Best Practice - Designing Plans Which Are Fair
When designing a sales incentive plan, your goals typically include:
- Limiting total spend to a reasonable amount
- Maximizing the effectiveness of your spend
- Ensuring that top performers feel recognized
- Ensuring that participants are challenged to reach for the next level (which should feel attainable)
- Ensuring that under-performers don't consume too much of your sales incentive budget
- Being able to clearly communicate with participants regarding their potential total compensation
We recommend the following:
- Define 4 attainment levels
- L1 is a baseline attainment level with a difficulty of "Trivial"
- No monetary rewards should be assigned at this level (you can learn more about why defining a baseline attainment level is useful here)
- L2 is an attainment level with a difficulty of "Easy"
- The threshold should be set so that the lowest 25% of participants reach this level
- L3 is an attainment level with a difficulty of "Standard"
- The threshold should be set so that another 50% of participants reach this level
- L4 is an attainment level with a difficulty of "Difficult"
- The threshold should be set so that the top 25% of participants reach this level
- Submit calculations (consider using simulation)
- Run reports to understand
- What your total spend would be
- Configure your plan to cap total spend
- This protects your plan from overspend scenarios
- You could let participants know that rewards will be re-adjusted if the budget is exceeded
Keep in mind that you may be able to increase the effectiveness of your plan using the following:
- Consider using profit instead of revenue to avoid overpaying for low-margin sales transactions
- Consider using scoring to boost certain sales behaviors (ex: promote the sales of new products)
- Consider using innovative approaches such as ranking or % increases instead of traditional quotas
- Consider creating personalized plans (ex: plans specifically designed for specific job titles or individuals)
- Consider non-monetary rewards (ex: announcements, badges, prizes) as a way to motivate and recognize participants
Best Practice - Apply Transactions Filtering To Plans
Normally, you want your sales incentive plans to only process sales transactions within a time period, but also matching a certain criteria (ex: exclude all line items of type "renewal", only consider transactions associated with new products, etc.). ...
Best Practice - Legally Protect Your Sales Incentive Plans
By clearly documenting your sales incentive plan's terms and conditions (and ensuring that potential beneficiaries are aware of those rules), you can: Increase transparency Reduce confusion Reduce the chance of disputes Reduce overall legal risk and ...
Best Practice - Create All Plans As Hidden By Default
When adding a new plan, you can choose between two access options: Public - Full & Limited Admins Visible to all workspace full and limited admins Hidden - Specific Admins Only Restrict visibility and delegate plan management While working on ...
Best Practice - Only Use The Complexity You Need During Design
When designing a sales incentive plan, you could use a complex approach such as: Use a score, based on calculating profit, and then applying a rule-based profit multiplier Measure a % increase for the score vs. the previous period Define 8 levels of ...
Best Practice - Only Add Users You Need
We recommend that you only add users you need. Our billing is per user. It is designed to match usage, our own costs performing incentive calculations, and complexity associated with managing records. Here are our recommendations to avoid unnecessary ...