Most Wisconsin roofing contractors are bleeding profit through a compensation model that rewards mediocrity just as much as excellence. If you are still paying a flat 10% commission across the board regardless of lead source, margin, or volume, you are essentially subsidizing your lowest performers with the hard work of your heavy hitters. In a market like Milwaukee or Madison, where the labor pool is tightening and material costs fluctuate by the week, a rigid pay structure is a liability. I recently sat down with Jaxon, who runs a mid-sized outfit near Waukesha, and he was baffled why his top rep, Tessa, was looking at a competitor. The answer was simple: Tessa was bringing in $1.4 million in residential replacements at a 42% margin, yet she was being paid the same percentage as the guy barely hitting his $400k quota at 31% margins.
Your incentive program should act as a filter, keeping the high-producing "closers" locked in while naturally phasing out those who cannot pull their weight. In the Badger State, where our season has a definitive expiration date once the ground freezes, every lead in the peak months of June through September must be maximized. Relying on outdated "industry standard" pay plans is the fastest way to lose your best talent to the shop down the street that understands sales psychology.
At a Glance
Tiered Accelerators: Move from flat rates to graduated scales to reward high-volume producers and increase retention.
Margin-Based Incentives: Protect your bottom line by tying bonuses to actual job profitability rather than just top-line revenue.
Lead Source Weighting: Adjust payouts based on whether the lead was company-provided or self-generated to balance acquisition costs.
Seasonal Retention Bonuses: Use deferred compensation to keep crews and reps from jumping ship during the Wisconsin winter slow-down.
The High Cost of the "Flat Ten" Model
The traditional roofing commission structure is a relic that ignores the modern reality of lead acquisition costs. When you provide a verified, high-intent lead, your company has already swallowed a significant portion of the customer acquisition cost (CAC). If a rep closes that lead, they haven't done the same "heavy lifting" as a rep who knocked doors in Appleton for six hours to find a lead. Yet, most shops pay them exactly the same.
According to the latest IBISWorld Roofing Industry Report, labor and commission costs are among the largest variables affecting net profit. In Wisconsin, where we face unique challenges like the "Right to Cure" law and specific licensing hurdles, your overhead is already stretched. When you pay a flat rate, you lose the ability to steer rep behavior toward the jobs that actually keep the lights on during a lean February.
I've seen shops in the Fox Valley transition to a "split-tier" system where company-provided leads pay a lower base commission, but self-generated leads pay a premium. This encourages your team to hunt while still providing them the stability of a reliable lead pipeline.
Comparing Performance Models for Wisconsin Roofers
To fix a broken culture, you have to choose a model that aligns with your specific growth stage. A startup roofer in Green Bay has different needs than a legacy firm in Janesville.
Tiered Accelerator vs Flat Commission Model
| Feature | Flat Commission + Bonus | Tiered Accelerator |
|---|---|---|
| Best For | Small, stable teams | Scaling high-volume shops |
| Sales Motivation | Low to moderate | Extreme high for volume |
| Complexity | Low | Moderate |
| Risk to Owner | High (fixed costs) | Low (paid on results) |
| Retention Impact | High turnover risk | Locks in top performers |
Best For
Sales Motivation
Complexity
Risk to Owner
Retention Impact
The Tiered Accelerator
This is the "gold standard" for shops looking to scale past the $3M mark. In this model, a rep might earn 8% on the first $100k of monthly revenue, 10% on the next $100k, and 12% on everything above $200k. The psychology here is powerful. I watched Tessa, the rep I mentioned earlier, push herself to close an extra $43,721 in business in the final week of the month just to trigger her 12% "kicker" on the entire month's volume.
The Profit-Share (Net Margin) Model
If your problem isn't volume but rather "shaved" estimates, this is your solution. Reps often drop prices to close a deal because their commission is based on the gross sale. If they drop the price by $1,000, they only lose $100, but you lose the full $1,000 in profit. By paying a percentage of the net profit (after labor and materials), the rep becomes a partner in the job's success. They will fight for every dollar on that supplement because 25% of that profit goes directly into their pocket.
Shops that transitioned from gross-sales commissions to net-profit incentives saw this improvement within the first 6.5 months.
The Psychology of the "Winter Retainer"
Wisconsin is not Florida. We have a "dead zone" where roofing stops, and anxiety among sales reps climbs. This is when your competitors start poaching. An effective incentive program includes a "stay bonus" or a deferred compensation pool.
Suppose you take 1% of every job's revenue and put it into a "Winter Stability Fund." If the rep stays with the company through March 1st, they get a lump sum payout of that 1%. On a $1.2M annual run, that is a $12,000 check waiting for them when they need it most. It turns your company from a seasonal gig into a career.
The "Lead Cost" Clawback
"If you are buying high-quality leads, track the ROI by rep. If a rep has a closing rate below 18.4% on company leads but is still getting the same volume of "hot" opportunities, you are burning money. Implement a "lead tax" for underperformers where they pay a small fee back to the company for every lead they fail to convert after a certain threshold. This ensures your best leads go to your best closers."
Navigating Wisconsin Employment Regulations
When you start messing with pay structures, you have to be careful. Wisconsin's Department of Workforce Development (DWD) is strict about commission payments and "draw" accounts.
Legal Compliance Requirement
Always ensure your commission agreements are in writing and signed by the employee. In Wisconsin, if an agreement is ambiguous, the courts typically side with the employee. Be specific about when a commission is "earned" (e.g., at contract signing, at the start of work, or upon final payment).
I've seen a shop in Kenosha get hit with a massive back-pay suit because they tried to "claw back" commissions on cancelled jobs without having a clear, written policy. You need to define exactly what happens if a homeowner cancels their contract 47 days after signing.
Implementing the Change Without Mutiny
You cannot just walk into a Monday morning meeting and announce that everyone's pay is changing. You will lose half your team before lunch. Instead, frame the new incentive program as a way for the "winners" to make more money.
When Jaxon implemented a tiered system in his Waukesha shop, he ran the numbers for his team. He showed them that under the old plan, a top-tier month earned them $9,200, but under the new plan, that same effort would net them $11,348. He focused on the platform features he was providing to help them get there, like faster lead notifications and better CRM tracking. By showing them the "math of more," he gained buy-in from the people who mattered.
The key is transparency. If you use a system that provides verified lead previews, your reps can see the value of what the company is providing. They start to realize that 8% on a lead that is 90% closed is better than 10% on a lead where they have to spend three days just getting the homeowner to answer the phone.
Final Thoughts on Retention and ROI
High turnover is a silent killer. Construction Dive often highlights how the cost of replacing a skilled project manager or sales rep can exceed 33% of their annual salary. In a specialized field like roofing, that number is likely higher because of the technical knowledge required for insurance supplements and local Wisconsin building codes.
An incentive program isn't just about paying people; it's about signaling what your company values. Do you value "busy work," or do you value high-margin, high-volume growth? When you align your pay with your goals, your team will follow. If you are struggling to find the right balance, consider how your current lead distribution process factors into your overhead.
Don't let another season go by with a compensation plan that leaves your best people looking for the exit. Re-evaluate, run the numbers, and build a program that makes it impossible for a competitor to "buy" your top talent away.