Elite AgentEPM: Ask The Expert

Incentive structures for BDMs and how to calculate packages

Expert property management coach, Kate Benjamin of Real+, offers her tips on the different types of incentive structures for a BDM

Q: What incentive structures do you recommend for a BDM?

A: There are many incentive structure options. However, my preference is to incentivise on both volume of results and revenue generated.

Of course, consideration also needs to be given to the base package and allowances in place for the individual.

The structure must also motivate the BDM and make financial sense for the business.

I can recommend a simple structure to calculate the Annual Contract Value (ACV) of a new management the BD (Business Developer) secures.

To calculate the ACV, add the annual management fees plus the letting fee.

The BD is then entitled to a certain percentage of this first year’s revenue.

This is calculated based on secured managements (gained/ leased or collected from a competitor).

Other considerations in this package are to review the department and BD income and ascertain whether to introduce a sliding scale.

The higher the results, the higher the percentage of revenue awarded.

Quite often this will also include a ‘minimum secured’ threshold, where the BD must achieve a certain number of properties to be eligible for commission each month.

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Kate Benjamin

At REAL+, Kate Benjamin focuses on linking business needs to highly desirable outcomes around team, client engagement and rent roll growth. For more information visit realplus.com.au.