To maximise sales execution and drive effective sales behaviours, sales plans must be strategically aligned, well communicated and have faultless execution.
This survey sought to provide a unique snapshot into detailed incentive design across the European region and to identify the unique practices that set high-performing organisations apart.
Over 80 organisations participated in this cross-sector research, with participants reflecting more than 20 European markets.
The survey results demonstrate that sales incentives in high-performing organisations share a number of common characteristics that are distinct from the broader participant group:
- A greater use of direct drive (commission or incentive) arrangements rather than bonus plans
- Higher emphasis on variable pay in pay mix
- Plans based on a more focused performance assessment, with two to four performance measures common
- Performance measures that demonstrate greater sophistication and strategic alignment, with more focus on product mix and less focus on sales activity measures
- Greater focus on risk management in plans, through a greater incidence of the use of behaviours as a performance measure, as well as a higher prevalence of hard caps
- Manager plans that are also more likely to be focused on broader business unit and/or organisation performance in addition to individual/team performance
These characteristics demonstrate a strong alignment to our principles to underpin best practice sales incentive design, as outlined in the report, and show how organisations are evolving sales compensation practices to drive not only the delivery of near-term results but also the solution-based selling required to deliver longer-term value.