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CompensationMaster Case Study, April 2005 Margie Spence
has been using CompensationMaster's software for more than 13 years. First
introduced to the software as a branch manager for Royal LePage, which
implemented CompensationMaster's system company-wide in 1992, she continued
using it when she bought the branches she had been managing and became the
broker/owner of Royal LePage Niagara Real Estate Centre.
In the six years since Spence went out on her own, her firm has merged with or
acquired six companies, increasing the number of branches she manages from three
to 13 and the number of agents from 55 to 327.
"I started using CompensationMaster when Royal LePage first brought it on, and
found it very valuable in putting the compensation plans together and doing the
budget," says Spence.
"I like to know where I'm headed. I can't control the market but I can control
my expenses," explains Spence. Every year, Spence enters all of her company's
expenses into CompensationMaster's software and prepares a budget for the coming
year. At the end of the year, she compares the profit and loss statement she
receives from her accountants with the budget in CompensationMaster. She
evaluates where she went over and under budget, and adjusts her compensation
plans as necessary. "If I've been more generous than I should have been, I tweak
my compensation plans here and there," Spence says.
Spence also uses CompensationMaster's software throughout the year to monitor
the company's progress and help manage cash flow. "There are certain times of
the year when we have high cash flow, and then it depletes," states Spence. "Or
if we're not doing as well as I expected I can go back and look at previous
years. I can see these trends with CompensationMaster."
"We also use CompensationMaster when we're recruiting people, and we're
recruiting a lot," says Spence. "When you've got the agent who wants to come
over from a competitor and they say 'If you give me this or that, I'll come,'
you can put their wish list into CompensationMaster. Then you see the red line
at the bottom going off and you know it's not going to work. So you try to
customize something for them." While Spence is willing to get creative to
recruit new agents, she requires that they move to one of her standard plans
after their first year.
Spence offers 14 standard plansthe same 14 as when she launched the company in
1998—plus 16 more, mostly the result of agents—who wanted to stay on their
existing plans after a merger or acquisition. Spence explains that although some
agents find it advantageous to switch plans right away, "We always offer to keep
them on their existing plans until their anniversary."
"Our agents like the variety of plans," says Spence. "They have a full range of
plans to choose from. We have work-at-home plans, cash flow plans, high-split
plans; there's something there that will suit anyone."
Spence's agents understand that the plans she designs have to meet her
profitability standards. "They know the company has to make a profit," she
explains. "It's good for everyone—as long as you don't make too much profit."
Spence also takes advantage of CompensationMaster's ability to analyze merger or
acquisition candidates. "What I like to do when we're taking over another office
is take their existing plans and see how that's going to work under our plan. If
it's a smaller company—and most of them have been—then it's manageable to put in
expenses and make it like it would be your own. If someone is asking $100,000 or
$200,000 for their company, you can see if it's worth that. We're not always
able to have access to all that information prior to making an offer, but it
sure can help when you're trying to make your numbers work."
"I would absolutely recommend CompensationMaster to other brokers," concludes
Spence. "I couldn't possibly run the company without it. I'd never sleep. It's a
great system and it works for me."
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