Chad Albrecht, an associate principal at ZS and the lead on the IPR survey, says incentive management teams must first identify the most appropriate metrics and use those measures to set quotas that account for the different earning opportunities that occur across varied territories.
"In our experience, we have found that very few companies take the time to determine the true market potential for their products. They also infrequently research and purchase the data on the many variables that can affect sales," says Albrecht. "As our study shows, quota-based plans are gaining in usage. As sales leaders implement them, they should remember that, while measuring disparities between territories when setting quotas is often a daunting process, it is well worth the effort. You want to motivate, and one of the most critical requirements for motivation is a belief that salespeople are being treated fairly with the quota they have been given."
Long-Term Incentives May be on the Rise
After several years as a popular retention tool, long-term incentives, notably stock options, have declined to 36 percent among reporting medical products companies as a result of the Financial Accounting Standards Board (FASB) requirement that options be expensed. At the same time, a majority of high tech companies (63 percent) still use options-based long-term incentives. Yet, companies in both industries cited it as one of the most effective reward tools.
This suggests that long-term incentives could be poised to make a comeback. "Long-term incentives keep your top salespeople motivated and provide an added incentive for them to stay with you," Albrecht said. "Limited stock options notwithstanding, companies would do well to use tools like long-term cash incentives to retain their reps and keep the reps' clients with the company."
Please contact ZS Associates for more information or for details about participating in the 2009 survey.
|SOURCE ZS Associates|
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