Sales Force Incentives

Several companies are faced with Sales Force Incentive Plans that are bureaucratic, difficult to administer and audit, and unable to provide an accurate view of their costs. These situations usually offer an excellent opportunity for improvement, where savings can be generated by avoiding inaccurate payments and time-consuming processes, and allowing sales executives to make better decisions and implement new sales strategies quickly. But this is just a start...

Sales forces have a direct impact on how the market perceives the Company and its products. The salespeople are the ambassadors of the Company. They actively promote the Company and its products and services. They are the front line between the Company and its Customers, and are typically the driving force behind revenue and growth. The way salespeople behave is often a reflection of the Company's sales incentive program. A well-designed sales incentive program focuses salespeople on activities that support the Company's business objectives and, in turn, rewards salespeople for their contributions.

On the other hand, a good design of the incentive plan must consider multiple aspects of the Business. For example, when an increase in stock is observed, many companies tend to push their sales force to work to attract more demand, and one way to do this is to offer higher or more attractive incentives. Most sales force incentive designs ignore this dependency and assume that production/inventory decisions are independent of sales incentive design. In CompStrategy we analyze such dependencies and consider the problem of joint sales force coordination and stock/production control, or other dependencies.

Normally, our services on Sales Force Incentives include the following elements:

• Assessment of the situation and needs of the company/organization
• Identification of Legal Considerations (e.g., Trade Traveler's Agreement)
• Analysis of the relationship between production/stock and incentives
• Analysis of the sales process (e.g. technical sales vs. operational sales)
• Analysis of the management information and the accountant/financial information
• Interviews with the commercial executives
• Review of market offsets
• Review/recommend/define desired competitive level
• Design of Incentive Plans for the Sales Force
• Review of alternatives
• Quantification of the economic impact on the recommended plans
• Documentation of the conclusions and recommendations in a report

CompStrategy can assist you with:

• Strategic Design of Incentive Plans for the Sales Force
• Determination of the optimal relationship between fixed and variable compensation according to type of sale
• Determination of target, minimum and maximum yields (windfall effect)

A good design of Incentives for the Sales Force achieves:

• Inspiring employees to achieve great things
• Reward the team in the right way
• It allows to achieve measurable improvements in the results
• Keep the best salespeople longer
• To attract the best on the market

In the front-end, a strategic design of Sales Force Incentives should be fun, simple and intuitive. In the back-office, it should be agile, flexible and intelligent, offering statistics and valuable management information that allows to identify and obtain the maximum return on the incentives paid.

If you are not sure where to start, or if you would like us to check existing incentive plans, please contact us.