April 2009

Is your incentive program rewarding behaviors or results?

In sales it is a given that revenue is the ultimate measure of success and in general no one takes issue with paying commissions for realized revenues. However, revenue is achieved as a result of executing specific behaviors or prospecting activities thereby making “revenue” a lagging indicator of success. Most people adhere to the view that incentives and incentive programs should drive behavior – Therefore does it make sense to only pay commissions on revenue or is it time to consider incentivizing the very behaviors that typically result in generating revenue?

Compensating employees for the behaviors you want them to exhibit may help ensure they actually execute the behaviors, align expectations and increase the probability of meeting business objectives - Whether that be retaining customers, selling new product lines, growing into new markets, or keeping your best people on board and motivated. A reward system could combine commissions on sales (perhaps with corresponding rewards at smaller levels for those on the team that supported the sale) and non-cash reward and recognition for those behaviors that lead to the sale. If commission is only paid on the sale it may compromise other company needs/desires or may not maximize revenue based on proven prospecting behaviors that have historically been the recipe for success.

On the other hand, if the "specific prospecting behavior" produces a sale, you may be paying for the same result, just at a different time. What if a sales person makes sales using a different set of behaviors (not being tracked) - does that mean these aren't “valid sales” or does it mean you may not be measuring all the right revenue generating behaviors? Different sales people may have different selling styles that suit their personality or naturally gravitate towards certain prospecting activities that they are more comfortable with. Why try to force behaviors that don't necessarily suit that person's optimum style of selling? In addition, tracking specific behaviors may add to the complexity of any program. Managing the process effectively could be very time consuming and certainly open to abuse and resulting mistrust.

Although there are many factors that make an incentive program successful, the old saying “you get what you measure” certainly applies here!

At On Point we help our clients increase their results by designing and executing unique incentive and recognition programs using the most sought after Sports, Entertainment and other Experiences to deliver the "Wow". For more information on how we can help you recognize your top performers, please contact us directly at 1800-809-1277.

Incentive Program Services Travel Reward Card Program Incentive Ideas March 2009 April 2009 May 2009 August 2009 September 2009 January 2010 First Name: Last Name: Email Address: unsubscribe		View cart Print April 2009 Is your incentive program rewarding behaviors or results? In sales it is a given that revenue is the ultimate measure of success and in general no one takes issue with paying commissions for realized revenues. However, revenue is achieved as a result of executing specific behaviors or prospecting activities thereby making “revenue” a lagging indicator of success. Most people adhere to the view that incentives and incentive programs should drive behavior – Therefore does it make sense to only pay commissions on revenue or is it time to consider incentivizing the very behaviors that typically result in generating revenue? Compensating employees for the behaviors you want them to exhibit may help ensure they actually execute the behaviors, align expectations and increase the probability of meeting business objectives - Whether that be retaining customers, selling new product lines, growing into new markets, or keeping your best people on board and motivated. A reward system could combine commissions on sales (perhaps with corresponding rewards at smaller levels for those on the team that supported the sale) and non-cash reward and recognition for those behaviors that lead to the sale. If commission is only paid on the sale it may compromise other company needs/desires or may not maximize revenue based on proven prospecting behaviors that have historically been the recipe for success. On the other hand, if the "specific prospecting behavior" produces a sale, you may be paying for the same result, just at a different time. What if a sales person makes sales using a different set of behaviors (not being tracked) - does that mean these aren't “valid sales” or does it mean you may not be measuring all the right revenue generating behaviors? Different sales people may have different selling styles that suit their personality or naturally gravitate towards certain prospecting activities that they are more comfortable with. Why try to force behaviors that don't necessarily suit that person's optimum style of selling? In addition, tracking specific behaviors may add to the complexity of any program. Managing the process effectively could be very time consuming and certainly open to abuse and resulting mistrust. Although there are many factors that make an incentive program successful, the old saying “you get what you measure” certainly applies here! At On Point we help our clients increase their results by designing and executing unique incentive and recognition programs using the most sought after Sports, Entertainment and other Experiences to deliver the "Wow". For more information on how we can help you recognize your top performers, please contact us directly at 1800-809-1277.