client becomes a house account, still serviced by the original rep, but money goes into companywide profit sharing instead of into commissions.
Johnson reads weekly call reports to ensure that house accounts remain will cared for. Though commissions cease, reps who do good work with old clients can receive year-end bonuses -- of as much as $10,000 -- and salary adjustments.
The big money, though, is in new customers, Johnson says. "There is unlimited commission potential here, but you've got to write new business to exploit it."
Overall, the system seems to have worked. The company's revenues have risen from $1 million in 1980 to $20 million in 1987.