Building Better Construction Sales: How to Create Your Sales Team Commissions for Success

Mike Hepper

In the construction industry, there are many different types of sales jobs. You can focused on different parts of the business, including roofing or General Contractor sales which could be around renovation, roofing, painting, new construction, or residential sales.

It can be hard as a construction company owner to know what to pay your team to keep them incentivized. Let’s dive into different types of commission that could make sense for different areas of sales.

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Residential Construction Sales: 

For areas of residential construction, I’ve seen companies that pay base and commission or solely commission.

For the base, it can range anywhere from $18+ plus 1-10% of the project.

Residential projects tend to be lower paid due to project value and volume.

This is why company owners tend to opt for higher commission structures than base pay, so they only have to pay a chunk once the project comes in.

Commercial Construction Sales:

This is the area where you generally see the sales guys get paid the best due to the value of each project that comes in.

These guys get a good base, normally 60-100k+ commission which can be 1-2% of the total project or profit depending on how heavy your base is.

Commercial construction sales jobs tend to have bigger opportunities, but it can take awhile to land the project once you bid it out.

This is why they tend to have a heavier base than other construction sales jobs.

Residential Roofing Sales:

When you're a roofing sales professional there are many areas you can get clients including working residential projects.

For residential you might be going door to door, handing out flyers, cold calling, or handing a list of hot leads everyday.

Common ranges I’ve seen include 5-12% of gross sales or 30-50% of profit per job. These tend to be more commission based only, so you need to give a good deal to your guys or they will find a better one.

Commercial Roofing Sales:

When working commercial projects your team can get bigger projects and more repeat customers.

This is more profitable for the business owner which means these guys should eat more.

Again I’ve seen people pay out their sales guys 5-12% of the gross sales, but in many cases I’ve seen these guys have a base pay.

They add base pay here because they realize how much time it takes to break into a commercial account, the jobs bring in more profit, and they can actually pay their guys less then they would if it was only commission based.

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Overall, as a construction company it's good to incentive your sales guys to win the projects at all costs and having uncapped commission will keep them hungry.

With any commission structure it's important to dig in more to your company's cash flow and see how much you can afford to pay your team. Figure out what makes sense for your company goals, revenue and team specifically. Use the flexible life of a start-up to your advantage.

Understanding Your Market

The success of any startup relies heavily on understanding the market it operates in and identifying the ideal customers within that market. Understanding your customer and becoming a subject matter expert is key, especially at the formidable stages.

By having insight into potential customers, you know what problems you should be solving with your product and how to communicate in a way that appeals to them.

The market is the broader industry that you serve. The ideal customer dives deeper into who your product is the best fit to serve. It's a way to segment your customers.

You might not know who your product best serves yet, and that is okay, but it's important to hypothesize and test who is.

Make some assumptions about what would make a customer a good fit for your product and test those assumptions otherwise, use your current customer base and data to guide you.

Here are some of the key steps to understanding your market and identifying your ideal customers:

Understanding Your Market

1. Research industry trends and news: Stay updated on current and emerging trends in your industry. Search Google news, read articles and follow the right people on social media to gain insights into customer preferences and potential opportunities.

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