A good incentive scheme is essential to realize full potential of a sales team. The main objective is to reward high performing sales persons and identify the low performance sales reps for intervention.
However, often times companies end up rewarding territories rather than sales person because territories with high sales help executives in achieving their target. Thus incentive plans end up being designed in a way to favour large territories.
While >80% of salesforce use goals in designing their sales plan, most take target setting process for granted. In fact, we rarely see statistical methods used for this purpose. Most managers assume that it’s hard to grow share in high market share environment and burden low share territories with excessive increase in quota. They end up unfairly penalizing low share territories while high share territories end up getting windfall bonuses.
Our simulations show that companies without proper quota setting process incur high salesforce cost. Cetas Healthcare’s propriety incentive setting tool is based on promotion sensitive component of sales and historic variation of performances of sales people, application suggest optimal variable / fixed ratio, thresholds and performance range for incentive consideration.
OptimaPay help companies design a fair and motivational incentive scheme, while it simulation features ensures you don’t end up paying excessive bonuses than allocated in case of over-performance and vice-versa.