Why a Bonus Structure May not Make Sense for a Coworking Community Manager
When operators hire Community Managers, they have often been running the space themselves for some time and get really anxious about replacing themselves with someone who cares as much as they do about the business.
One way to align interests is to create a bonus structure that rewards the community manager based on revenue, or memberships closed. Before you take that approach, let’s consider the Community Manager role and determine what type of bonus aligns well with the responsibilities of the typical Community Manager.
Let’s talk about all the hats that a Community Manager might wear.
Typical roles of a Community Manager:
The typical coworking Community Manager wears a LOT of hats. Here are just some of the responsibilities a Community Manager might have on a regular basis:
Community Building
Building relationships with members
Hosting member events
Making connections among members
Operations
Onboarding/offboarding members
Keeping common areas neat/organized/clean
Ordering supplies
Making coffee (all day long!)
Opening/closing the space
Policing conference rooms and phone rooms
Handling temperature complaints and plumbing issues
Sales & Marketing
Scheduling tours
Responding to leads via email/phone
Giving tours
Following up on leads
Posting to social media
Posting to your Google My Business Page
Soliciting reviews for Google/Yelp
Finance
Managing monthly member billing, both automated and manual
Leadership
Tracking KPI’S
Running weekly team meetings
Needless to say, your Community Manager is BUSY.
Now let’s talk about what % of their time should be allocated to the buckets above each day.
I’m going to suggest 30/30/30 for community building, operations and sales and marketing with the other 10% going to finance and leadership.
Two of those buckets, operations and community building, are more about member retention than membership growth.
Most Community Managers are more responsible for nurturing leads and retaining members than on making cold calls to generate leads and driving top of the funnel activity.
In my experience, a good hire will manage leads, follow up on leads and build relationships with members like it's their job without a bonus structure. A bad hire will not manage your leads like you would even with a bonus structure.
If you are looking for a “hunter,” make sure you hire that profile. If your team member does not have a sales background - is not a natural "hunter" with training on how to hunt, they will likely not hunt because it's out of their comfort zone or they simply don't enjoy it. One of our GWA board members was giving us her perspective on the sales role and she said that they have salespeople that are so wired to sell that they want to spend 0 minutes doing paperwork. Can you imagine a CM that won't do paperwork or admin work?
There are many ways to approach compensation packages.
Here’s how we do it just as an example: We have a quarterly bonus structure that pays out 12% of quarterly operating profit. 80% of the bonus pool goes to the Community Manager and 20% goes to the functional team which includes marketing, accounting, etc. This structure rewards closing deals, retaining members and managing expenses. No extravagant member lunches to bribe members to stay!
I personally look at the quarterly incentive as more of a "thank you" for being committed to the members and to supporting this business vs. being a big carrot because of the many non-sales roles that our CMs play. As a matter of fact, my newest Community Manager is AMAZING. I had forgotten to review the bonus structure with her when I hired her. So the end of a very strong quarter came and I mentioned the bonus to her and she just looked at me and said…”Well….thank you. I would have done the same job anyway. But I appreciate it.”
If you haven't read the book Drive: The Surprising Truth About What Motivates Us by Daniel Pink - it's a great read. It talks a lot about how humans respond to incentives. I would suggest that you have a “predictable” incentive with a formula that the team understands... But also save a budget for unexpected “thank - you’s” when your team goes above and beyond the call of duty.
That being said, your manager likely needs to be trained to close leads and your systems need to be set up to have accountability around lead follow-through. Make sure it's super clear how she should be spending her day. For example, X% of the day should be spent on interacting with members; X% on lead follow up, X% on keeping the conference rooms clean, etc. I have had Community Managers that naturally gravitate to the “member relationship” hat and spend as little time as possible with the “marketing hat” — which is not the right balance.
One of my Flight Group members shared the following: “Our space has a Community Manager and a Sales Manager, so our CMs are incentivized on overall performance of the business and our Sales people are incentivized on hitting the revenue budget. Sales Managers are wired to “go go go” (if you don’t have one that is a go…go…go type, then you may want to reconsider). Our incentive is fixed for each quarter and based on minimum 80% of revenue achieved, the Community Manager and Sales Manager are eligible for portion of the defined bonus. They need to hit 100% to get 100% of the bonus.”
He added: “We have noticed CM going after Meeting and Events revenue to help push that overall revenue each month.”
Ultimately, how you compensate your team is a personal decision that will be based on the market conditions in your local area, which “hats” you want your Community Manager to focus on and your experience and experimentation with compensation packages that work for you and your team.
What is your experience with Bonuses for your Community Manager?
We’d love to hear from you in the Everything Coworking Facebook Group!