Here at Sales Cookie, we automate commissions for clients in the fitness industry. Our fitness clients ask us “What is the best commission structure to attract top fitness talent? What is the most popular commission model for fitness coaches?” We hope this post will help you design a competitive commission structure for your fitness business!

Most Popular Sales Commission Structure:

Commissions in the fitness industry typically revolve around 3 main roles – appointment setters, sales reps (closers), and coaches. Often, a single person may perform more than 1 role, and is therefore eligible for multiple commission plans. In the example below, we have 1 commission plan for each role, plus a year-end bonus plan.

Below are typical commission structures we’ve observed in the fitness industry.

Appointment Setters:

  • Commissions are based on cash collected and vary based on whether the lead was inbound or outbound.
  • A typical commission rate of 1.5% to 2.5% for each recurring payment from inbound leads.
  • A typical commission rate of 2.5% to 3.5% for each recurring payment from outbound leads.
  • We recommend paying recurring commissions instead of flat amounts, in case a fitness client stops paying or cancels their membership.
  • Commissions are typically paid monthly, but some customers pay commissions weekly.
  • Commissions typically cease after the first year of the subscription for appointment setters (or even after just a few months).
  • Some of our clients choose to pay a flat amount per-appointment (ex: $75) or per-conversion ($125) instead of a recurring percentage.
  • Additional cash bonuses may be paid when monthly goals are exceeded. For setters, the goal can be based on either the number of appointments, or the number of conversions in the month.

Sales Reps (Closers):

  • Commissions are based on cash collected and vary per plan type.
  • A typical commission rate of 5% to 6% for each recurring payment for basic plans.
  • A higher commission rate of 10% to 12% for each recurring payment for premium plans.
  • We recommend paying recurring commissions instead of flat amounts, in case a fitness client stops paying or cancels their membership.
  • Commissions are typically paid monthly but some customers pay commissions weekly.
  • Additional cash bonuses may be paid when monthly goals are exceeded. For closers, the goal can be dollar revenue amount, a count of new subscriptions, or a count of premium / annual plans sold.

Coaches:

  • Many coaches are often fully salaried and may not receive sales commissions (especially if they are not involved in the sale process). However, it can be a good idea to pay bonuses to coaches based on client retention.
  • For this reason, some fitness companies pay commissions to coaches to keep them engaged with their clients and avoid churn.
  • The commission schedule for coaches may be longer than for other roles (ex: quarterly, annual) as this allows you to better measure retention and churn.

Typical Challenges Associated with Manually Calculating Fitness Commissions and Bonuses

  • Incorrect calculations due to the complexity of:
    • Accurately identifying the correct setter / closer / coach for each client
    • Determining if and when to pay commissions against customer deposits
    • How to handle upfront payment vs. recurring payments
    • How to adjust commissions due to a plan downgrade, upgrade or cancellation
    • How best to handle role changes, rep turnover, etc.
  • Lack of real-time visibility to commissions, leading to shadow accounting
  • Difficulty in tracking when to stop paying commissions under a recurring subscription
  • Dependence on a single point of failure / person for commission calculations
  • Driving motivation and momentum to keep reps and coaches engaged to ensure client retention and not just upfront selling

These challenges can overwhelm even the most experienced sales operations and accounting professionals, leading to disputes and churn.

Benefits of Using an Automated Solution such as Sales Cookie:

  • Automation of complex crediting, attainment, and payout rules
  • Significant reduction in time and effort required to calculate and process commissions
  • Increased agility to adjust commission structures to match market conditions
  • Enhanced incentive programs through spiffs, contests, and gamification
  • Elimination of manual generation, emailing, and archiving of commission spreadsheets
  • Real-time visibility and increased morale for sales representatives
  • Access to online and real-time commission statements
  • Centralized tracking of rep terms, conditions, and inquiries
  • Reduction of the risk of under/overpaying commissions and legal exposure
  • Compliance with accounting standards

Please visit us online to learn more. We look forward to helping you automate your incentives quickly and cost-effectively!