Loading ...Through this week I posted a long article “Quality versus Quantity: Aligning Sales Incentives with Profitability” broken down in 5 parts.
Part 1: The first part of the series introduced the concept of aligning incentives and profitability and talked about the difference between incentive, bonus and recognition
Part 2: This post discussed four category of profitability drivers: Revenue through product preference or price protection, cost containment, risk mitigation and strategic influences.
Part 3: This third post discussed the importance and benefits of accurate reporting.
Part 4: This part focused on change management and how to prepare sales people to focus their time on new objectives / compensation plans.
Part 5: Finally, this last post reminded us how good intentions can sometimes lead to unintended outcomes and provided two such examples.
Key Points
There was a lot of content in this 5-part article, so here are some of the main takeaways:
- The sales force can be a key contributor to the company’s bottom line.
- Some sales jobs can influence profitability, some can not.
- Clear, reliable and timely measurement is key to holding individuals accountable for progress toward individual and unit profitability goals.
- All levels of the organization, from the CEO on down, must champion the effort behind any fundamental change.
- A short-term emphasis on profitability can lead to longer-term consequences.
- When considering changes to sales people’s pay, include low risk options such as SPIFFs.
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