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Effectiveness in sales incentive programs

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Find an executive summary of the global trends on sales incentive programs

Find an executive summary of the global trends on sales incentive programs

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    Effectiveness in sales incentive programs Effectiveness in sales incentive programs Presentation Transcript

    • Effectiveness inSales IncentiveProgramsExecutive Summaryof Global TrendsJune 2012
    • Challenges Solution Testimonials Conclusions Most typical challenges about sales incentive programs1. Related to the current economic situation: • Strong effort to have a full control of the budget • Focus on maximize the customer relationship due his ability to change supplier2. Related to the sales people/channels: • Doesn’t fit in all people needs • Unachievable goals or just a few people can achieve goals3. Related to the programs: • Even still expensive, sales incentive programs are strategic • Cash or non-cash rewards? * Source: Incentive Marketing Association 2
    • Challenges Solution Testimonials Conclusions Flexibility on reward choices First time 4 different generations are working together*: Traditionalists: Baby Boomers: (b) 1910 – 1945 (b) 1946 – 1964 6.5% 41.5% Gen X: Gen Y: (b) 1965 – 1978 (b) 1979 – 1988 29.5% 22.5%Each Generation has distinctly different: Life Influences, Work Tendencies, Values & Ideals,Cultural Backgrounds, Definitions of Success, Goals & Desires, and Behaviors.So, each generation has different distinct motivators. * Source: US Performance Improvement Council, July 2008 3
    • Challenges Solution Testimonials Conclusions Why to incentivize Gen Y peopleGen Y: A rewards and incentives system is an(b) 1979 – 1988 absolutely fundamental requirement in the modern workplace. The reasons are:22.5% of working population  Retention: if an organization does not havebut majority on retail jobs an integrated rewards and recognition they are ambitious function within their business, Gen Y’s will move to an organization that does. they are hardworking  Gen Y employees are rewards driven, they are technically savvy which means that they are inspired and motivated by objective and consistent they are outcomes driven recognition of their success. they are short-term focused  The implementation of a rewards and incentives strategy will thus act as a lever to they are reward driven reduce Gen Y employee turnover rates. 4
    • Challenges Solution Testimonials Conclusions Performance of incentive programs US companies invest + $115 billion annually in incentive programs, $27 billion spent on travel and merchandising but most of them don’t have clear ROI. Key findings on US survey:  Incentive programs improved performance by 22% for individuals and 44% for teams  Longer time programs are better: 42% performance increase when program run for a year or more, 31% for running six months or less and 18% for a week or less.  Implementation is very important: 98% of executives complained about operations  Quota-based incentive measures and open to everyone programs work best* Source: White Paper from Site Foundation 5
    • Solution Testimonials Conclusions 6 steps to succeed in Incentive Programs Gap analysis between company goals and Assessment individuals performance Selection Select what is the right program and metrics to measure Setup infrastructure supporting sales Setup organization and channels Training & Develop, create and establish initial training communication & regular communication Incentive program launch Program launch and support Continuous results tracking and Results & ROI ROI analysis* Source: Incentive Marketing Association 6
    • Solution Testimonials Conclusions Maximize your sales investment by rewarding the value in the sales cycle Reward the right behaviour of your sales people or teams when it’s crucial for your business at the time you require a higher impact Demand Prospection Needs generation Solution identification Negotiation design Post & closing salesMetrics toencourage Customer Revenue, Up sell, Deal Opportunity Engagement profit, growth Cross sell Activity registration management results 7
    • Solution Testimonials Conclusions Maximize your partner investment by rewarding the value in the partner lifecycle Reward the right behaviour of your partners when it’s crucial for your business at the time you require a higher impact Partner Partner Partner Partner Partner recruitment engagement ramp up sales Retention · Business Plan · Product launch · Sales individuals · Cross sell, up sell participationMetrics to · Deal registration · Services · Trainingencourage certification · Demo units · Sales targets · Customer · Specialization · Joint activities satisfaction 8
    • Solution Testimonials Conclusions 4 Psychology effects on non-cash rewards 1. Higher value perception: Non-cash awards have positive attributes associated with the award and it is ascribed a higher value. 2. Rewards on performance: Non-cash incentives tend to be kept separate from compensation, thus standing out as rewards for performance 3. Power to motivate: When a non-cash award is something that a participant would not purchase with cash on his or her own, the participant can justify the award. Being able to justify the award means it has greater power to be motivational. 4. Social reinforcement: Non-cash incentives have trophy value and are more likely to be acknowledged than would be the case if the award were in cash.* Source: Site Foundation 9
    • Solution Testimonials Conclusions 5 conditions for sales incentive programs Five conditions when sales incentive programs work best: 1. Current performance is inadequate 2. The cause of the inadequate performance is related to deficiencies in motivation. 3. The desired performance type and level can be quantified. 4. The goal is challenging but achievable. 5. The focus on promoting a particular behavior does not conflict with or override everyday organizational goals.* Source: US Performance Improvement Council 10
    • Testimonials ConclusionsProven profitability results 11
    • Conclusions key findings for the effectiveness of your sales incentive program Incentivizes individuals considering all ages and diversities Long run programs, easy to launch, open to everyone Assessment and measurable metrics to track ROI Training and regular communication of the program Reward the value in the sales cycle / partner lifecycle Reward on your behavior interest Non-cash rewards considered as trophies 12
    • www.lemon-sales.comAmsterdam – Barcelona – Bristol – Brussels – Madrid – Milano – München – Paris