If in BtoC, the bonus represents 20 to 25% of the total compensation and can reach 50% in BtoB, its objective is primarily the investment and the implication of the short-term commercial and their long-term loyalty
According to the definition, an effective individual would produce maximum results with a minimum of effort or means. This person would therefore have a good performance and would be efficient in his missions. Companies are looking for more commercial performance and do not hesitate to put in place strategies that promote commercial efficiency. What are the factors that make sales people more efficient? Can incentive compensation be one of them? How?
Elements of answer in this article..
According to a recent Gallup study, 72% of motivated employees believe they can positively impact customer service!
An effective person is able to produce more and quicker than other people in the same situation. By maintaining a certain level of quality and having the same initial level of resources, an efficient employee will more easily reach his objectives. Effective people are usually able to achieve the goal faster by using less effort and with the means at their disposal. Some managers tend to draw a direct parallel between motivation and efficiency.
Common sense would be that a motivated person is by nature, more effective than an employee losing interest in his work. Undeniably, a motivated person will accomplish his tasks with greater conviction, but will it be more effective?
Not necessarily. Thus, it is important to dissociate the notion of motivation from that of efficiency. A highly motivated employee is not necessarily a very efficient employee. Working hard and with conviction does not mean working effectively. However, in some cases, motivation can be effective, provided it is well controlled
Thus, offering a variable pay system based on the achievement of qualitative objectives can show your motivated employees the path to efficiency. The goal is to show the path of performance to employees by indicating, step by step, the line to follow in order to achieve more individual effectiveness. It is interesting to propose qualitative indicators for monitoring his work.
For example, someone could incentivize qualitatively on the achievement of a minimum of 10 appointments customers per week and 50 customer phone calls per week to show him the path of efficiency. In this configuration, the commercial is focused on qualitative indicators that indicate the way to progress.
This concrete action plan will promote the quality of the commercial's work in his daily tasks and increase his efficiency. The second goal is to get the salesperson to improve, as and when his client appointments, and thus to achieve its sales objectives and ultimately increase his incentive compensation.
In this way, incentive compensation is an important motivator for employees, provided that it is effectively driven by qualitative indicators showing the path to success for everyone.
Commercial efficiency is the ability of a company, service or individual to achieve the intended objectives and results. The notion of commercial efficiency brings together topics of cost, time, quality or profitability. How to know if a collaborator is effective from a commercial point of view?
Commercial efficiency is measured using KPI, Key Performance Indicator, qualitative and / or quantitative. First of all, it is important to take into account the business sector in which the company operates, the economic context, the seasonality or the strength of competition in the market to correctly understand the KPIs related to the business. commercial efficiency.
Does the company offer products or services? Does its offer of services allow it to consider deployment in new markets? Does it have enough commercial, trained and competent people to develop the existing client base? Does the company know enough about its customers and their needs? How far can it anticipate and meet the expectations of its clients? Does the company have a real competitive advantage? etc., so many questions that come into play in the evaluation of the commercial efficiency of a company that are declined in elements of evaluation of the individual performance of each employee.
As a result, business efficiency reflects an organization's ability to achieve its sales objectives. In this light, what is the link between commercial efficiency and incentive compensation? How can variable compensation boost the efficiency of sales people?
"The majority of companies remain very conventional about their variable compensation policy and rely primarily on quantity. The commercials are primarily there to sell, it's their job "says Cyril Bregou, Founder and managing partner of People Base. More and more companies understand the importance of guiding salespeople in their quest for performance. To help salespeople take the steps, companies are interested in introducing more qualitative elements into their evaluation grids.
Although some companies continue to strongly favor the quantitative evaluation criteria, many want to guide the sales teams towards more quality. Nevertheless, the role of qualitative criteria should not be contrasted with purely quantitative ones. In both cases, the role of incentive compensation, whether based on purely qualitative or solely quantitative criteria, is to achieve greater commercial efficiency and more individual and / or collective performance.
Accompanying sales representatives towards greater efficiency and performance therefore requires the introduction of a balanced incentive compensation system between quantitative and qualitative criteria!