Strategies on How to Evaluate Sales Incentive Plans

Reviewing sales data is fundamental to assessing appropriate incentives.

Evaluating sales incentive plans requires strategic planning. A thorough examination of incentive plans could take from one to three months, according to leading global professional services company Towers Watson. Researching current industry trends regarding incentives, reviewing historical financial data, obtaining input from your sales team and applying a checklist are useful strategies that make evaluating sales incentive plans easier.

Things You'll Need

• Financial statements

Instructions

1. Obtain industry data on effective sales incentive plans. Find out how much and what types of incentives generally work best. Research major competitors on websites such as Hoover's. Hoovers features business strategies of large companies and some of the information is free. For more specific data, you might consider hiring a market research company. Colleges are potential resources that have insight on professionals able to assist effectively.

2. Evaluate sales performance results. Look at sales-team bonuses paid the previous year. Find out if there is any correlation between the type of incentives and the bottom-line. Determine what you can offer and how the incentive plan drives desirable results.

3. Talk with your sales team. Feedback on what employees want within the sales department can change over time. Conduct a short survey to collect ideas on what to offer. Try to remain current on their desires to help increase their drive for success. For instance, a free flat-screen television might not be as enticing as it was five years ago. Electronic incentives always must adjust and monetary bonuses should increase as profits rise.

4. Apply a sales incentive plan effectiveness checklist. Use a word document and create a table to check-off the things you do well. Assess a number value of one-best to four-worst. This is designed to review and improve the current incentive plan. (Reference 3 C Publication)

References

• 3 C Publication: "Effective Sales Incentive Plans"
• Towers Watson: "Sales Incentive Plans-Creating a Timeline for Success"

Resources

• Hoover's