Simple thought here for anyone who hires or manages salespeople. We always recommend reimbursing outside salespeople through mileage as opposed to a monthly allowance. <\/p>\n
Simple psychology here:<\/p>\n
Allowance Reimbursement<\/strong> – you are paying the salesperson a set amount of money every month regardless of their travels. Now the salesperson may look at travel as an expense the dilutes their personal profit margin. They make more money by traveling less which is anathema to selling. Yes, it is good to encourage them to be frugal in their travel so they don’t go on a shake-and-howdy bender – better to qualify prospects thoroughly before scheduling a visit. <\/p>\n I don’t like the subtle reinforcement of limiting their travel (and thereby their prospect visits) in order for them to pocket more money.<\/p>\n Mileage Reimbursement<\/strong> – you are paying the salesperson for every mile they drive. If they drive more (hopefully visit more prospects and customers), you pay them more. Yes, they can game the system, but it is simple to verify where the salesperson has been if needed.<\/p>\n I like the subtle reinforcement of encouraging them to see more prospects.<\/p>\n I could be wrong but these are the strong points that resonate with me when we are helping our clients craft a sales compensation plan. Still, we have clients who prefer the allowance approach.<\/p>\n","protected":false},"excerpt":{"rendered":"