Sales & Dealer Recognition
Sales & Dealer Program Fast Facts
Planning: Requires 3-4 months per program. Vice Presidents of Sales, Sales managers, District managers and ultimately other top officers are involved in creating the On-Plan (see Program Design below) elements of the program. The President and CEO are involved in the Achievement and Career (see Program Design below) recognition elements of the program.
Major Markets: Insurance, Auto parts/tires/accessories, Toiletries/ Cosmetics, Automobile/Trucks, and Food Products
Expenditures:
65% less than $50,000,
Approximately 10% $50,000 - $99000,
just under 25% $100,000 plus.
Incremental sales increases: 5% - 14% (44%),
15% plus (52%)
Budgeting: Generally, 8-10 percent of anticipated sales increase. The budget is allocated as follows: 70-75% Awards/ Incentives, 20% communication, and 5- 15% administration.
Program Objectives:
Increase overall volume (86%)
Sell new accounts (57%)
Introduce new products (41%)
Improve morale & goodwill (40%)
Move full line or slow products (17%)
Sales Program Overview
Rationale: Organizations are more focused than ever before on managing their sales forces in ways that ensure high performance. Senior management must focus on compensation, recognition and reward strategies and programs that motivate their sales forces. The objective is to drive profitable revenue by focusing on the most profitable customers, the highest potential markets and the most margin-rich products and services.
Program Design: A well-designed Sales Program encompasses both a recognition and reward/incentive component. Both the recognition and the reward/incentive components are centered on "events". The recognition component may be subdivided into Achievement, meeting/exceeding current year objectives and Career, meeting/exceeding objectives over an extended time period. Many organizations combine these two elements of recognition, Achievement and Career, with the establishment of elite clubs such as President's Club, Chairman's Club etc.
The reward/incentive component manifests itself in the "On-Plan", meeting short-term objectives i.e. quarterly, elements of the program.
Program Content: The make-up of a Sales Program is necessarily based on the most effective motivation for a unique, and often diverse, population. However, there are three key elements of program content; the specific Awards/Rewards themselves, the Category of the awards/incentives and the Need being satisfied.
The Awards/Incentives range from Jewelry/Rings, Plaques & Certificates, Group Travel to Cash/Cash equivalents.
The Category of the prize may be Compensation (bonus, commission, variable commission) Incentive, generally for the On-Plan element, to focus activity and behavior and Recognition, to sustain and enhance appropriate behaviors and results.
Need refers to the personal/intrinsic requirements of those for whom the program was established. Money, Status, Security and Respect are the "Needs" most often considered in Sales Programs.
Program Measurement: The ability to effectively measure a Sales Program is one of the most attractive features of this type of recognition and reward. The most common Output measures are New Accounts/Customers, Total Volume Growth and Total Units. Others may include Shelf/Display Space, Contract renewals or Profitability.
More organizations are expanding to Activity measures. Examples of Activity measures would include the number of Presentation, Customer Satisfaction Ratings and Closing Rate.
Finally, measurements may be by Segment. That is by region, district, office size business unit or markets served. These forms of measurement are not mutually exclusive. Utilizing a combination of Output and Activity measures by segment may prove to be more the rule than the exception.
The ability to measure results allows the organization to pay for the recognition directly from the revenue generated by the program as a result of increased sales. |
