Analyzing Incentive Compensation Plans
"I need to determine if our sales incentive compensation programs are effective and driving the right sales behaviors."
Your sales incentive compensation programs are intended to drive the right sales behaviors that are aligned with your corporate strategy and goals. Otherwise, why bother?
Designing, implementing and rolling out your sales incentive compensation programs and managing these programs throughout the year are critical to the success of your business profitability and growth.
If you cannot measure it, how can you manage it?
Compensation leaders need to frequently review the sales incentive compensation plan design, measures and effectiveness.
Using Varicent, you have the ability to view dashboards and reports that measure the effectiveness of your sales incentive compensation programs to ensure you are driving the right sales behaviors that are aligned with your corporate strategy and goals.
- Track any outliers in your sales incentive compensation plans and sales team performance to highlight any concerning metrics that are abnormal or outside the expected results.
- View reports that align with the corporate strategy and objectives and compare these to your sales incentive compensation plan measures. For example, if your organization is focused on new customer acquisitions, you can establish a metric (i.e. say 45 net new customers in the quarter) and compare this to the measure in the incentive compensation plan for each sales rep and at the aggregate level across the entire sales team.
- Build sales incentive compensation plans that include a consistent set of measures that are communicated to the sales team and help focus them on what is important.
- Create model scenarios and view how different changes to the model will impact sales performance and sales incentive compensation payouts.