Mayank Gupta co-wrote this blog post with Mike Martin.
Over the past couple of years, there has been significant buzz within compensation circles around customizing and personalizing incentives. The motivating factors range from accounting for multiple generations in the workforce to accounting for local differences in salesperson geographies. One insurance company went so far as to have its salespeople set their own goals. The result was a 10% higher forecast than headquarters was expecting, along with a more empowered sales team.
While this example is pretty cutting-edge, here’s a range of customization ideas for those companies that want to add some personalization but aren’t yet ready to go the “set your own goals” route:
- Light customization: This level involves understanding your sales team’s preferences, and you can get started by running a diagnostic to understand salespeople differences. You may already have this from an internal voice-of-the-customer survey. You can use those results to customize plan communication materials: For example, for a sales force that highly values transparency, include sample calculations. You can also use this information to offer award types to match salespeople preferences, like paid days off instead of cash.
- Medium customization: Offer options for contest prizes. This is a great way to begin customizing the experience that salespeople have. Research shows that offering a choice of prizes from a catalog will boost satisfaction of the contest and keep the benefits longer than just offering cash.
- Medium-plus customization: Without changing the base plan, there are some additional ways to enable self-customization. If you have MBOs in your plan, headquarters can create a list of five objectives and allow salespeople to choose three of them. Another option is to allow salespeople to customize their product weights up to a certain extent. For example, a salesperson can choose to shift 5% weight from one product to another, based on his local business situation.
- Heavy customization: Similar to the insurance company that allows salespeople to set their own goals, you could enable salespeople to choose their payout curve or even a portion of their plan type.
As you can see, there are a number of ways to customize or personalize the incentive plan. As the buzz continues and your company decides to try higher levels of customization, one great approach will be to test different options through a contest so you can refine which ideas work best for your salespeople and situation.
Even slight tweaks to your compensation plan will help motivate and empower your sales force, and those companies that do it well stand to benefit immensely, both in terms of sales team motivation and unlocking hidden sales potential.
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