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Sales Incentives - Key Design Issues
Discussion Outline by
Effective Compensation, Incorporated
 Eligibility
- Sales reps
- Trainees
- Supervisors
- Support
Target/Potential
Payout Amounts
- Competitive pressures
- Base/commission/sales incentive/company incentive mix
Incentive
Form
- Cash
- Deferred cash/units
- Merchandise/time off/etc.
Administration
- Plan documentation
- Responsibility for budgeting/modeling
- Responsibility of calculations
- Arbitrating uncovered/disputed issues
Incentive
Period
- Weekly, monthly, quarterly, annually
- When are sales recognized - when
sold/shipped/invoiced/paid
- Waiting period for eligibility
Determination
of Goals
- Company, team or individual goals
- Commission vs. Incentive
- Based on each sale
- Total sales over period
- Include factors other than sales volume
- Sales - dollars or units
- Margins (if sales impacts)
- Collections (if sales impacts)
- Sales expenses (if sales impacts)
- Customer satisfaction/repeat sales
- New accounts
- Product mix (variations of plan features by
product)
- Team support
- Budgets
- Prior period
- Relative performance (other areas/firms)
- Quotas/thresholds
- Caps/maximums/windfall protection
- Corporate accounts
- National customers
- Government vs. private sector
- Domestic vs. international
- Joint sales
- Referrals
- Changing territories
- Problem customers
- Product introductions/special promotions
- Production/delivery problems
- New territories/offices
- Training wages/guarantees
- Trainer compensation
- Transfers/terminations
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