Example of Percentage Based Commission Structure
- You have 2 employees
- Hours are Monday–Friday: open for sales 5 days per week
- Current month is June: there are 21 “work days” (number of days the club is open this month)
- You only sell 12-month membership types at $30 per month
- Employee A works 14 days in June
- Employee B works 7 days in June
For the month of June, you set a realistic goal of gaining 15 new members!
First, you are going to want to figure out how many members each employee is responsible for signing up. This is not a guessing game, there is a formula used to calculate your goals.
Total Monthly Goal / # of Work Days = # of Members to Gain Daily
15 members / 21 work days in June = 0.71428 members per work day
Once you know how many members need to be obtained each day, you can continue on to figure out how many members each employee needs to sign up.
# of Members to Gain Daily x Number of Days Each Employee Works = Individual Goals
0.71428 x 14 work days = Employee A’s goal is to gain 10 new members
0.71428 x 7 work days = Employee B’s goal is to gain 5 new members
How to Pay Out Commission
Hit Full Goal: Collect 3% of the annual membership cost.
Hit AT LEAST Half of Goal: Collect 1.5% of the annual membership cost.
LESS THAN half of Your Goal: Collect no commission.
We recommend paying commission once at the end of each month. You need to know how your staff is going to finish off the month.
3% of $360= $10.80… If Employee A sells 10 memberships, they would earn $108.00 in commission for the month.
1.5% of $360= $5.40… If Employee A sells at least 5 memberships, they would still earn $54 in commission for the month.
The purpose of setting goals is to have something to strive towards. As we previously mentioned, the monthly goals you are setting for your staff should be realistic in correspondence to the specific month. Paying commission can sometimes feel like you are “giving away” your money. But, having goals in place and paying commission could result in your club gaining more new members than usual, as a result of having a motivated staff.
All gyms are different and a commission structure may not work for everyone. One thing that will always be the same for any gym is that in order to be profitable, you need to have paying members. For more ideas and guidance on successfully filling your club with paying members, contact us today!
