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My Medical Device Sales Career

What That Commission Plan is Telling You About the Company Culture: Meat Eater vs. Vegetarian?

Companies construct commission plans based on their culture!  Meat eating culture or Vegetarian Culture; the Commission Plan will tell you! A company who wants you to go out and slay new business and grow their market share aggressively has a Meat Eater Culture.   Their softer cousins are those companies that value a steady growth centered upon cultivating and steadily growing the business (usually through heavy relationship building of current clients), hence more of a Vegetarian Culture. 

Now don't get me wrong; there are elements of gaining new business and also cultivating and growing current clients in both cultures (they are not isolated acts only found in one culture of the other), but is the EMPHASIS that is placed on those activities that shape the core culture of a company.  The Commission Plan is built in every company to drive that core culture and is centered upon several factors:

  1. Type of product line (device, disposable, pharma, etc.)
  2. Product Life Cycle (hot new product vs. old stogy product and everything in-between)
  3. Disease State (high growth disease state like diabetes or cardiovascular vs. the obscure)
  4. Market Segment/Call Points (Physician, Acute Care, Alternate Care, Lab, etc.)
  5. Methods of distribution (selling a product direct vs. through dealers)
  6. Current Market Penetration (Leader in the industry vs. a small niche player attempting to gain a foothold)
  7. Established company vs. start-up
  8. Public vs. privately held company
  9. CEO, President and leaders at the top (Where did they come from? Were they home grown or came from companies of a different culture).  Special note; this point is key for companies who want to change their culture and will be addressed in a future article linked here. 

For now, we will center upon the Commission Plan, it embodies all those factors mentioned and more...so why not go to the bottom line and see what it tells us about their company culture? 

 

Commission Plan = Company Culture

  1. Low Base and Uncapped Commission = MOST aggressive culture (Meat Eater!).  Plan on it; if you don't move the number you will be let go...usually within months.  Bases that are typically from 45K to 55K (60Ktops)  but at plan is 150K lowest, with many top reps. making over 200K to 300K or even 400K+.  Think Ortho, Spine, new hot surgical devices, implants.
  2. Mid Base Range and Uncapped Commission = aggressive culture (they like their Meat but they prefer a vegetable or two with it!).  Bases for these jobs usually start at 60K up to 65K (narrow bandwidth) and at plan is 120K to 125K.  Please not that they say they are uncapped...but only a small percentage of the sales people over exceed plan to make 140K to 150K+.  Think Wound Care Sales or Disposable Medical Product Sales in general. 
  3. High Base Range and Uncapped or Capped Commission = Least Aggressive Culture.  They like Vegetarians that know how to plant and gradually grow their business with tender loving care.  They are paying you a large base to do the service work required to grow that business with relationship building and increasing sales as a by product of that activity.  Bases usually go from a low of 70K to 100K with the potential to make from 80K to 120K overall depending on the base start.  If an uncapped sales job,  it will be the rare bird who make 150K or 160K.  They are paying for servicing with sales growth expected, but not at the pace of their more aggressive cousins.  Think Pharmaceutical Sales or some Acute Care Medical Disposable Sales.
  4. Start Up Companies are onto themselves = Meat Eaters who eat RAW Meat and don't mind getting bloody! Their commission pattern is usually one way or the other:

 

a) Low base and High uncapped commission; even as low as 35K to 55K, but promising stock options or % commission from the first dollar of sales (which that may be what it is....you are going to sell the first dollar of sales for that company!).  It is either that method of compensation, OR...

b) Paying you a higher base of like 80K to 120K flat and you are use to making 160K., BUT they are giving you stock grants, options, a small % ownership opportunity or end of year large potential  bonus pay out determined by total company sales or performance markers.  In addition, sometimes they will offer a large payout if the company is eventually sold...you make out like a bandit!  This is a VERY AGGRESSIVE gambling Meat Eaters Culture....Hunt or get Hunted mentality!  You are not taking this type of job for the current or even near future salary plus commission earnings; you are betting on the future pay out!  It is gambling at it's finest!

 

Commission Plans are a telling story to a company's culture.  Your job is to decide what your appetite is and pick the company that appeals to your palate!  A meat eater is never happy with a strictly vegetarian plate and certainly a die- hard vegetarian will become ill at the thought of eating a side of beef!  So goes selecting a company culture that is best for you.  Knowing what you like having on your plate and understanding what your company (or future company) is serving up can be the recipe made in heaven for you! 

 

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Tags: career strategy, commission plans, company culture, company for you?

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Comment by Linda Hertz on August 3, 2012 at 9:22pm

Vegetarian...higher base..low commission and PLUS capped.  Capped is saying...let's hire people who do not wish to reach for the stars...exceed quota so much they can make a huge amount in commission....it is capped.  So your job is like #4 above but even lower base plus capped.  One needs to decide what type of culture they like to work within.  Some people are just fine with a capped commission plan, it is normally a job that you do not need to kill yourself to exceed the comission plan AND you get some family life balance.  Usually a job that 50 hours a week will get the job done and if you are good, 40 hours per week.

 

Most people making 150K to over 200K are killing the hours and are workaholics who mind, BUT are wired to work..they thive on it.  Just my thoughts and I am sure those that may not need agree!

Comment by Jack Kovatch on August 3, 2012 at 8:05pm

So how about a company with a base of $60-$65k with a capped bonus at $21k?  Dental consumables.  Any thoughts?

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