How to Negotiate Salary as a Sales Rep
Learning how to negotiate salary can be a game changer. Sales is one of the most exciting industries in the world.
If you understand how people operate, you can learn to sell anything. Being able to get around objections and move people to close is a skill set that can earn great money.
That said, the pay for reps is all over the map. 100% commission, salary + bonus, and (the most common) salary + commission.
Unfortunately, the pay structure we see most often can depreciate over time—making it necessary to learn how to negotiate salary.
Much like the things you sell every day, this will take some skills (many of which you already have).
The difference being that the product is you and the customer is your employer and that means you’ll need to consider both before entering the arena and coming out the other side with the raise you (hopefully) deserve.
For reference, here is an infographic showing the average sales representative salary.
In today’s post, we’ll talk about the three stages of learning how to negotiate salary including:
How to Negotiate Salary: The “Prep” Stage
A few factors need to be considered before you ever call the meeting with the person in charge of your money.
Ok, I’m sure you’re a fine salesperson. But do you really deserve a raise?Just because you don't like the size of your paycheck doesn't mean that you can just get a bigger one Click To Tweet
There will need to be a little introspection to see whether or not you’ve been pulling more weight than your bank account says.
- Know and Hit Your Numbers: Check to see if you’ve been meeting quota, or at least outperforming everyone else on the team. Don’t just hit them, but keep accurate track for several months. You’ll come across as unprepared if all you can say is “I sell good”.
- How Long Have You Been There: If you want a raise within 90 days, you may be jumping the gun. It takes time to prove yourself to your supervisors and a few months ain’t gonna cut it. Bare minimum—be there for six months before you go asking for a salary increase.
- How’s The Turnover There: If everyone around you has been at the company for less than a year, it may tell you to just look elsewhere instead of negotiating. If they can run through people like that, it’s likely that you’ll get canned for asking for a raise.
Don’t fly blind into this conversation. Take some time to understand the market you’re in and the hard data for your request.
There are a few things you can do to be fully prepared to make a formal argument for an increase.
Doing this research could even prompt you to negotiate, or not.
- Average Income Data: Look at the income levels of your state and the area to compare how you’re stacking up. If you’re running far lower than average, it may be time to ask for an increase to keep up with cost of living.
- Average Sales Salary Data: Sales reps all over input their data to places like Indeed and those sites compile it for us. We even put together an infographic that shows you the average sales reps salary by state. Compare with the average income.
- Know Your Pay Structure: The first answer you may hear is, “sell more”. In many cases this is possible, but there are structures that will cap your income or make it next to impossible to increase your wage enough during a 40-60 hour work week.
- Know What You Want: Figure out how much it is, or other things that you’d like to see happen. Find a range so you can budge a little bit during the talk, or find alternatives if the money isn’t there (e.g. turning a bonus into your salary to save on taxes).
Bonus Resource: Here’s really one of the best guides to help you determine if you’re getting paid a fair wage. It’s from the folks at FitSmallBusiness.
“The most difficult thing in any negotiation, almost, is making sure that you strip it of the emotion and deal with the facts.” – Howard Baker
How to Negotiate Salary: “In-the-Moment” Stage
Now that you’re studied and prepared to enter the arena, you’ll still need to know and understand some basic tactics that will make the biggest impression and (hopefully) get you that increase.
Tip One: Actually Do It
Seriously, it may sound appealing and even need to be done, but the thought of negotiating your salary may give you some reservations.
The truth is that most employees never initiate a conversation about pay, but the majority of companies say that they’re open to salary negotiations. Primary reasons for workers not wanting to ask are things like:
- Fear of getting fired (this is the number one reason)
- It’s not fun (this one shouldn’t bother sales folks as much)
- Lack of confidence (again, something most reps shouldn’t have an issue with)
So get in that office and make your requests known.
Tip Two: Do Your Pitch
Tell them what you want and why you want it (using the research you’ve done), but don’t be rude.
Explain and be honest about your desires and needs. Don’t be rude, take out the emotion and present it like you would any other pitch.
Just know that you are what you’re selling. Don’t bash the current pay structure, just state why it causes you to need a base salary increase and leave it at that.
Tip Three: Be the First Number In
You’ve seen the movie where someone writes a number on a little piece of paper and slides it across the desk, right?
Don’t do that, it might get you fired. But you should make sure the door is closed, or that no one else can hear you before you actually say the increase you want.
Be the first to give a number. It’ll help you set the bar and move down a bit from there.
Example: Let’s say you’re an SDR and get paid $30k base salary and a commission based on qualified appointments. Even the best reps (which you should be) only make about 30k in commission annually. If you live in a state where the average sales rep salary is $65,ooo/year, you want that extra 5k.
Ask for $7,000-$8,000 extra in salary and be comfortable taking $4,000-$5,000.
If it’s on your salary, you’ll probably pay less in taxes than you would if it was a bonus or commission.
When your boss speaks first, he/she could offer you $1,000/year and adding several thousand to that is a stretch; get your request in before he/she does.
Tip Four: Make Sure You Get Something
To be clear, you may not get a raise. It’s less likely that you’ll get the exact number you had in your head.
But that doesn’t mean you should leave without getting anything.
Many other things exist that can help you save money, or at least enjoy your job more. Here are a few.
- Promotion/Job Change: You may not be able to make more as an SDR, but may be able to become a closer with more potential for commission. Or, you could take on a sales manager role and get that extra salary with a few more responsibilities.
- Better Benefits: How about another week of paid vacation? This would be the equivalent of a week’s pay without having to work. Or, you could ask to remote work one day per week at home and save gas and have less stress.
- Better WorkPlace: You could also ask for tools and other things that make the workplace better. There are tools that help manage and even collect leads to increase sales, ping pong tables for breaks, or even snacks or other team-building things to consider.
- Better You: There are things that could make you a better salesperson. It could be training, books, or even clothing. Suits and ties (if you’re an in-person rep) can be expensive and maybe your company could offset some of those costs.
How to Negotiate Salary: After the Negotiation
Once you negotiate (and hopefully come out victorious), you’ll be under surveillance.
A thousand good things and met quotas before your conversation can be forgotten with one slip up after you get what you want. It may sound crazy, but you should full on consider yourself in a probationary period after you get your raise.
Most supervisors aren’t going to be angry, but anything that pops up on their radar about you will make them wonder if they made the right decision.
So, keep on doing everything you can to improve your performance, the performance of your team and the company as a whole.
In fact, it may help you to seek out new ways to help the company.Suggest changes and implement tools that can move the needle in the right direction. Click To Tweet
Figure out a couple of ways to save money, earn more, and prove that the pay increase was the right decision. It may be a good idea to have a few of these ideas before your negotiation and deliver them before and after the talk.
If you’re a B2B, you could suggest us! 🙂
How did you learn how to negotiate salary as a sales rep? Have you ever tried to negotiate your compensation?
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