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How to Compensate a Salesperson for your Property Management Company | The Property Management Show

1d ago
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Hello and welcome to The Property Management Show. WEBSITE: http://everythingpropertymanagement.com/ Property Management Marketing: http://fourandhalf.com How to Compensate a Property Management Salesperson The topic today is how to compensate a salesperson for your property management company. If we have a chance, we’ll talk about when you should hire that salesperson and shed some light on how to find and interview and retain the best salespeople for your property management shop. Our guest is Duke Dodson who runs Dodson Property Management. He has one of the fastest growing property management companies in the U.S., and he’s uniquely positioned to talk about this. Q: Thanks for joining us, Duke. Tell us a little about your company and your story. When did you first decide to hire a salesperson? How far along were you in your growth trajectory? A: I started my company in 2007. It was just me, so I was the business development person and the salesperson. When I got to the point that we had 300 units under management, I hired the first salesperson. Q: Do you mind if I stop you and ask how long it took to get to 300? A: It took about three years. I decided to hire someone because I was a good salesperson but not a great one, and I was doing business development and sales 10 to 20 percent of the time during the day. I knew if I could find someone to do it better than me full-time, I would grow. I was averaging 100 units a year when it was just me, and then when I brought in a salesperson, that growth went to 300-plus units a year. Q: There is something to be said about setting up systems to be able to accept this kind of growth. For most property managers, growing by 10 properties a month is a good goal. So 300 a year is a great launching pad. I don’t know of any information in NARPM or the general property management industry that talks about sales compensation. So how did you come up with a strategy? A: There was no roadmap early on, so I had to make it up. I looked at the type of person I wanted in the role and then I had to figure out the compensation model that person would be comfortable with. It’s rare to find someone with property management experience and sales experience. So unless you’re going to poach this person from another company, it’s going to be difficult for a property manager to find a salesperson with experience in single family management. I looked at other salespeople I might want to attract. Pharmaceutical and medical sales seemed the way to go because these are high energy, results-driven professionals. So I looked at those models. Some had a small salary plus commission and others worked solely on commission. I liked those models. So with our first salesperson, I provided a straight commission and no salary. I built it so that if he did well in the first year, then his compensation would increase in the second, third and fourth years, so it would be hard to walk away. He could earn a great income if he performed. Q: So you used a recurring compensation plan. He got to eat a bit of what he killed over time and each account brought him a percentage. A: Right, if he brought in a single family home for us to manage, he earned 25 percent of all the revenue associated with that property for one year. Then if he retained the property under our management in year 2 and 3, he’d continue to earn 15 percent. In year four, the commission would drop off. Q: That’s a lot of money. A: I learned that the industry standard was similar to that, and I also learned that you get what you pay for. If you want that top notch rainmaker, they will need to make a good living and you’ll have to compensate appropriately. But you may not need a rainmaker. If you’re getting a lot of warm leads from SEO and content, you don’t necessarily need a rainmaker, you need someone with good sales structure and organizational skills who can do presentations. That person doesn’t need to make $150,000 a year. You’ll find a good...