We are wanting to start selling 5 yr membership/service agreements. We pay our techs. on a weekly performance/ % pay method. I was wandering how a tech. would be paid on something like that going out 5 years.

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We pay a recurring spiff for all Service agreements which are automatically renewed each year. All four of our plans are paid in advance of the recurring service event regardless of monthly or annual payments. Our yearly agreements pay the spiff at time of sale and each anniversary thereafter. Our monthly agreements pay the spiff each month by dividing the annual spiff by 12 and entering that figure in the bonus under commissions for the item. You could also do this for a five year plan as long as you have a specific item in your price book for each level plan assuming you have multiple tiers.

Another note is that we pay monthly spiffs. So, if your spiff for a five year standard plan paid monthly is $120...you could simply divide it by 60 and pay a $2 spiff each month that the plan is active. As mentioned above, we pay the yearly plan bonus at time of sale which creates a spiff overpayment if the client cancels before the term. However, this rarely happens and if it does, the hassle of managing the reimbursement amount from the team member is not worth the hassle and is counter productive to encouragement.

Hope this helps.